The Canada Border Services Agency (CBSA) has opened an investigation into allegations of dumping of biofuels in Canada by American producers.
As BIV has reported, B.C. biofuel producers are threatened by a sudden crash in the emissions credit market as a result of what they say are subsidized biofuels flooding into Canada from the U.S.
In January, Tidewater Renewables (TSX:LCFS), which operates a new biofuel refinery in Prince George, filed a countervailing and anti-dumping complaint with the CBSA, which today launched an investigation under the Special Import Measures Act.
The CBSA will investigate “the alleged injurious dumping and subsidizing of renewable diesel from the United States.”
The investigation is being welcomed by Tidewater Renewables and other Canadian biofuel producers.
“This is a positive step forward in enabling Canadian producers to compete in their own country,” said Fred Ghatala, president of Advanced Biofuels Canada.
“Our clean fuels policies are most effective when supported by a financially viable domestic industry. At the same time, North America’s highly integrated clean fuels market is strongest when production and investment flow efficiently and fairly across borders."
A market for biofuels was created through B.C.’s low carbon fuel standard, which requires fuels like gasoline and diesel in B.C. to be blended with some form of renewable fuel to lower their emissions intensity.
In 2023, Tidewater Renewables began producing renewable diesel at its new renewable fuel complex, which has a production capacity of 3,000 barrels per day (bpd).
By producing biodiesel, companies like Tidewater can sell emission credits under the B.C. government’s low carbon fuel standard (LCFS). But that emissions credit market has collapsed, thanks to a recent flood of cheaper biofuels from the U.S., which are subsidized under the U.S. Inflation Reduction Act’s new Clean Fuel Production Credit.
Tidewater has been pushed close to the brink of insolvency, as a result of not being able to sell emission credits.
Last week, the B.C. government responded by announcing that, starting in April, biofuel content requirements for diesel sold in B.C. will need to be met with biofuels made in Canada.
As well, the government will increase the biofuel requirements to increase market demand. Starting in January 2026, the renewable-fuel requirement for diesel will increase from four to eight per cent.
Following last week’s announcement, Tidewater Renewables stock recovered somewhat from an earlier selloff.
Tidewater’s stock rose from $0.63 per share February 27 to $1.63 February 28, after the government’s announcement, and has in recent days been trading above $2 per share.
American biofuel producers have been accused of “double dipping” on subsidies provided by governments in the U.S. and in B.C.
In the U.S., producers receive production subsidies, and when they sell biodiesel into B.C., they can receive emissions credits.
In a press release, Tidewater said it expects provinsional duties will be placed on American biofuels within 90 days, as a result of the CBSA investigation.
“If final duties are imposed at the levels expected by management, valued between $0.50 and $0.80 per litre of renewable diesel imported from the United States, these duties would support long-term market stability for Tidewater Renewables’ renewable diesel production and its related emission credits,” the company said.
“Tidewater Renewables supports free and fair trade in Canada’s renewable diesel market,” Tidewater Renewables CEO Jeremy Baines said in a press release.
“We believe the investigation is an important step in levelling the unfair trade environment and offsetting unfair trade practices that have caused a flood of subsidized and dumped renewable diesel into Canada., significant;ly undermining the Canadian industry.”
