Canadian biodiesel mandate draws opposite reactions from CTA, CRFA
Mar 1, 2011 12:10 PM
The Canadian Trucking Alliance (CTA) is challenging government claims that its members stand to reduce their carbon footprint in any significant manner through a biodiesel mandate announced February 10 by Minister of the Environment Peter Kent and Minister of Agriculture Gerry Ritz.
According to CTA, there is strong evidence, including a 2009 study done by EcoRessources Consultants (ERC) for Environment Canada, that shows the environmental impact of a biodiesel mandate in terms of greenhouse gas (GHG) reduction is negligible and certainly outweighed by the costs. According to ERC, the total incremental cost to society of the proposed biodiesel regulation for on-road use would be $4.5 billion between 2011–2035, whereas the benefits, in the form of reduced GHG emissions, are valued at only a tad over $860 million. On a regional basis, western Canada would take the biggest cost hit at about $1.8 billion, followed by Ontario at $1.3 billion and Quebec at more than $450 million. The report makes clear that consumers—the trucking industry and the increasing number of people buying more fuel-efficient diesel powered light-duty vehicles—would ultimately be burdened with the incremental costs of a biodiesel mandate, both in terms of direct costs and by the flow through of the increased costs to the petroleum refining sector, with very little GHG reduction benefit.
According to CTA’s chief executive officer, David Bradley, “It’s no wonder other countries are rethinking their biodiesel policies. Furthermore, under the proposed US heavy-duty truck GHG reduction regulation, which Canada says it will harmonize with, biodiesel isn’t even mentioned as an option for meeting the new standard. If this is about the environment, then it behooves the Minister of the Environment to provide the trucking industry with emission credits for using this product.
“Today’s announcement will eventually require that all diesel fuel product sold to on-road customers over a calendar year contain an average of two per cent biofuel content,” he said. “Aside from the lack of environmental benefits, this new fuel standard could pose significant operating challenges for both light and heavy-duty users of diesel engines in winter conditions along with creating possible engine warranty issues. However, these impacts will be difficult to determine until the release of the details in the regulation.”
Conversely, the Canadian Renewable Fuels Association (CRFA) lauded the announcement of a national 2% biodiesel mandate as good news for consumers, farmers, and energy diversity in Canada.
“This is a milestone day for homegrown renewable biodiesel in Canada. Biodiesel is a better way to drive and an innovative way to fuel our economy,” said Gordon Quaiattini, CRFA president. “Biodiesel is a cleaner alternative to conventional diesel. It will help moderate price by adding to our fuel supply, create new jobs, and benefit farmers and drivers alike.”
Studies have shown that Canadian-produced biodiesel generates between 85% to 99% less greenhouse gases, depending on feedstock, compared with conventional diesel fuel.
Renewable fuels such as ethanol and biodiesel in Canada are a substantial source of economic and financial benefit to rural Canada. Construction of biofuels facilities has generated roughly $3 billion in economic activity and ongoing operations represent a $2 billion annual economic contribution.
For Canadian farmers, higher incomes that flow from the sale of surplus feedstock bring additional security and lessen reliance on income and safety net programs.
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