The promise of tax breaks and other money from government became the catalyst for at least one new biodiesel project in Manitoba.
A Manitoba community last week revealed plans to build a biodiesel plant that it expects will eventually produce 11 million litres per year of the environmentally friendly fuel. That announcement came only a week after the provincial government pledged political and financial support for those kinds of developments.
“We’ve been working on this for over a year already, but we’ve been hoping there would be something to give us a little bit of a hand,” said Teri Nicholson, economic development officer at Shoal Lake, where the biodiesel plant will be built.
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The plan is to have a facility running by next fall. Production would start at four million litres but would rise to 11 million a year within 20 months.
Tax breaks for investors and grants of up to $250,000 per project for capital costs were two pledges by government to help start biodiesel development. The grant money would come from the federal government but would be administered by the province.
The Manitoba government also is eliminating its 11.5 cents per litre fuel tax on 100 percent pure biodiesel. That gives biodiesel a price advantage over regular diesel, which continues to have the tax.
At a production of four million litres per year, the plant at Shoal Lake could potentially use 500,000 bushels of canola, said Nicholson, citing estimates from another biodiesel manufacturer already established in the province. The aim is to use No. 1 and 2 grade canola for 70 percent of the feedstock, with the balance coming from waste vegetable oils and offgrade canola.
The Shoal Lake venture is expected to create a new local market for canola while also giving producers a chance to invest in a value-added enterprise.
“If canola prices aren’t very good, you would be making a higher profit in your plant,” said Nicholson. “If the prices are higher, then you make more of a profit off of your canola and maybe less from the plant.
“You can win both ways and also at the same time be producing our own fuel instead of having to import it all and pay the wonderful prices we’ve been paying this summer.”
Producers, municipalities and trucking companies in the Shoal Lake area are potential markets for the biodiesel to be produced there.
A biodiesel venture was appealing to the Shoal Lake area because it does not involve a huge investment for capital costs. The community also has demonstrated its commitment to the environment through its recycling endeavours.
“We’ve won national awards for our recycling so it was a good fit with the community,” Nicholson said.
