Market Snapshot: Feedstocks to End Use: Bioenergy’s Role in Canada’s Energy Future

Release date: 2026-07-02

Canada’s Energy Future 2026 (EF2026)^Footnote 1 results show notable growth—10% to 150%—in bioenergy demand, between 2023 and 2050. EF2026 projects growth in various types of bioenergy through detailed modeling under four scenarios: Lower^Footnote 2, Current Measures (CM)^Footnote 3, Higher^Footnote 4, and Canada Net-Zero (CNZ)^Footnote 5. These scenarios show bioenergy demand growth of 10%, 32%, 73%, and 150% respectively, between 2023 and 2050 (Figure 1).

Figure 1: Canada’s Bioenergy Demand by Type and Scenario

Canada’s bioenergy system includes many different types of bioenergy. Different types of bioenergy are useful for different types of applications within a range of technologies. Each EF2026 scenario produces a distinct evolution of feedstocks, fuels, and end uses by 2050.

Biomass—Canada’s primary bioenergy feedstock—is not a single resource but a diverse group of materials that differ in aspects like cost, availability, and energy content. EF2026 modeling includes roughly 30 biomass feedstocks, grouped into six categories^Footnote 6: Forestry and Harvested Wood Products (HWP) residues, Firewood, Energy Crops, Crop residues, Livestock residues, and Urban Wastes.

The largest of these categories is Forestry and harvested wood products (HWP) residues—including wood residues, mill residues, and pulping liquor^Footnote 7. These feedstocks have traditionally played a key role in Canada’s bioenergy system. Although their total use increases, forestry residues make up a declining share of the future feedstock mix because demand grows faster for energy crops and livestock residues. Energy crops and livestock residues play a vital role in scaling up liquid biofuels, including biodiesel and renewable diesel, ethanol^Footnote 8, and sustainable aviation fuel (SAF).

Figure 2: Energy Flow of Canada’s Bioenergy System

Canada’s bioenergy is consumed as multiple types of biofuels

Feedstocks can be converted to biofuels through multiple technology pathways, each with different efficiencies and energy conversion losses. In addition, each biofuel could be used in different industry sectors (Figure 2).

Solid Biofuels: Firewood, and forestry and HWP residues can be converted to commercial biomass products like wood chips, pellets, and commercial firewood. These products are classified as solid biofuels (including pulping liquor), which remain the primary form of biofuel produced and used in Canada. Solid biofuels are mainly used for heat generation in industrial applications. In CNZ, electricity and hydrogen production also become major consumers of solid biofuels (Figure 3). However, solid biofuel demand in residential and commercial sectors reduces in all scenarios, mainly driven by lower usage of firewood for heating. By 2050, demand for solid biofuels increases by 32% in the Higher scenario and by 83% in the CNZ scenario. In the CNZ scenario, this growth drives increased use of crop residues—particularly after 2040—as a solid biofuel feedstock.

Biodiesel and Renewable Diesel: Biodiesel and renewable diesel are diesel alternatives primarily blended with fossil fuel-based diesel and produced from feedstocks like animal fats, waste cooking oil, vegetable oils, and other residues. While most production currently relies on conventional technologies, EF2026 results show advanced technologies becoming more important after 2035, particularly in the Higher and CNZ scenarios. Demand increases across all scenarios due to federal and provincial decarbonization policies, especially fuel carbon intensity regulations and blending mandates. In the CNZ scenario, industrial decarbonization drives a significant increase in renewable diesel use in the industrial sector (Figure 3).

Ethanol: Ethanol is primarily blended with gasoline in Canada, making its demand closely linked to gasoline consumption and federal and provincial decarbonization policies. Ethanol demand increases in all scenarios except the CNZ scenario, where declining gasoline use reduces demand^Footnote 9. Traditional ethanol feedstocks include energy crops like corn and wheat. Corn remains the dominant feedstock, with manure-based livestock residues playing an increasing role in future scenarios.

Sustainable Aviation Fuel (SAF): SAF is an alternative aviation fuel used to decarbonize the transportation sector and becomes a major biofuel in CNZ. SAF is primarily produced through co-production with renewable diesel in biorefineries and by converting ethanol to SAF^Footnote 10. This means SAF feedstocks overlap with renewable diesel and ethanol’s—energy crops and livestock residues. As gasoline demand declines in CNZ, ethanol production capacity increasingly shifts toward SAF production. CNZ also includes a small quantity of synthetic SAF^Footnote 11.

Gaseous biofuels: Gaseous biofuels include biogas and renewable natural gas (RNG). These are produced primarily from urban wastes such as municipal solid waste^Footnote 12, with smaller contributions from livestock and crop residues. Although historically small in Canada, RNG demand is projected to grow exponentially across all scenarios, driven by provincial blending mandates and broader efforts to decarbonize natural gas systems.

Electricity and Hydrogen from Bioenergy: Electricity and hydrogen sourced from bioenergy are secondary energy types^Footnote 13. Electricity is generated mainly from solid biofuels such as wood residues and pulping liquor, with minor contributions from biogas. Pulping liquor use is largely tied to pulp mill cogeneration facilities. CNZ also features bioenergy with carbon capture and storage (BECCS) for both electricity (BECCS is included under electricity in the figures) and hydrogen. Hydrogen from bioenergy is produced from solid biofuels. Future electricity generation and hydrogen production are key drivers of increased solid biofuel demand in the CNZ scenario.

Figure 3: Feedstock Use in Biofuels and Biofuel Use in End Uses

Date modified:

2026-06-30