Canadians Backing Biofuels

Solid Canadian support for renewable fuels, along with new mandates and positive results from biofuels development, undergird a positive outlook at the Canadian Renewable Fuels Summit.
By Susanne Retka Schill | January 19, 2010
The Canadian renewable fuels industry enjoys exceptionally high public support. At the Canadian Renewable Fuels Summit, the Canadian Renewable Fuels Association President and CEO Gordon Quaiattini said this is because the industry delivers on its promises. "We're delivering the jobs and growth that Canadians so badly need," Quaiattini said. "We're delivering greenhouse gas (GHG) reductions that Canada requires. We're delivering for farm families looking to diversify. We're delivering for the forestry sector that sees renewable fuels as a new source of growth and vitality. And we're delivering for all those who worry about the security and abundance of clean and affordable transportation fuels." Quaiattini cited three recent reports supporting his claim in his state-of-the-industry address at the early December summit held in Vancouver, British Columbia.

Quaiattini cited a life-cycle analysis (LCA) issued a week before the summit on Canadian renewable fuel production between April 2008 and March 2009. The LCA, conducted by Ontario-based Cheminfo Services Inc., using the GHGenious model, found Canadian biodiesel reduced GHG emissions by 99 percent. Three biodiesel plants totaling 94 MMly (about 25 MMgy) of production were analyzed, which represented 85 percent of the total Canadian biodiesel capacity active during the data reporting period. The plants were primarily using waste-based feedstocks. The study also found that ethanol reduced GHG emissions by 62 percent from participating plants representing 65 percent of the country's active ethanol capacity during the data reporting period. A second study released by CRFA on the opening day of the summit analyzed the economic benefits of a 150 MMly ethanol plant in Southwestern Ontario. Farmer-owned Integrated Grain Processors Cooperative created more than 1,000 jobs and a direct investment of $276 million while under construction, and an ongoing $50 million in economic spending annually, in addition to tax benefits at the municipal, provincial and federal levels.

Such results have earned impressive support for renewable fuels, as illustrated by a third study released by CRFA at the summit. A public opinion poll conducted by Praxicus Public Strategies showed 89 percent of Canadians believe renewable fuels are part of a move toward a low-carbon economy; 84 percent recognize renewable fuels boost economic activity and employment in rural communities; 82 percent believe any plan to tackle climate change should include renewable fuels to lower GHG emissions; and 85 percent of Canadians see renewable fuels as a source of value-added production and new, high-tech employment. Support for the renewable fuels standard that mandates ethanol and biodiesel use in the next couple of years was only slightly lower at 78 percent, while 86 percent of Canadians believe the country needs a long-term plan to boost domestic production. "I've worked in politics for more than 20 years," Quaiattini added, "and any politician would die for these numbers."

Politicians Voice Support

Two government officials addressing the summit demonstrated that politicians understand Canada's public support for renewable fuels. Blair Lekstrom, British Columbia's minister of energy, mines and petroleum resources, voiced his strong support for Canadian biofuels in his welcoming remarks. "Anytime we work towards diversifying markets for our agricultural sector, it is a good thing," he said. The clean renewable fuels sector will create needed jobs, though he added he knows the challenges faced by industry. One ethanol project has been talked about since 1993 and still hasn't been built, although another canola biodiesel project is being actively considered. "We have the ability to be a renewable fuel powerhouse," Lekstrom said.

Lisa Raitt, the Canadian minister of natural resources, also expressed her support for biofuels in a videotaped presentation played at the summit. She pointed to the stakeholder roundtables her department has hosted this year as the government's $2.2 billion investment in a renewable fuels strategy is implemented. Of the 57 applicants to the ecoEnergy program, 23 agreements have been signed so far, she said, supporting existing Canadian producers and new projects in development. The Canadian renewable fuels standard takes effect in September 2010, mandating a 5 percent renewable content in gasoline, followed by a 2 percent renewable content in diesel and heating oil in 2012. In a panel discussing the political landscape in Ottawa, Scott Reid, a partner with Feschuk-Reid, referred to the government support-the mandates and $2 billion in financing-as "monster wins" with party platforms of both conservatives and liberals showing support for renewable fuels. "Your fundamental job is to remind and reinforce that [supporting renewable fuels] is good politics," he told the audience. Reid's fellow panelist, Tim Power, Summa Strategies, echoed Reid's remarks, adding that in the next election cycle "biofuels need to frame themselves in the economic discussion, rather than environmental."

