Amendments to the Biofuels Act would establish a new grant program to support biodiesel production in Manitoba, Innovation, Energy and Mines Minister Dave Chomiak says.

“We will replace the fuel-tax exemption for Manitoba biodiesel with a production grant, payable directly to provincial producers,” said Chomiak. “We expect paying a grant to provincial producers, rather than a fuel-tax exemption, will be more effective in making producers competitive and thus encourage the local production of biofuels.”

The program would offer a grant of 14 cents per litre to biodiesel producers over a five-year period, beginning immediately. The grant will be capped at 20 million litres per year, which represents roughly the amount of biodiesel required to meet Manitoba’s biodiesel sales mandate.

Manitoba currently has one licensed commercial biodiesel producer, Speedway International in Winnipeg, with the capacity to produce 20 million litres annually. Two other plants in rural Manitoba, Bifrost Bio-Blends in Arborg and Eastman Bio Fuels in Beausejour, are also expected to become licensed commercial facilities this month and add another 15 million litres of biodiesel production capacity.

Other amendments to the act focus on measures that would support compliance by fuel suppliers with the province’s biofuels mandates.