Canada’s forest sector is preparing to accelerate biomass energy projects following the introduction of new Investment Tax Credits (ITCs) designed to support renewable energy development across the country.
Industry leaders view the measure as a long-awaited step toward restoring investor confidence after years of policy uncertainty. The tax credits could help modernize mill energy systems while reinforcing Canada’s role as a supplier of renewable energy and forest-based resources.
Biomass projects use forest residuals such as bark, sawdust, and wood chips to generate locally produced heat and electricity. For pulp, paper, and wood processing facilities, this approach can improve energy efficiency while reducing waste and emissions.
According to the Forest Products Association of Canada (FPAC), the forest sector directly employs nearly 200,000 Canadians and supports another 200,000 jobs in transportation, maintenance, and manufacturing. Many rural and northern communities depend on these operations for economic stability.
“Forest biomass energy production has the potential to provide Canadians with sustainable sources of heat and power while creating jobs for rural and urban communities,” said Derek Nighbor, President and CEO of FPAC. He added that the adoption of biomass ITCs represents an important opportunity for economic growth, energy sovereignty, and decarbonization.
Industry estimates suggest the tax credits could help unlock about $6 billion in biomass projects over the life of the program. The measure could also support thousands of jobs in rural regions, contribute to Canada’s clean electricity targets, and encourage further modernization of forest sector facilities.
The Forest Products Association of Canada (FPAC) represents Canada’s wood, pulp, and paper producers in national and international policy discussions on trade, environment, and industry development. The sector contributes about $21 billion to Canada’s GDP and directly employs nearly 200,000 people across the country.
Source: FPAC
