Up To the Challenge

Canada may lag behind the United States and Europe in biodiesel production and use, but well-organized municipal fleet groups-and companies with a stake in production and distribution-in British Columbia are helping to get the nation up to speed quickly.
By Raymond McAllister | February 01, 2006
For years, Canadians have spoken proudly about doing more to combat global warming than their American neighbors. As it turns out, that rhetoric may be little more than hot air, some experts say. Statistics show Canadians actually produce more greenhouse gases per capita than any other country except Australia. And when it comes to renewable, eco-friendly fuels such as biodiesel, Canadian production has lagged far behind the United States and Europe.

With no government-provincial or federal-subsidizing or mandating the use of biodiesel in Canada, the country produced just 1.3 MMgy (5 MMly) in 2004, compared to nearly 30 MMgy (114 MMly) in the United States and approximately 530 MMgy (2 billion litres) in Europe. In fact, Canada has historically imported most of its biodiesel from the United States.

That's starting to change. Canada has committed $2 billion to implement a Climate Change Action Plan. Under this plan, renewable fuels like biodiesel will play an important role in reducing greenhouse gases. Large-scale plants are now producing biodiesel in both Quebec and Ontario, and biodiesel use is starting to take off in several areas of the country.

Municipal and transit fleets in Toronto and five other large southern Ontario communities are now using 1.8 million gallons (7 million liters) of biodiesel per year, and demand is expected to increase to 5.6 million gallons (21 million litres) by next year. Add to that demand the growing usage requirements of both corporate and government fleets, and the volumes start to make a biodiesel industry viable in Canada.

British Columbia jumped on the biodiesel bandwagon just 18 months ago. Under the auspices of Fleet Challenge B.C., key players worked together to develop the B.C. BioFleet Project-a unique, collaborative program to jumpstart biodiesel market development in greater Vancouver and throughout the province.

Remarkably, over the past year, British Columbia went from having almost zero users to over 1,000 vehicles using biodiesel in over 40 fleets.

Boosting biodiesel up there

So, what's driving biodiesel north of the border?

According to Christine Paquette, former executive director of the Biodiesel Association of Canada (which recently merged with the Canadian Renewable Fuels Association) and now Canadian sales director for World Energy Alternatives, environmental concerns about greenhouse gases and their impact on global warming are the main drivers for biodiesel in Canada. "From a Canadian perspective, it's easy to see why biodiesel has taken the United States by storm-and also why Canada has lagged behind," Paquette says.

Industry experts say that since the United States imports much of its oil and gas, Americans are concerned about energy security and their reliance on foreign oil. American farmers are also looking for ways to augment their income in an era of sagging prices and rising costs. They have used their collective clout to ensure that energy legislation has favored home-grown alternative fuels like biodiesel. "Those concerns aren't significant factors here," Paquette says. "North of the border, no one talks about energy security. Canada has huge oil and gas reserves. Canada is not only America's largest trading partner, but also its largest energy supplier by far. Even greater than Saudi Arabia, Mexico or Venezuela."

Paquette continues, "In Canada, municipal governments, transit authorities and private companies are driving an emerging biodiesel industry as a way to reduce greenhouse gases and improve local air quality and health."

As part of its commitment to the Kyoto Accord, Canada is using a wide range of programs to reduce greenhouse gases, including energy conservation, carbon credits trading, the promotion of fuel-efficient vehicles and the use of renewable fuels. It has also set a target of producing 132 MMgy (500 MMly) of biodiesel by 2010.

"British Columbia arrived late to the biodiesel party," says Joe Valeriote, vice president of business development at 4 Refuel Canada Ltd. (formerly Minitankers), a major Canadian distributor of biodiesel. "But after just 18 months, [British Columbia] has chalked up an impressive list of accomplishments."

After extensive pilot testing, biodiesel is now being used by many British Columbia municipalities with a combined population of over 3 million people. Almost 40 corporate, provincial and federal government fleets are also using biodiesel blends.
Agri-Green Biodiesel Ltd. has just opened the first small biodiesel plant in eastern British Columbia, and two other companies have announced plans for larger plants. At the first biodiesel truck stop cardlock and other retail pumps, business is growing steadily.

Revving up a provincial biodiesel program

How did British Columbia ramp up its biodiesel program so quickly?

First off the mark was the B.C. Municipal Fleet Managers Group (BCMFMG) that decided to take action to collectively reduce emissions of their member fleets. In 2003, the group was introduced to biodiesel as a practical way to reduce emissions from heavy-duty vehicles. They decided to "kick the tires" with a biodiesel pilot program.

Six large municipalities-Vancouver, North Vancouver, Richmond, Burnaby, Delta and the resort community of Whistler-signed on.

"The original six were very strategic," says Curtis Rhodes, fleet manager for the city of Delta and chair of the BCMFMG. "First we had to prove that biodiesel worked in our fleets, and we needed experience and accurate data to confirm this. We also wanted assurances that reliable supplies of ASTM quality biodiesel would be available. And we required a high volume to benefit from economies of scale."

