Draft Submittal 7/3/2025…

MOEP Submittal 7/4/2025

Verbio Diesel Canada Corporation (VDC), operating a biodiesel production facility in Welland, Ontario, is pleased to submit comments regarding the proposed temporary domestic bio-based content requirement for diesel fuel under Ontario’s Cleaner Transportation Fuels (CTF) regulation.

VDC proudly supports over 40 well-paying Canadian jobs and contributes meaningfully to the local tax base. Our facility produces approximately 170 million liters of biodiesel annually, along with 14.2 million liters of crude glycerin—a valuable by-product of the biodiesel manufacturing process.
Our comments for consideration are:

1. Prioritize Canadian-Origin Feedstock to Maximize Domestic Value
To ensure Canadians receive the full economic and environmental benefits of the biodiesel value chain, we strongly recommend that all feedstock used to meet the bio-based content requirement originate from within Canada. This approach aligns with a “Canada First” initiative—ensuring that not only biofuel producers, but also Canadian farmers, rural communities, and local businesses share in the opportunity.

Canada’s agricultural sector is robust and more than capable of supplying the necessary feedstock to meet current and future biofuel mandates. Prioritizing domestic feedstock will strengthen rural economies, create additional jobs across the supply chain, and reinforce national energy security.

2. Encourage Year-Round Biodiesel Blending Through Policy Support. Explicit provisions or incentives to encourage year-round biodiesel blending. Such measures could include:
• Policy signals or blending targets that apply across all seasons
• Support for cold-weather additives or infrastructure upgrades
• Recognition of year-round blending in compliance credit systems

These steps would help normalize year-round blending practices, reduce seasonal volatility in biodiesel demand, and support the long-term viability of domestic biofuel producers.

3. Act Swiftly to Safeguard Canadian Biofuels Producers Amid Looming 45Z Disruption
With the U.S. Section 45Z Clean Fuel Production Credit set to take effect on January 1, 2026, time is of the essence. This policy—designed to reward low-carbon fuel production based on lifecycle emissions—will significantly shift market dynamics across North America.

Already, contracts are being secured for U.S.-origin biofuels to enter the Canadian market, particularly Ontario, threatening to displace domestic production. Without immediate and decisive action, Canadian biofuels producers risk being undercut by heavily subsidized U.S. imports, placing local jobs, rural economies, and long-term investment at serious risk.

To prevent this, we urge the Ontario government to:
• Accelerate implementation of domestic content preferences under the CTF regulation
• Establish clear procurement signals that prioritize Canadian-produced fuels
• Coordinate with federal counterparts to ensure alignment with Canada’s Clean Fuel Regulations and trade strategy Canada has the infrastructure, feedstock, and expertise to lead in clean fuel innovation—but only if policy keeps pace with global competition.

4. British Columbia Demonstrates Feasibility of Canadian-Origin Blending
British Columbia has already taken decisive action by increasing its renewable diesel blending requirement from 4% to 8%, effective April 1, 2025, under its Low Carbon Fuel Standard (LCFS). Crucially, the regulation mandates that all renewable diesel used to meet this target must be produced in Canada.

This policy not only supports local producers and jobs but also proves that Canadian-origin blending at meaningful levels is both practical and scalable. The province’s leadership offers a compelling precedent for Ontario and other jurisdictions.

Below are internal estimates that demonstrate ample Canadian production capacity to support similar mandates nationwide

Facility/Region Estimated Annual Biodiesel Production (liters)
Verbio Diesel Canada (Welland, ON) 170,000,000
Facility A (Western Canada) 120,000,000
Facility B (Prairies) 95,000,000
Facility C (Eastern Canada) 80,000,000
Facility D (Quebec) 60,000,000
Total Estimated Capacity 525,000,000

These figures do not include renewable diesel or co-processed fuels, which could further expand domestic supply. With strategic policy alignment and investment, Canada is well-positioned to meet—and exceed—provincial blending targets using homegrown fuels.

5). Recommendation to Make Biodiesel Blending Extension Permanent
We recommend that the proposed extension of Ontario’s biodiesel blending period be made permanent, rather than aligning its sunset with the temporary provisions of the U.S. 45Z Clean Fuel Production Credit recently passed by Congress, awaiting signature by President Donald Trump.

A permanent policy would:
• Enable long-term investment planning for producers like Verbio, ensuring the competitiveness and operational efficiency of our Welland facility.
• Mitigate uncertainty stemming from pending tariff negotiations and shifting U.S. policy, which could otherwise erode Canada’s competitive advantage in renewable fuels.
• Support Ontario’s climate goals by locking in a proven pathway to reduce greenhouse gas emissions through expanded use of low-carbon biodiesel.
• Protect and grow Canadian jobs in clean energy manufacturing and feedstock supply chains, reinforcing Ontario’s leadership in sustainable economic development.
Given the province’s commitment to reducing emissions and fostering green innovation, a permanent extension would provide the policy certainly needed to unlock further investment and production capacity—while ensuring Ontario remains resilient amid global policy shifts.

We recommend that implementation of the proposed domestic bio-based content requirement occur by early in the third quarter to ensure continuity of production for Canadian producers. Thank you for considering our input.

JGNorthrup
President & CEO
Verbio North America Holdings Corp
July 4, 2025