Biofuels use grows in Canada, GHG reductions hit record high

Biofuel use in Canada expanded 6 percent in 2025, reducing average fuel prices across Canada by approximately 2.4 cents per liter, while creating a record 14.2 million tons of greenhouse-gas (GHG) emissions reductions, according to the 11th annual Navius Research Biofuels in Canada report, released Oct. 14 by Advanced Biofuels Canada.

The Biofuels in Canada report is commissioned annually by Advanced Biofuels Canada with cofunding from the Canadian Canola Growers Association and independently authored by Navius Research.

The report tracks renewable and low-carbon fuel consumption, carbon intensity, GHG reductions, consumer costs, trade flows and the impacts of federal and provincial clean-fuel policies across Canada.

Clean-fuel consumption in 2025 follows the strong 10 percent growth in 2024, as federal and provincial fuel policies continued to increase demand for lower-carbon transportation fuels.

“Canada has secured its global stature as a strong and growing market for low-carbon fuels, and biofuels are delivering record emissions reductions and lower prices,” said Fred Ghatala, the president of Advanced Biofuels Canada. “With 2026 fuel-price surges, Canadians should know that biofuels are protecting their wallets by contributing well over 6 billion liters (1.585 billion gallons) of functional fuels that are critical to extending the global supply of liquid transportation fuels at this time. To ensure maximum benefits for Canadian jobs and the economy, the current review of major clean-fuel policies must strengthen market opportunities for domestic fuels and feedstocks.”

The report’s findings show how clean-fuel policies, domestic production and diversified fuel supply strengthen Canada’s economy and energy security.

Key findings from the 2026 report are below.

Clean-fuel market expansion

• Biodiesel and renewable diesel consumption grew significantly in 2025, with combined volumes increasing by 5 percent to almost 2 billion liters (528.3 million gallons) per year, on top of 10 percent growth in 2024.

• Ethanol blending grew by 4 percent in 2025 to just over 4.3 billion liters (1.136 billion gallons), on top of 6 percent growth in 2024.

• Renewable fuel content continued to exceed regulated minimum requirements. Ethanol grew to roughly 10 percent of Canada’s gasoline pool in 2025, and biomass-based diesel content exceeded 7 percent nationally.

Clean-fuel cost competitiveness

• Renewable fuel supply reduced wholesale fuel prices, on average, across the gasoline and diesel pool. Since the start of the Clean Fuel Regulations in 2023 until the end of 2025, the associated renewable fuel supply is calculated to have reduced prices by an average of 2.4 cents per liter relative to a scenario without renewable fuel.

• Ethanol blending reduced wholesale gasoline costs by approximately CAD$1.1 billion (USD$769.4 million) in 2025 and by CAD$14.6 billion (USD$10.2 billion) cumulatively since 2010.

• Outdated volume-based fuel taxation on renewable fuel cost consumers approximately CAD$450 million (USD$314.9 million) in additional fuel taxes in 2025. Since 2010, this additional tax burden is estimated at CAD$5.7 billion (USD$3.99 billion). If fuel taxes were instead assessed on energy content, renewable fuel consumption since 2010 would have saved consumers approximately CAD$3.7 billion (USD$2.59 billion).

Biofuels deliver record emissions reductions

Clean-fuel use avoided an estimated 14.2 million tons of GHG emissions in 2025, a new annual high and double the emissions reductions achieved in 2021.

The carbon intensity of biofuels themselves continued to decrease as well.

Ethanol used in Canada had an average carbon intensity approximately 60 percent below petroleum gasoline, while biomass-based diesel was approximately 86 percent below petroleum diesel.

British Columbia markets continue to demonstrate how the emissions performance of biofuels has improved over time.

Between 2010 and 2025, the carbon intensity of ethanol consumed in the province declined by 81 percent, biodiesel by 82 percent, and renewable diesel by 48 percent.

For the first time, the annual report also quantifies sustainable aviation fuel (SAF) supply in Canada.

The SAF blending rate in British Columbia was nearly 4 percent in 2025, three years ahead of when British Columbia’s Low Carbon Fuel Standard will first require a 1 percent blending rate.

Nationally, SAF blending in British Columbia means that about 1 percent of Canada’s jet fuel was renewable.

The SAF supplied in 2025 had an estimated carbon intensity approximately 68 percent below conventional petroleum jet fuel, expanding the report’s assessment of low-carbon solutions for transportation sectors that are particularly difficult to electrify.

“Canada already has the policy framework, agricultural, forestry and other natural resources, infrastructure, innovation and technical expertise needed to build a highly competitive domestic clean-fuels industry,” Ghatala added. “As governments focus on economic resilience, trade diversification and energy security, the renewal of these policies is the moment to turn existing domestic demand into Canadian investment, jobs and stronger supply chains.”

To read the full report, click here.

To view the Biofuels in Canada Plus report, click here.