Assessing the use of liquid biofuels in the Northwest Territories

To determine whether liquid biofuels would be practical for use in the territory, the GNWT contracted the Saskatchewan Research Council (SRC) to conduct a feasibility study.


The Northwest Territories’ 2030 Energy Strategy (Energy Strategy) sets out the Government of the Northwest Territories’ (GNWT) long-term approach to supporting secure, affordable and sustainable energy supply and use in the NWT.

In the Energy Strategy, the GNWT committed to assessing whether liquid biofuels would be practical for transportation and other uses in the NWT.

Biofuels are fuels that are derived from plant material or animal waste. Since these materials (sometimes called “feedstock”) can replenished naturally, biofuels are considered low-carbon fuels. The NWT already uses firewood and wood pellets as a type of solid biofuel to reduce the use of heating oil. In fact, we are a leader in Canada; wood currently meets approximately 25 per cent of our territory’s heating needs.

Liquid biofuels can be used to replace traditional fossil fuels like diesel and gasoline to reduce greenhouse gas (GHG) emissions. Examples of liquid biofuels include ethanol (alcohol), biodiesel and renewable diesel.

Ethanol and biodiesel

  • In other places in Canada it is common to see gasoline and diesel for sale blended with ethanol or biodiesel, and these have been in use for some time. These are not currently used in the NWT because they do not perform well in our cold climate, and would require new infrastructure to allow for longer-term storage due to the weather.

Renewable diesel

  • Renewable diesel is an emerging technology, and is considered an advanced biofuel in that it can be made very similar to fossil-fuel-based diesel.

  • The GNWT is very interested in the potential use of renewable diesel in the NWT, as over 40 per cent of our GHG emissions are caused by diesel-powered transportation, and there are very few technology options at this time to address this issue.

To determine whether liquid biofuels would be practical for use in the territory, the GNWT contracted the Saskatchewan Research Council (SRC) to conduct a feasibility study. This study considered factors such as availability, price, long-term storage and how our cold climate would affect liquid biofuels throughout their transportation, handling, storage and use.

The study focused on the potential use of ethanol and renewable diesel for road transportation and renewable diesel for space heating of buildings. Other potential uses of these fuels (for power generation or remote mining sites, for example) were not considered.

Broadly speaking, the study confirmed for the GNWT that liquid biofuels are an important longer-term option for reducing GHG emissions in the NWT.

It is clear that using liquid biofuels for road transportation and space heating could have the potential to significantly reduce GHG emissions in the territory in the future, and a significant increase in Canada’s production capacity for liquid biofuels – including renewable diesel – is expected to occur in the next few years.

However, a number of significant challenges to wide-ranging use were also identified:

  • The NWT has little to no availability of the feedstock(s) required to produce its own liquid biofuels, so products would have to be purchased from outside of the territory;
  • Private petroleum distributors are generally unfamiliar with liquid biofuels and expressed concerns about whether they would be able to handle and store these products; 

  • Renewable diesel is not currently produced in Canada and must be imported;

  • There is very limited global supply of renewable diesel, and what is being produced cannot be used in the NWT as it does not meet the specifications we need for our cold climate; and

  • Based on estimated pricing, it would be very expensive to replace gasoline with ethanol blends or replacing diesel with renewable diesel – in the order of millions of dollars per year in additional expenses to NWT consumers, even when a $50/tonne carbon tax is assumed.

Despite their long-term promise, in the short term no suitable extreme cold climate products are currently available that would allow for secure, affordable and sustainable use in the NWT. Moving forward the GNWT will continue to carefully monitor liquid biofuel supply and consumption patterns in Canada, and will look for funding opportunities as well as opportunities to conduct pilot testing, should new products emerge that would be more suitable for our Arctic and sub-Arctic conditions.