Canada biofuels cut fuel prices and emissions in 2025

Biofuel use in Canada rose 6% in 2025, helping lower average fuel prices by about 2.4 cents a litre and avoiding a record 14.2 million tonnes of greenhouse gas emissions, according to Advanced Biofuels Canada’s latest annual report. The findings come as governments review clean fuel policies that could expand domestic production and energy security.

Why it matters: - Biofuels are now doing double duty in Canada: reducing emissions and easing fuel costs at a time of price pressure and energy-security concerns. - The latest report says policy choices could push domestic clean fuel use above one-third of the national market. - Advanced Biofuels Canada says stronger domestic rules would help turn demand into Canadian investment, jobs and supply-chain resilience.

What happened: - Biofuel use in Canada rose 6% in 2025, according to the eleventh annual Biofuels in Canada report from Navius Research. - The report says that growth helped reduce average fuel prices across Canada by about 2.4 cents per litre. - Clean fuel use avoided an estimated 14.2 million tonnes of greenhouse gas emissions in 2025, a record high. - Advanced Biofuels Canada released the report on Oct. 14, 2026. - The report is commissioned by Advanced Biofuels Canada, co-funded by the Canadian Canola Growers Association and independently authored by Navius Research.

The details: - Biodiesel and renewable diesel consumption grew 5% in 2025 to almost 2.0 billion litres a year. - Ethanol blending grew 4% in 2025 to just over 4.3 billion litres. - Renewable fuel content stayed above regulated minimums. - Ethanol reached roughly 10% of Canada’s gasoline pool in 2025. - Biomass-based diesel content exceeded 7% nationally. - Since the federal Clean Fuel Regulations began in 2023 through the end of 2025, renewable fuel supply is calculated to have lowered gasoline and diesel prices by an average of 2.4 cents per litre versus a no-renewables scenario. - Ethanol blending cut wholesale gasoline costs by about $1.1 billion in 2025. - Ethanol blending has cut wholesale gasoline costs by $14.6 billion cumulatively since 2010. - Volume-based fuel taxes on renewable fuel added about $450 million in fuel taxes for consumers in 2025. - Since 2010, that added tax burden is estimated at $5.7 billion. - If fuel taxes were based on energy content instead of volume, renewable fuel consumption since 2010 would have saved consumers about $3.7 billion. - The carbon intensity of ethanol used in Canada was about 60% below petroleum gasoline. - Biomass-based diesel was about 86% below petroleum diesel in carbon intensity. - In British Columbia, ethanol carbon intensity fell 81% between 2010 and 2025. - In British Columbia, biodiesel carbon intensity fell 82% between 2010 and 2025. - In British Columbia, renewable diesel carbon intensity fell 48% between 2010 and 2025. - The report quantified sustainable aviation fuel supply in Canada for the first time. - British Columbia’s SAF blending rate was nearly 4% in 2025. - That level was three years ahead of when British Columbia’s Low Carbon Fuel Standard first requires a 1% SAF blending rate. - About 1% of Canada’s jet fuel was renewable because of SAF blending in British Columbia. - The SAF supplied in 2025 had an estimated carbon intensity about 68% below conventional petroleum jet fuel. - The report says Canada already has the policy framework, natural resources, infrastructure and technical expertise to build a competitive domestic clean fuels industry.

Between the lines: - The report’s numbers suggest biofuels are becoming a larger part of Canada’s fuel system while also improving their climate performance over time. - The tax findings point to a policy gap: consumers may be getting cheaper lower-carbon fuel, but some tax rules still penalize renewable fuels based on volume rather than energy value. - The aviation finding matters because jet fuel is one of the hardest transportation fuels to decarbonize. - Advanced Biofuels Canada is using the report to argue that current clean fuel reviews should favor domestic production and feedstocks, not just more blending.

What's next: - Governments are reviewing major clean fuel policies, and Advanced Biofuels Canada says those reviews should strengthen market opportunities for Canadian fuels and feedstocks. - The group says renewal of current policies could convert existing demand into more domestic investment, jobs and stronger supply chains. - The report implies biofuel use could keep rising if policy support remains in place and domestic supply keeps expanding.

The bottom line: - Canada’s biofuel market is growing fast enough to lower prices, cut emissions and support energy security at the same time, but policy will likely decide how much of that value stays in Canada.