Biofuel Subsidies

Biofuel Subsidies in Canada

This reports finds that In the three-year period ended 2008, total government transfers to biofuels approached $1 billion CAD, with an average of around $300 million CAD per year in Canada. The subsidies accounted for 20 to 70 per cent of the retail market prices for the biofuels. While transfer payments are levelling off, ethanol from corn (maize), the most common product in Canada, requires subsidies of between $0.50 and $0.70 a litre to replace an equivalent litre of fossil energy—enough to purchase the displaced fuels with the subsidy alone.
 
To remove one tonne of greenhouse gases from the atmosphere via corn- or wheat-based ethanol costs between $200 CAD and $400 CAD. By comparison, one tonne of CO2 reductions cost $4.25 CAD on the Chicago Climate Exchange or $33.85 CAD on the European Climate Exchange.
 
 

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This article is part of the series Biofuels - At What Cost?.