OTTAWA — Building on last year’s pledge to implement a 2 percent biodiesel standard for Canadian fuel by 2012, the federal Conservatives’ 2007 budget announced yesterday included $2 billion to get the aspiring renewable fuels industry off the ground.

Finance Minister Jim Flaherty says the government will provide about $1.5 billion over 7 years to domestic ethanol and biodiesel producers, and create a $500 million fund for the commercialization of next generation renewable fuels technologies such as cellulose ethanol. The money will also help build new biodiesel facilities in Canada.

About $200 million will also be spent to encourage farmers to invest in biodiesel production.

This program is designed to provide stability and support for the Canadian biofuels industry that is competitive with that offered in other jurisdictions, says Kory Teneycke, executive director of the Canadian Renewable Fuels Association.

Properly implemented, the renewable fuels operating incentive program will lead to over 20 new world-class biofuels facilities in Canada, and provide a new market for over 200 million bushels of Canadian grains and oilseeds, says Teneycke.