When emissions test results from the pilot program confirmed U.S. EPA test data, the group included biodiesel in its next fuel-buying contract. The government of British Columbia also agreed to exempt the provincial fuel tax on the biodiesel portion of B5 to B50 blends. At about the same time, Fleet Challenge B.C. was established as the provincial arm of Fleet Challenge Canada. The national federally funded program works with partners to achieve reductions of both greenhouse gas and tailpipe emissions from fleets across Canada. Biodiesel was of great interest to many of the fleets working with the program.

Dennis Rogoza, director of Fleet Challenge B.C., says the need for a collaborative strategy on biodeisel quickly became obvious. "Users, producers, distributors and three levels of government all recognized that without a market for biodiesel, producers would not build plants," Rogoza says. "And without a reliable supply, fleet managers and individuals who use diesel would not make the switch to biodiesel. We had to work together to make things happen."

Jumpstarting the market

In October 2004, Fleet Challenge B.C. convened a meeting of government, corporate and other stakeholders who were interested in purchasing, using, producing and distributing biodiesel in British Columbia. Everyone wanted to do things right and avoid some of the pitfalls other jurisdictions experienced. To jumpstart greater market demand, the group prepared a unique biodiesel market development strategy that included workshops, case studies, demonstration projects and public awareness activities.

Building on the success of the initial pilot program, the B.C. BioFleet Project-Canada's largest biodiesel demonstration project-was launched at the first biodiesel workshop in Vancouver in March. The strong level of public interest surrounding the use of biodiesel was evident by the numerous federal and provincial government ministers and mayors who participated.

The six municipalities agreed to purchase up to 21 million gallons (80 million liters) of biodiesel blends for use in their fleets over the next five years. This purchase was made by the B.C. Petroleum Buyers Group, a unique organization that oversees a collective fuel-buying program to reduce energy costs for member municipalities and school boards. The agreement ensured sufficient volume to begin bringing biodiesel in bulk to municipal terminals.

The B.C. BioFleet Project then developed a number of tools to build the biodiesel market and raise industry awareness. The B.C. BioFleet Web site (www.bcbiofleet.ca) soon became one of the premier biodiesel Web sites in Canada (with a growing American audience). A unique Biodiesel Emission Reduction Calculator enabled fleet managers to easily calculate emissions reductions. The 1st User Incentive Program attracted 30 new corporate and government fleets to the program, and a series of educational biodiesel videos is being produced to answer issues about biodiesel use.

One measure of B.C. BioFleet's success is the number of companies that have stepped up to the plate. Canadian Bioenergy, West Coast Biodiesel, 4 Refuel and others are now distributing biodiesel to municipalities, school boards and corporate fleets.

In July, United Petroleum Products Inc. opened Western Canada's first cardlock truck stop, selling biodiesel to commercial truckers.

First to "fill 'er up" with biodiesel was West Coast Biodiesel Ltd., whose 40 vehicles are the largest commercial fleet in British Columbia to make the switch to a biodiesel blend.

"When it comes to biodiesel, we don't just talk the talk," says Ridley Bestwick, chief information officer of West Coast Biodiesel Ltd., a division of West Coast Reduction Ltd. "We walked the walk by switching our fleet of on-road trucks to B5, while vehicles at our plant use a B40 or B50 blend. Many of our customers are now using biodiesel, and we're charging forward with plans to build a 7 MMly to 10 MMly (2.6 MMgy) plant. As the market for biodiesel increases, we hope to build a much larger plant in the near future."

Where rubber meets the road

British Columbia and Canada still have a long way to travel on the road to viable and sustainable biodiesel industries. First, more customers are needed to increase biodiesel volumes. Feedstock supplies must be identified and secured. Capital must be raised. Canadian oil companies must come onboard, particularly in blending and distributing biodiesel. Distributors must ensure that only biodiesel that meets ASTM specs will be distributed. "Most importantly, Canada needs a level playing field in order to compete with U.S. biodiesel producers," says Ian Thomson, CEO of Canadian Bioenergy Corp. "For the biodiesel industry to prosper in [British Columbia] and Canada, we need a mandate for B2 to B5 in all diesel-powered vehicles, a blender's or producer's credit similar to that in the [United States], and continuation of the relief of provincial and federal fuel taxes on the biodiesel portion of fuel blends."

It appears that a renewable fuels mandate is in Canada's future. Leading politicians in Canada have indicated broad support for a strong and effective national policy on renewable fuels. British Columbia and Canada may have been slow out of the gate, but biodiesel has taken off "up north" and the future looks bright.

For more information on the BC BioFleet Program, see www.bcbiofleet.ca.
For more information on 4Refuel's biodiesel delivery services, visit www.4Refuel.com.

Raymond McAllister is a British Columbia-based freelance writer. He authored this article on behalf of B.C. BioFleet and Fleet Challenge B.C. This is McAllister's first Biodiesel Magazine story.
 
 
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