Clean fuel standard may boost canola demand

If Ottawa expands the biofuel mandate, it could mean an extra three million tonnes of sales, says canola group official

Farm and biofuel groups are happy to hear that the federal government is developing a clean fuel standard.

Environment and Climate Change Minister Catherine 
McKenna recently announced that Ottawa will be holding consultations next year on developing a standard that will reduce annual greenhouse gas emissions by 30 megatonnes by 2030.

That is the equivalent of removing seven million vehicles from the roads for a year.

“Designed well, it will stimulate Canadian production of renewable biofuels from the agriculture sector and use lower carbon fossil fuels such as natural gas,” McKenna said in a Nov. 25 speech to the Toronto Region Board of Trade.

The government said it will release a discussion paper in February to help guide consultations with the provinces, territories, indigenous peoples, industry and non-government organizations.

The clean fuel standard would promote the use of lower carbon fuels and alternatives such as electricity, biogas and hydrogen. It would apply to fuels used in transportation, homes and industry.

Cheryl Mayer, director of policy development with the Canadian Canola Growers Association, was excited to hear the government is heading in that direction.

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“We see that as a positive development,” she told delegates attending the Canola Industry Meeting in Saskatoon.

She was encouraged that McKenna talked about British Columbia’s low-carbon fuel standard in her announcement. That regulation requires fuel suppliers to decrease the average carbon intensity of their fuels to achieve a 10 percent reduction relative to 2010.

“Canola fits in that very well, so it’s good for canola biodiesel,” Mayer said in an interview after her presentation. “It’s something we’ve been asking for. It’s good news.”

Andrea Kent, president of Renewable Industries Canada, said it will be important to ensure that biofuel mandates are part of the clean fuel standard. Canada already has a renewable fuel standard that mandates five percent renewable content in gasoline and two percent in diesel. Renewable Industries Canada wants those mandates expanded to 10 and five percent, respectively, by 2020.

Mayer said a carbon intensity standard would give Canadian canola biodiesel a leg up on alternatives such as imported palm oil biodiesel. She said 1.85 million tonnes of canola were used for Canadian biodiesel production last year, and thinks another three million tonnes would be required annually if the federal mandate was expanded to five percent.

To put that in perspective, the extra three million tonnes would be more canola than Canada shipped to Japan or to Mexico in 2015-16.

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