Canada’s renewable propane story is evolving. Renewable propane — a low-carbon, drop-in fuel chemically identical to conventional propane and made from nonpetroleum feedstocks — is beginning to enter the market. With the right incentives and sustained policy support, Canada can move from pilot production to full commercial scale.
Today, renewable propane is mainly produced as a by-product of renewable diesel and sustainable aviation fuel refining, using feedstocks such as vegetable oils, animal fats and used cooking oil. Its carbon intensity varies by source and process — renewable propane made from domestic used cooking oil has a carbon intensity of about 21 gCO₂e/MJ (or grams of carbon dioxide equivalent per megajoule of energy), compared to 72 gCO₂e/MJ for conventional propane.
Over the past 18 months, renewable propane and renewable dimethyl ether (rDME) production in Canada has advanced from concept to commercial reality. In Quebec, the Association Québécoise du Propane and Oberon Fuels launched the province’s first pilot blending rDME with propane in late 2024, showing how agricultural residues can fuel a circular economy. If scaled, this innovation could cut emissions equivalent to removing 6,000 vehicles from Quebec’s roads each year.
Early in 2025, Superior Propane announced it was supplying the city of Chilliwack in British Columbia with 100% renewable propane for its municipal fleet, while Propane Levac in Ontario imported renewable propane to serve a range of customers, from homes and farms to food trucks.
Most recently, Parkland achieved a Canadian first by producing renewable propane at its Burnaby, British Columbia, refinery through coprocessing biofeedstocks such as canola oil, tallow and tall oil — achieving roughly one-third the carbon intensity of conventional propane.
Propane is essential across Canada’s economy, powering agriculture, mining, industry, transportation, and remote, rural and Indigenous communities. It delivers dependable, affordable energy and serves as a critical backup during grid emergencies.
Renewable propane can reduce emissions while maintaining reliability, especially in regions not connected to natural gas grids. It also pairs well with electric heat pumps to ensure reliable heat in cold climates, and it complements renewable electricity, providing backup for solar or wind when generation dips.
For farmers, renewable propane represents a growth opportunity. Cultivating nonfood crops, such as camelina and switchgrass, can supply feedstocks for renewable fuels, turning underused land into productive assets and diversifying farm revenue.
Canada’s Renewable Propane Barriers & the Path Forward
Canada has the technology and feedstocks to produce renewable propane, but realizing its full potential requires a competitive policy framework. Incentives are critical to attract investment and make renewable propane cost competitive.
Recent moves are encouraging. The Canadian federal government’s new $370 million biofuel production incentive and the forthcoming amendments to the Clean Fuel Regulations (effective January 2026) aim to stabilize the domestic biofuels market — especially for canola-based fuels — in response to global tariffs.
Momentum is building at the provincial level as well. Manitoba, for example, is exploring ways to expand renewable fuel use and has commissioned a white paper to map biofuel opportunities across its agricultural economy.
Canada’s propane industry is embracing innovation. With the right incentives and government support, renewable propane can be produced domestically at scale and deliver dependable, lower-emission energy for Canadians.
