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Canada’s 2030 Emissions Reduction Plan and Biofuel Mandates Are a Demand Driver for Farmland

CALGARY, ALBERTA, CANADA, October 7, 2022 / -- “Biofuels could supply 9% of world transport demands by 2030, with production of 6 million barrels/day. According to the Food and Agriculture Organization of the United Nation, meeting this growing demand will require around 35 million dedicated hectares of farmland,” said Veripath Partners co-founder Stephen Johnston.

As Canada and other nation work toward net-zero emissions by 2050, demand for biofuels grows. According the Government of Canada, Canada’s 2030 Emissions Reduction Plan “will increase demand for low carbon intensity fuels, including those derived from canola and other agricultural crops. This represents an opportunity for Canadian farmers to diversify their business. For example, the canola sector has identified domestic biofuels opportunities as an important element of market diversification.” (Government of Canada, 2022-07-07)

The Clean Fuel Regulations enabling the 2030 Emissions Reduction Plan require gasoline and diesel suppliers to a decrease the carbon intensity and pollution of these fuels by approximately 15% by 2030.

Canadian provincial jurisdictions with biofuel mandates currently in place include:

Alberta: the Renewable Fuels Standard requires a minimum annual average of 5% renewable alcohol in gasoline and 2% renewable diesel in diesel fuel sold in Alberta by fuel suppliers.

Manitoba: Manitoba’s Ethanol Mandate requires fuel suppliers in Manitoba to blend at least 10% of ethanol in their gasoline. The Biodiesel Mandate requires fuel suppliers to blend 5% renewable content in on- and off-road diesel fuel.

Ontario: the Cleaner Transportation Fuels regulation requires that fuel suppliers blend 10% of renewable content in gasoline from 2020 to 2024. The renewable content requirement increases to 11% in 2025, 13% in 2028, and 15% in 2030 and onwards.

Saskatchewan: the Renewable Diesel Act requires fuel distributors to include 2% renewable diesel content. The province also has a 7.5% ethanol mandate.

British Columbia: the Renewable and Low Carbon Fuel Requirement mandates a 5% ethanol content in gasoline and 4% in diesel fuel.

Quebec: effective January 1, 2023, gasoline and diesel fuels distributed in Québec will incorporate clean fuels. Quebec will require 10% low-carbon fuel content in gasoline in 2023 and increase this to 15% by 2030. Low-carbon fuel content in diesel will begin at 3% in 2023 and increase to 10% by 2030.

Source: Government of Canada, 2022-07-07

Veripath is a Canadian alternative investment firm focusing on farmland. Veripath believes that there are a number of factors that are supportive of the Canadian farmland investment premise, a few of which are highlighted below:

• Value: Canada has some of the most competitively priced farmland in the developed world – particularly on a productivity adjusted pricing basis.

• Diversification: Farmland exhibits low correlation to traditional stock/bond investments so can improve portfolio risk diversification.

• ESG: Western Canadian zero-till portfolios capture material amounts of carbon.

• Inflation Hedging: Farmland has historically had strong inflation/stagflation hedging capabilities and outperformed in real terms during periods of low real rates/high inflation.

• Demand: Farmland is a non-volatile way to capture the anticipated incremental demand coming from population growth and growing demands for food, feed, fuel and water globally.

Disclaimer: This document is for information only and is not intended to provide the basis of any credit or other evaluation, and does not constitute, nor should it be construed as, an offer to sell or a solicitation to buy securities of Veripath, the Funds or any other entity, nor shall any part of this document form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities. No reliance should be placed on the completeness of the information contained in this document. This document is not intended to be a comprehensive review of all matters concerning Veripath. Prospective purchasers of this investment opportunity may be provided with formal offering documents and will need to be qualified for investment prior to making any investment. No person has been authorised to give any information or to make any representation not contained in such formal offering documents. No securities regulatory authority or regulator has assessed the merits of the proposed offering or reviewed any of the offering documents. This investment opportunity is speculative and involves a high degree of risk. There is a risk that any investment made will be lost entirely or in part. Only prospective investors who do not require immediate liquidity of their investment and who can afford the loss of their entire investment should consider this investment. This document may contain forward-looking information and statements (collectively, “forward-looking information“) within the meaning of applicable securities laws.

Forward-looking information is provided for the purpose of providing information about the current expectations and plans of management of Veripath relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. All statements other than statements of historical fact may be forward-looking information. More particularly and without limitation, this document contains forward-looking information relating to Veripath’s investment objectives and strategies and its expectations with respect to the benefits of investing in Canadian farmland. Forward-looking information is based upon a number of assumptions and involves a number of known and unknown risks and uncertainties, many of which are beyond Veripath’s control, which would cause actual results or events to differ materially from those that are disclosed in or implied by such forward-looking information. Although management believes that expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information since no assurance can be given that such information will prove to be accurate. Veripath does not undertake any obligation to publicly update or revise any forward-looking statements except as required by applicable securities laws. There is no guarantee of performance and past or projected performance is not indicative of future results.

Veripath Farmland
Veripath Farmland Fund
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