Alberta’s biofuel industry is thrilled with the province’s April 1 implementation of a five percent ethanol and two percent biodiesel mandate.
The mandates will create an annual market for 250 to 300 million litres of ethanol and 110 million litres of biodiesel.
“This is very encouraging,” said Mike Kotelko, general manager of the proposed Growing Power Hairy Hill integrated biorefinery planned for the small community located 130 kilometres east of Edmonton.
“Between Alberta and (British Columbia) the (ethanol) production deficit is over 500 million litres annually. Alberta has a great opportunity to significantly fill that gap.”
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The province also announced a five-year extension to the Bioenergy Producer Credit Program that expired on March 31. It has budgeted $336 million for the first three years of the extended program.
“Extension of the Bioenergy Producer Credit Program in combination with the renewable fuels standard positions Alberta as a leader in renewable and alternative energy,” said Ron Liepert, the province’s minister of energy.
Ian Thomson, president of Canadian BioEnergy Corp., a company that plans to build a 265 million litre canola biodiesel plant in conjunction with Archer Daniels Midland adjacent to ADM’s existing crush plant in Lloydminster, Alta., said the producer credit is a critical piece of their project.
He is attending a meeting on April 12 where details of the program will be released. He wants to know what kind of caps will be placed on the program.
“We’ll look at those final details in addition to whatever may be on the table in Ottawa. That’s going to be what we’ll make our final call on,” said Thomson.
Canadian BioEnergy Corp. received nearly $10 million through the old program for capital expenditures and market development work. Money in the new program will be for a per litre credit applied retroactively to product sold.
Thomson said there is no commercial- scale production of biodiesel in Alberta.
“My hope is that by the end of this year you could see as much as 85 million litres of production,” he said.
Kotelko said there is 40 million litres of ethanol production in the province. Construction on the Hairy Hill plant will begin as soon as the ground thaws.
His company is finalizing financing agreements on its $120 million integrated biorefinery located adjacent to the 36,000 head Highland Feeders Ltd. feedlot.
The 40 million litre wheat ethanol plant will produce wet distillers grain for the nearby feedlot and is already using manure from the feedlot in its recently constructed biogas plant.
“I think Alberta has an opportunity to be a leader in integrated plants that can provide more efficient and lower carbon footprint biofuels,” he said.
He anticipates it will be three or four years before Alberta is able to fill its ethanol mandate with locally produced fuel.
“There are trainloads of ethanol being imported into the Prairies. That ties up our rail resources for exporting our products,” said Kotelko.
The mandates will create a new local market for wheat and canola and help cattle feeders lower their costs by decreasing their reliance on imported distillers grain.
He said the producer credit will provide the investment community with the reassurance it needs to fund more biofuel capacity in Alberta. Growing Power has options to build out an additional 230 million litres of ethanol capacity in the province.
