In November, Saskatchewan Deputy Premier Clay Serby made an appeal to federal Environment Minister Rona Ambrose to progress with Canada's renewable fuels strategy.

Serby received a response in late December. Ambrose and Agriculture Minister Chuck Strahl announced in Saskatoon, Saskatchewan, that the government would regulate the use of renewable fuels and would provide a total of CAN$345 million for two programs that would assist farmers and rural communities to seize market opportunities in the agricultural bioproducts sector.

Starting in 2007, the Canadian government will fund the Agricultural Bioproducts Innovation Program (ABIP) and the Capital Formation Assistance Program for Renewable Fuels Production. The latter program, which will receive CAN$200 million, is intended to provide producers with incentives for participation in new renewable fuels production capacity.

The ABIP will receive the remaining CAN$145 million, in order to provide support for cross-sector research networks that are exploring new economic opportunities for agriculture in the areas of bioproducts and bioprocesses, such as biofuels.

According to a press release, the Canadian government intends to require that gasoline average 5 percent renewable content by 2010. The 5 percent could be met by renewable content in either diesel/heating oil or gasoline. Additionally, the government intends to regulate a 2 percent requirement for renewable content in diesel fuel and heating oil by 2012, upon verification that renewable diesel fuel use performs under the range of Canadian weather conditions.

These regulations are expected to take two years to develop and will be included within amendments to the Fuels Division of the Canadian Environmental Protection Act of 1999. These amendments are proposed under Canada's Clean Air Act, which must pass in order for the renewable fuels requirement to take effect.