The Canadian government has decided to end its biofuels subsidy program, despite several companies urging the government to fund the development of new plants.
Natural Resources Minister Joe Oliver was quoted by The Globe and Mail as saying in a letter that companies had failed to produce and sell sufficient biofuel quantities to meet targets.
According to Oliver, the government will cut funding for biodiesel producers under Ottawa’s ecoEnergy program, but current commitments would continue until the program expires in 2017.
The government had committed funding for nearly 24 projects led by companies such as BIOX , Husky Energy, Maple Leaf Foods, Suncor Energy amongst others.
Oliver said that the government will not resume the ecoEnergy for biofuels programs to new applicants.
"During this time of fiscal restraint and challenging global fiscal realities, our government has committed to ensuring that we balance our budget," Oliver added.
Thus far, Ottawa has paid $672m under the subsidy to biofuel companies, to set up facilities for the production of grain-based biodiesel.
Canadian Renewable Fuels Association president Scott Thurlow meanwhile countered the government’s view, saying that there were several companies that were ready to construct new plants.
"They have shovel-ready projects which if the programs was reopened, they could absolutely make good on the Prime Minister’s commitment to have 600 million litres of domestic biodiesel production in place," Thurlow added.