Expansion Anticipated

Biodiesel producers at the Canadian Renewable Fuels Summit were looking forward to new mandates over and above existing ones, such as Manitoba's B2 mandate that took effect a month prior to the event, British Columbia's B5 standard taking effect Jan. 1, and Alberta's B2 mandate taking effect July 1. The provincial mandates ramp up demand in advance of the federal B2 to take effect in 2012. In anticipation of increased demand, organizers of a proposed 50 MMly biodiesel plant near Chin, Alberta, were at the conference courting interest in the canola biodiesel project. Vancouver-based biodiesel marketer, Canadian Bioenergy Corp., is also considering a large canola biodiesel project, with a feasibility study nearing completion on a 256 MMly plant to be built as a joint venture alongside Archer Daniels Midland Co.'s canola crushing facility in Lloydminster, Alberta. "Canola is Canada's number one crop now," said Doug Hooper, CEO of Canadian Bioenergy. "We have a production surplus here, and the canola crush will double to 8 million tons in the next two years." There is a big difference between the biodiesel situation in Canada and the U.S., he added. "Our market is not in an overcapacity situation." Hooper pointed out the mandated volume coming into effect in the next couple of years will amount to 700 MMly, with the current Canadian biodiesel capacity at 120 MMly. Currently, Canadian biodiesel is mostly made from rendered materials. "We need oilseeds to kick in," said Todd Moser, vice president alternative fuels at Rothsay Biodiesel. "The first layer of biodiesel production was met with lower cost feedstocks, we're going to push that up to the next level with traditional oilseeds," Moser said. Rothsay Biodiesel, a division of Maple Leaf Foods Inc., operates a 35 MMly plant at Ville Ste. Catherine, Quebec, producing biodiesel from rendered fats. Canada's producers are expecting the mandates to help biodiesel penetrate the country's diesel market. "We have a very concentrated industry with a small handful of petroleum majors," Hooper explained. "They're very efficient, covering very long distances with few players." Getting policy tools and programs to build infrastructure has been critical for the industry, he added. "You can't break into monopolistic markets."

Perspectives on the Decade Ahead

Hooper, the incoming CRFA chair, highlighted important points made during the summit in his closing remarks that also reflected on the state of the Canadian industry at the close of a decade. "This has been the coming of age decade for biofuels with capacity being built," he said. "We got the attention of government and held on to it." In the next 10 years, the energy sector will be transformed with emerging carbon policies presenting opportunities and challenges that will introduce new trade disputes regarding different views on proper carbon accounting, he suggested. "Green protectionism is going to be normal." It is notable that the best organized groups at the recent climate talks in Copenhagen were the nongovernmental organizations, he added, saying Canadian renewable fuel producers need to open dialogues with NGOs. "We need to earn and gain their trust and support."

Avrim Lazar, CEO of the Forest Products Association of Canada, also contrasted the past decade's experience with emerging policies, describing a progression in climate change policy development. The first generation of climate change responses involved finger pointing, platitudes and good will gestures that were then followed by a second generation, he said. "Kyoto was second generation because it was done in slices," he said. "Cap-and-trade offsets are a second-generation response because it's like paying someone else to diet." The third generation response is beginning to emerge now, and ultimately will require "a deep retooling of the economy, the changing of the fuel source," he said. The third generation will be holistic, doing total carbon accounting, and incorporating nature's cycles. "If any industry is well situated [for the third generation of climate change policy developments], it is this industry," he told the audience during the closing session of the summit.

Susanne Retka Schill is assistant editor of Biodiesel Magazine. Reach her at (701) 738-4922 or [email protected].
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