The same month that a national five percent ethanol mandate came into effect, the Canadian Renewable Fuels Association published a report card calling on Ottawa to double it.
A 10 percent ethanol and five percent biodiesel federal mandate are part of the association’s long-term vision for the industry.
CRFA president Gordon Quaiattini said it is too early to put a target date on implementing the expanded mandates, considering the existing commitment for a two percent biodiesel mandate has yet to be implemented.
But he said it’s a safe bet to assume the industry will be pushing for a shorter time frame than the 15 years it took to get the ethanol mandate in place on Dec. 15, 2010.
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Expanding the mandates is an easier task than creating them from scratch because the policy and regulatory framework are already in place in Ottawa.
“We don’t have to go back and reinvent that wheel of market access,” said Quaiattini.
However, before the CRFA starts pushing in earnest for new mandates, it wants to have discussions with the government about creating the proper investment environment to meet them.
“We could ask for the mandates to be expanded tomorrow, but if that is simply going to be met by imported renewable fuels, then Canada misses out on all the value-added economic development and job expansion,” he said.
The discussion on investment incentives is going to have to wait for a while because it will largely depend on what happens with biofuel policy in the United States.
U.S. policymakers recently approved a one year extension of the 45 cent per gallon tax credit for ethanol and $1 per gallon credit for biodiesel. What happens after 2011 is anybody’s guess.
The Commodity Research Bureau said the industry is unlikely to get another extension when the credits expire on Dec. 31, 2011.
Growth Energy, one of the main ethanol lobby groups in the U.S., is calling for the phasing out of the tax credits in favour of government support on improving renewable fuel infrastructure.
Quaiattini said Canadian ethanol policy and prices are heavily influenced by what goes on south of the border, so it is important to see how things play out there.
“If the tax credit programs expire after 2011, it’s a very different world,” he said.
One of the main priorities for the association will be to ensure that part of the ethanol and biodiesel mandates will be available for second generation biofuel such as cellulosic ethanol.
“We want to see the commercialization of this next generation technology happening here,” said Quaiattini.
The association will also be pushing for better policy alignment between provincial and federal governments instead of today’s hodgepodge of mandates and policies.
Quaiattini thinks governments will be receptive to the request to expand provincial and national mandates because the industry has a good story to tell.
“We’ve been able to demonstrate in the report card that by doing what you’ve done with us to date, there has been a very positive return to Canadian taxpayers,” he said.
“You gave us an ecoEnergy program and we’ve responded with $3 billion in direct investment and we’re adding about $2 billion per year to the Canadian economy. That’s a great track record.”
