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Ottawa Earmarks $500M for Biofuels

Canada’s burgeoning biofuels industry got a boost this fall with a government-sponsored $500 million fund dedicated to investing in new fuel production facilities and technologies.

The NextGen Biofuels Fund, which launched in September, will exclusively fund Canadian businesses that develop renewable biomass-based fuels. The fund will provide up to 40% of project costs for ventures that can demonstrate that their technology and processes are scalable.

The initiative is the latest major federal investment in cleantech that will be managed by Sustainable Development Technology Canada, an Ottawa-based non-profit that was launched in 2001. The organization also runs the $550 million SD Tech Fund, which invests in projects that address climate change, air quality, clean water and clean soil.

James Stanford, chairman of the SDTC, says that the new fund’s focus on biofuel is, in part, a recognition that Canada, with its vast territory and richness of natural resources, has abundant supplies of biomass. He sees the fund “encouraging the growth and retention of home-grown technologies” to turn raw materials into renewable fuel.

Canada is considered a ripe supplier of cellulose-based feedstocks, which have an energy content that is significantly higher than conventional biofuel materials, according to SDTC. Cellulose feedstocks include agricultural wastes, plant wastes from industrial processes, trees, and energy crops grown specifically for fuel production, such as switchgrass.“While Richard Branson, Vinod Khosla and others are making major commitments to this space, this is largest dedicated pool of capital yet assembled for next generation biofuels,” says Nicholas Parker, chairman and founder of the Cleantech Venture Network.Although the biofuels fund is for Canadian projects, companies based outside of Canada are eligible to set up in the country to participate in the program. A SDTC spokesperson acknowledged that the organization has received inquiries from U.S. companies, but declined to disclose specifics. —Joanna Glasner