Canada Set to Experience Uptick in Biobased Diesel Consumption in 2023

In 2022, the utilization of biodiesel and renewable diesel in Canada underwent a modest decline of approximately 2.3 percent. However, the trajectory for the current year appears more promising, with a projected growth of 2.6 percent, as illuminated in a report furnished by the USDA to the Global Agricultural Information Network of the Foreign Agricultural Service.

The anticipated expansion in the consumption of biobased diesel is gaining momentum primarily due to the implementation of Canada's Clean Fuel Regulation (CFR) which was formally enacted in July 2022. Engineered to curtail the carbon intensity (CI) inherent in liquid transportation fuels, the CFR holds the potential to elevate the adoption of biobased diesel, ethanol, and other renewable energy sources. A notable projection from Environment and Climate Change Canada amplifies the significance of the CFR's impact, suggesting a potential surge in low-CI diesel utilization by an impressive 2.2 billion liters (equivalent to 581.18 million gallons) and a concurrent rise in ethanol consumption by 700 million liters by the year 2030. This comprehensive strategy is further fortified by a mosaic of provincial regulations that buttress Canada's endeavors in the realm of biofuels.

In the preceding year, Canada witnessed the consumption of approximately 760 million liters, encompassing both biodiesel and renewable diesel. This distribution comprised 380 million liters of biodiesel and 360 million liters of renewable diesel. Encouragingly, the outlook anticipates a climb in biobased diesel consumption, surging to an estimated 840 million liters in the ongoing year. This projection aligns 380 million liters of biodiesel with an augmented 460 million liters of renewable diesel.

Canada's biodiesel landscape, characterized by 11 active biodiesel plants during the previous year (down from 12 in 2021), is poised to maintain its stability in terms of operational facilities. While the cumulative capacity of biodiesel plants experienced a slight dip from 912 million liters in 2021 to 893 million liters in 2022, projections suggest a rebound to 913 million liters in the current year. Capacity utilization rates, which stood at 46 percent in 2021 and marginally lower at 40 percent in 2022, are envisaged to stabilize at 46 percent in the present year. A noteworthy trajectory is also evident in domestic production, forecasted to ascend to 420 million liters from 357 million liters in 2022 and 416 million liters in 2021.

Within the biodiesel sphere, Canada engages in both import and export activities. Anticipated figures indicate a decrease in biodiesel imports to 360 million liters in the current year, down from 400 million liters in 2022 and 422 million liters in 2021. In contrast, a boost is forecasted for biodiesel exports, poised to reach 400 million liters this year. Although surpassing the 379 million liters exported in 2022, this figure falls short of the 440 million liters exported in 2021.

In the larger context, Canada's comprehensive blend rate for biobased diesel is expected to attain 2.6 percent in the ongoing year, marking a modest uptick from the rates recorded in 2022 and 2021, which stood at 2.3 percent and 2.6 percent, respectively. This trajectory underscores Canada's persistent commitment to advancing the integration of biobased diesel within its energy landscape.