North American biofuel production declines due to uncertainty

U.S. and Canadian biofuel companies are reducing production due to uncertainty about green fuel subsidies and trade issues. Tensions between the U.S. and Canada may disrupt a biofuel boom that has benefitted farmers by increasing demand for crops. The uncertainty stems from various factors, including U.S. tariffs on imported feedstocks and unclear biofuel subsidy programs, particularly the Biden-era tax credit that influences production costs. Experts warn that this situation could impact rural communities and efforts towards a greener economy. Some companies, like Federated Co-operatives Limited, have paused projects in Canada. In the U.S., biodiesel production has slowed, reaching its lowest levels in five years. Despite a 60% growth in production capacity since 2022, recent policy changes and rising costs threaten profits for major companies like Archer-Daniels-Midland and Bunge. Trade tensions have intensified, with recent tariffs impacting Canadian canola products bound for the U.S. Farmers are concerned about falling prices and uncertain planting decisions. Canadian officials are looking for ways to boost domestic demand as market conditions worsen. Overall, producers are facing challenges from government policies and the changing landscape of the biofuels market. These uncertainties create difficulties for planning and investment both in the U.S. and Canada.