The Canada Road Transportation and Sustainable Fuel Market is forecast to grow at a CAGR of 12.1%, reaching USD 2.12 billion in 2030 from USD 1.20 billion in 2025.
The Canadian transport industry is responsible for commercial vehicles used for trade, coupled with passenger and public transport vehicles like buses. Transportation is a crucial mode of passenger travel and goods trade, encompassing intercity and local transportation, intra-provincial transportation activities, and trade between the USA and Canada. Public transport, such as buses and cabs, also forms a major part of road transport in Canada, used by the general public for daily travel. Additionally, travel by flight is part of transportation in Canada.
However, these transportation mediums primarily use combustion engine fuels, which can be costly and harmful to the environment. Therefore, Canada is transitioning to more efficient and eco-friendly sustainable fuel options, such as biofuels, natural gas, and others, actively promoting their use over traditional combustion engine fuels, thereby fueling market growth.
The transportation and sustainable fuel market in Canada is driven by the rapid growth in the adoption of EVs as a substitute for combustion engine vehicles for passenger, public transport, and commercial use, coupled with rising innovations in the field of sustainable fuel options. Canada conducts trade using commercial vehicles; however, with the availability of more efficient and eco-friendly sustainable fuel options, a growing number of EV vans and trucks are being developed and utilized for goods transportation. The development of sustainable aviation fuel and hydrogen fuel-based vehicles to reduce harmful emissions in transportation is also propelling the market.
The rapid rise in innovations for sustainable fuels is predicted to propel the market:
Sustainable fuel refers to alternative fuels that reduce emissions from transportation. For instance, natural gas, which emits only half the amount of greenhouse gas as coal in electricity generation, can achieve significant emission reductions and serves as an eco-friendly option.
Biofuels, natural gas, and hydrogen fuel are examples of these sustainable fuels that have been developed over the years, helping to reduce harmful emissions in the environment. These more cost-efficient and eco-friendly options are encouraging Canada’s transportation sectors, including air travel, commercial vehicles for trade, and public transport, to switch to sustainable fuels. The use of sustainable fuels is further anticipated to rise in conjunction with the growth of commercial vehicles for trade.
The growing popularity of EVs is anticipated to grow the market.
The major growth in the sustainable fuel market is attributed to the rapid increase in the popularity of EVs that use sustainable fuels, such as hydrogen fuel, which produce fewer harmful emissions and are more time and cost-efficient. In Canada, where most trade occurs by road, with the majority being with the USA due to shared borders, there is a strong demand for more cost-efficient and eco-friendly options for commercial vehicles.
Existing combustion fuel engines are harmful to the environment, and their fuel prices are rising rapidly. Governments are taking significant steps to improve the overall infrastructure for sustainable fuel stations to refuel EVs.
The majority of transportation in Canada is conducted using commercial vehicles for trade and public transport (e.g., buses and airplanes) for intercity or international travel. These vehicles often require refueling multiple times during long-distance journeys. However, insufficient infrastructure for these new sustainable fuels in many underdeveloped and low-density populated regions can hinder vehicle refueling during transportation.
Additionally, a lack of awareness regarding these newly developed sustainable fuels can lead people to doubt their suitability for vehicles. Therefore, these factors could negatively affect the market in the forecast period.
TotalEnergies: Natural gas, provided by TotalEnergies, is a key energy source for the energy transition. It plays a major role in electricity generation thanks to its flexibility and can meet the rapidly growing demand for the electrification uses of natural gas.
Shell Brasil: Shell V-Power Ethanol is a biofuel by Shell that acts instantly to clean and protect engine components. It helps to remove accumulated waste inside the engine that can compromise its proper functioning.
November 2025: FortisBC Energy Inc. and Loblaw Companies Ltd. launched a hydrogen-powered Class-8 grocery delivery truck pilot in British Columbia, demonstrating zero-emission freight operations and collecting real-world performance data for sustainable trucking logistics.
September 2025: Tidewater Renewables Ltd. confirmed expansion of renewable diesel production and supply contracts following support for Canada’s Biofuels Production Incentive program, positioning its HDRD complex to supply large volumes of renewable diesel to transport fuel markets.
March 2025: KAG Canada and Innovative Fuel Systems announced commercial deployment of a hydrogen dual-fuel Class-8 heavy-duty truck using the MFTP™ platform in Edmonton, enabling diesel engines to offset fuel consumption with hydrogen for lower emissions trucking operations.
| Report Metric | Details |
|---|---|
| Total Market Size in 2025 | USD 1.20 billion |
| Total Market Size in 2030 | USD 2.12 billion |
| Forecast Unit | Billion |
| Growth Rate | 12.1% |
| Study Period | 2020 to 2030 |
| Historical Data | 2020 to 2023 |
| Base Year | 2024 |
| Forecast Period | 2025 – 2030 |
| Segmentation | Fuel Used, Province |
| Geographical Segmentation | Ontario, Quebec, British Columbia, Alberta, Others |
| Companies |
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