Biofuels in gasoline and diesel are increasing and are a leading indicator for future emissions reductions.
Biofuels aren’t as big and bold as the linchpin of decarbonization, electricity, but Canadians are consuming more of them in their vehicles and they’re helping to slow emissions growth. Early indications are that innovative provincial and federal policies can take some of the credit, though more effort is needed (as it often is).
Last year when 440 Megatonnes looked at why Canada’s passenger vehicle emissions have been stuck in neutral, we suggested that biofuels can be a leading indicator to watch for accelerating reductions. We are doing just that in this Insight by asking: how much are biofuels being used and what does that consumption mean for emissions reduction trends?
The answers are that consumption is up and so are avoided emissions. These outcomes correlate with the mix of biofuels policies implemented over the last two decades by federal and provincial governments. As a leading indicator for climate progress, tracking biofuels consumption is useful, with caveats due to limited public data and transparency.
More biofuels are being blended into gasoline and diesel
Public data shows that biofuel consumption has grown rapidly since 2020. According to Statistics Canada, biofuels grew by 64 per cent from 2020 to 2024 nationally. The report Biofuels in Canada 2025 by Navius Research supports that finding and also shows almost no growth in biofuels consumption during the five years prior to 2021.
Growing consumption is good news because using ethanol, biodiesel or renewable diesel—the most common biofuels in Canada—helps decarbonize fossil fuels used in vehicles. Most biofuels have lower lifecycle emissions intensities than gasoline or diesel, and so can reduce transportation emissions when they are blended with or used in place of fossil fuels.
The growing use of biofuels is evident from the rising biofuel content in transportation fuel shown in Figure 1, below. In 2024, ethanol content reached 10 per cent of fuel volume in the national gasoline pool, while the combination of renewable diesel and biodiesel met 7 per cent in the diesel pool. The timing of mandatory fuel regulations are also shown in the figure, with key inflection points noted with the implementation of British Columbia’s Low Carbon Fuel Standard (LCFS) and the federal Clean Fuel Regulations (CFR).
Biofuels use grew unevenly across the country. Statistics Canada shows that consumption in Quebec more than doubled since 2020, while Ontario grew only modestly. British Columbia’s data is hidden by Statistics Canada due to confidentiality, but provincial reporting shows renewable fuel content in transportation fuels more than quadrupled from 2010 to 2024, with biofuels remarkably reaching over 30 per cent of the diesel pool in 2024.
Figure 1
Further good news is that Canada’s domestic biofuels production is also growing, with previously stagnant production increasing by 8 per cent between 2022 and 2023 and almost 30 per cent from 2023 to 2024. Canadian sources such as canola oil for renewable diesel and biodiesel and corn for ethanol are the dominant feedstocks for domestic production.
More biofuels has meant more avoided emissions
Avoided lifecycle emissions—the environmental benefit of using biofuels rather than fossil fuels—has grown five times since 2010. This is due to both increased biofuels consumption and decreased emissions intensity of biofuels, as fuel sellers choose less emissions-intensive feedstocks and adopt more efficient production processes, like using less fertilizer.
The impact of biofuels is often measured by their lifecycle emissions, meaning what is emitted during the whole process from growing the feedstock to combusting the fuel. The declining lifecycle emissions intensity of ethanol, biodiesel, and renewable diesel are shown in Figure 2 below, along with the timing of policies that incentivize lower emissions intensities. The combined emissions intensity of biodiesel and renewable diesel declined from 2015 through 2021 then increased somewhat as the proportion of more emissions-intensive renewable diesel grew.
Note that estimates of lifecycle emissions are not directly comparable to Canada’s National Inventory Report because some of the emissions occur outside Canadian borders.
Higher consumption and lower emissions intensity means biofuels avoided 11 megatonnes of emissions (Mt CO2e) in 2024 on a lifecycle basis, a huge increase from the two Mt CO2e avoided in 2010.
We can’t attribute all the avoided emissions specifically to the federal CFR or any of the provincial low carbon fuels policies. However, policies are clearly the driving factor in biofuels growth with the recent focus on low carbon fuels leading to more avoided emissions.
Figure 2
Biofuels are a promising but imperfect indicator of emissions progress
As a leading indicator of climate progress, biofuels consumption is promising, but as always there are caveats.
On the one hand, higher biofuel use is a sign of progress. The Canadian Climate Institute’s net zero analysis shows that biofuel consumption increases by five to 20 times today’s levels by 2040.
On the other hand, tracking biofuel use means grappling with opaque and inconsistent emissions reporting.
First, a lack of transparency limits quantitative analysis of the indicator. Statistics Canada does not provide renewable fuels data prior to 2020 and they do not disaggregate by type of biofuel or feedstock. The Biofuels in Canada reports are an excellent resource but data download is restricted and the data sources for the report vary across provinces and are sometimes private.
Second, lifecycle emissions calculations are inconsistent, using complex software tools that differ, for example, between the federal CFR and the B.C. LCFS. In addition, the scope and tools used in Canada’s regulatory compliance tools—and biofuels in general—have been criticized for not fully accounting for land-use. Continuing to test the reliability and usability of the tools with international efforts will increase confidence when assessing impacts of clean fuels policies.
Yet even with these challenges, the rising uptake of biofuels is a good news story as Canada struggles to drive down emissions from transportation (and in general). We will keep following this indicator and others that help illustrate Canada’s progress toward a cleaner, more competitive economy.
Alison Bailie is a Senior Research Associate with the Canadian Climate Institute.