All diesel fuel and home heating oil will have to contain at least two per cent biofuels starting in July 1 this year.

Federal Environment Minister Peter Kent made the announcement Thursday in Hamilton along with federal Agriculture Minister Gerry Ritz.

The minister said the regulations will cut green house gas emissions from transportation and heating fuel. Biofuel regulations for gasoline have already kicked in. Starting in December 2010, all gasoline was required to contain five per cent biofuels.

Kent told a small audience at the BIOX biodiesel plant in Hamilton that adding biofuels to diesel, home heating fuel, and gasoline will reduce emissions equivalent to taking a million cars off the road every year.

"We as Canadians are determined to do our share in the fight against climate change. We take our responsibility to do what we can do very seriously."

The use of biofuels is controversial because the fuel contains ethanol. It's considered to be clean burning fuel. Critics say the benefits of ethanol are overestimated because it doesn't take into account the emissions associated with fertilizing and harvesting of corn to produce it.

The executive director of the Sierra Club, John Bennett, called Thursday's announcement "window dressing" that will help farmers more than the environment.

"This could be a small part of an overall climate change plan," he said, "but without targets to cut emissions from industrial emitters, it's not much."

Liberal environment critic Gerard Kennedy says today's news is "extremely modest."

"This just doesn't deliver the greenhouse gas kick."

The federal government has to yet to announce any rules to cut to emissions from the country's largest polluters — big industries like manufacturing and oil and gas production that account for almost half of Canada's greenhouse gas emissions.

Margo McDiarmid is the reporter for CBC's environment unit. You can reach her at margo.mcdiarmid@cbc.ca.