Biofuel consumption in Canada grew 6% in 2025, with biodiesel and renewable diesel near 2 billion litres. Canola is seeking to expand its share, currently behind tallow, through import restrictions and amendments to the Clean Fuel Regulations.
Biofuel consumption in Canada grew 6% in 2025, a slowdown from the 10% increase recorded in 2024, according to the eleventh edition of the annual Biofuels in Canada report, produced by Navius Research for Advanced Biofuels Canada.
Biodiesel and renewable diesel rose 5% to almost 2 billion litres per year, below the 10% growth of 2024. Ethanol blending expanded 4% to slightly more than 4.3 billion litres, compared with 6% the previous year.
Brittany Wood, senior manager of transportation and trade policy at the Canadian Canola Growers Association, welcomed the figures despite the slowdown. “We still see this as positive,” she said. “We're continuing to grow.”
Canadians consumed 544 million litres of canola-based renewable diesel in 2025. It was the second most used feedstock, behind the 758 million litres of tallow-based biofuel and ahead of the 411 million litres of soy-based diesel.
That second place does not satisfy the canola sector. “We would want to have a bigger piece of that pie in terms of market share and also volumes,” said Wood.
The sector is pressing the federal government to restrict imports of what it considers fraudulent used cooking oil, which is taking market share away from domestic feedstocks. It is also pushing for amendments to the Clean Fuel Regulations that would increase biofuel production and prioritize North American feedstocks.
The government recently published its draft amendments. Wood noted that the industry is still “digging into the details” of the proposals, but at first glance they appear to fall short of expectations: “We're not seeing any sort of immediate solid demand signals that has come out of it.”
Imperial Oil began operations at its new renewable diesel plant in Strathcona, Alberta, during the summer of 2025, with capacity to produce 1 billion litres per year.
Farm Credit Canada published its own report, which shows that biodiesel and renewable diesel production in Canada averaged 150 million litres per month during the first seven months of 2026, up 152% year on year. Ethanol production averaged 156 million litres per month, 5% more than in 2025.
Canadian renewable diesel plants used 800,000 tonnes of vegetable oil during the first seven months of 2026, compared with 235,000 tonnes of fats, tallows and used oils.
The FCC report notes that ethanol has a price advantage over gasoline, even after adjusting for its lower energy content: imported ethanol costs about $1.20 per litre compared with $1.75 per litre for gasoline. That is not the case for canola-based renewable diesel: the canola oil alone costs about $4.70 per litre, before other costs, compared with diesel at $2.60 per litre.
The Biofuels in Canada report argues that biofuels reduced fuel prices in Canada by an average of 2.4 cents per litre between the entry into force of the Clean Fuel Regulations on July 1, 2023, and the end of 2025. The savings associated with ethanol more than offset the higher costs of renewable diesel.
The use of clean fuels reduced greenhouse gas emissions by 14.2 million tonnes in 2025. Ethanol had an average carbon intensity 60% below petroleum gasoline, while biomass-based diesel was 86% below petroleum diesel.
