Canada's biofuels law on trial: Bill C-33 and the warnings of 2008

In June 2008, the Senate of Canada's committee on energy, the environment and natural resources heard witnesses on a short bill with large consequences. Bill C-33 amended the Canadian Environmental Protection Act so that Ottawa could require a minimum share of renewable fuel in the gasoline and diesel sold across the country. Industry witnesses described a new market for Canadian farmers. Civil-society witnesses, including the head of ETC Group, argued against it, warning that it would add to a world food emergency for a marginal climate gain. The Senate passed the bill on 26 June 2008.

Seventeen years later the mandate is still in place and has been folded into a much larger regulation. It is a good moment to check the warnings against the record.

What the bill did

C-33 itself was mostly enabling legislation. It gave the federal government clear authority under the environmental protection act to regulate the blending of renewable fuels, along with the reporting, trading and compliance machinery that goes with a mandate. The targets came from a plan the government had announced in December 2006: an average of 5 per cent renewable content in gasoline by 2010, and 2 per cent in diesel and heating oil by around 2012.

The Renewable Fuels Regulations that followed set the gasoline requirement from 15 December 2010 and the diesel requirement from 1 July 2011. Money came alongside. The ecoENERGY for Biofuels programme offered producers up to $1.5 billion in operating incentives over nine years, and a separate $500 million fund was set aside for "next-generation" plants that would make fuel from non-food material.

In practice, Canadian ethanol came mostly from corn in Ontario and Quebec and from wheat on the Prairies, topped up with imports from the United States. Biodiesel drew heavily on canola oil.

The world outside the committee room

The timing could hardly have been worse for the bill's sponsors. Food prices had climbed through 2007 and early 2008, and the FAO's food price index peaked in June 2008, the same month the Senate voted. Several large rice exporters had restricted shipments. In April, food riots in Haiti contributed to the fall of its government. Protests had broken out in a long list of countries from Egypt to Cameroon.

Biofuels were at the centre of the argument about why. The United States, whose ethanol programme had grown enormously after 2005, said biofuels explained only a few per cent of the global price increase. A World Bank working paper by the economist Don Mitchell, made public in July 2008, attributed most of the rise to biofuels and their knock-on effects on stocks, land use and trade policy. Estimates from the International Food Policy Research Institute fell in between. Less than two weeks after the Senate vote, a British government-commissioned review, the Gallagher Review, recommended slowing the growth of the UK's biofuel obligation because of the risks to land and food.

Biofuels had also taken over meetings that were supposed to be about something else. The biodiversity convention's conference in Bonn in May 2008 spent a large share of its energy on them, and so did the FAO's high-level food security conference in Rome in early June. African delegations in particular pressed for caution, with little success.

So the senators had in front of them a bill drafted in calmer times, and a world that had changed in the six months since. They passed it anyway.

What Canada built

The mandates did what mandates do. Blending became routine, a domestic ethanol and biodiesel industry grew up around the requirement, and nobody seriously proposed removing it. Canadian provinces added their own rules on top. British Columbia has run a low-carbon fuel standard since 2010, and several provinces set higher ethanol requirements than the federal minimum.

The $500 million next-generation fund was a different story. Cellulosic ethanol, the great hope of 2008, proved slow and expensive everywhere. Ottawa's Iogen, one of the world's early cellulosic pioneers, ended up supplying its technology to a plant in Brazil rather than building commercial capacity at home. In the United States, the Environmental Protection Agency cut the legally required volumes of cellulosic fuel year after year because the industry could not produce them.

What did grow, from the late 2010s onwards, was a newer product: renewable diesel, made by treating vegetable oils and animal fats with hydrogen so that it can replace fossil diesel without blending limits. That has turned canola, soy oil and used cooking oil into fuel feedstocks on a scale nobody imagined in 2008, and it helps explain the wave of new canola crushing capacity announced across the Prairies since 2021.

From blending mandates to carbon intensity

The Clean Fuel Regulations, published in July 2022, changed the frame. Since 1 July 2023 they have required suppliers of gasoline and diesel to reduce the lifecycle carbon intensity of their fuels each year to 2030, with the 2030 requirement set at roughly 15 per cent below 2016 levels. Suppliers can comply by cleaning up their own production, by supplying lower-carbon fuels such as ethanol, biodiesel and renewable diesel, or by buying credits created when others do, including by charging electric vehicles. The old minimum blending volumes were carried into the new rules and the Renewable Fuels Regulations were repealed.

Two features are worth noticing. First, fuels are now scored by their estimated lifecycle emissions rather than simply counted as renewable, which is a quiet admission that not all biofuels are equal. Second, the regulations include land-use and biodiversity criteria for crop feedstocks, aimed at keeping fuel crops from driving the conversion of forests and wetlands. Both reflect lessons learned after 2008.

The politics have stayed hot. Opposition Conservatives have attacked the Clean Fuel Regulations as a second carbon tax. When Prime Minister Mark Carney cut the consumer fuel charge to zero from 1 April 2025, the fuel regulations stayed in place. Meanwhile, after China imposed 100 per cent tariffs on Canadian canola oil and meal in March 2025, prairie farm groups had a fresh reason to press for more domestic demand for fuel made from canola. The constituency the 2008 critics predicted is real and organised.

The warnings, checked

Some of the starker forecasts of the time did not come true in the form predicted. Estimates of world hunger fell for several years after 2008 before rising again from the mid-2010s, driven more by conflict, economic shocks and, later, the pandemic than by fuel policy. The UN's 2024 report on the state of food security, led by the FAO, put the number of people facing hunger in 2023 at around 733 million. Biofuels were one pressure among several, not the decisive one.

What the record says

The 2008 debate is often remembered as food against fuel. The more lasting argument was about lock-in. A mandate creates plants, contracts, farm incomes and lobbying power, and those outlive the conditions that justified it. Critics at the time made that point and were right. Policy did not reverse; it was refined around the industry that already existed.

The refinements are real. Carbon-intensity scoring and feedstock criteria are better tools than a flat blending requirement, and they owe something to the arguments made in committee rooms in 2008. But they also pull more farmland into the energy system through renewable diesel, at a moment when canola growers need new buyers. The same tension runs through earlier fights over biofuels and transgenic crops, through the market structure of an agribusiness sector dominated by a few firms, and through the broader promise of a green economy built on biomass.

The question the Senate committee faced in 2008 is still the right one to put to any new fuel rule: once the industry exists, who will be in a position to say it has stopped serving its purpose, and will anyone listen?