VANCOUVER – A group of farmers from Lethbridge plans to contribute to Canada’s growing canola crush capacity.
BFuel Canada Corp. intends to build a $43 million crushing plant and biodiesel facility next March. The crush portion of the project is expected to be operational by February or March of 2011.
The farmer-owned business has secured 21 acres 20 kilometres east of Lethbridge that is serviced by a Canadian Pacific Railway main line.
The facility will be able to process 114,000 tonnes of local canola a year, which it will use to produce 50 million litres of European standard biodiesel.
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BFuel hopes to raise the $43 million through private investment, federal and provincial government funding and debt financing.
It has already received $3.7 million in grants from Alberta Energy and is eligible for $7.5 million in federal ecoAgriculture Biofuels Capital Initiative program funding contingent on receiving adequate producer investment.
One market analyst believes investing in canola biodiesel projects is folly.
“Making biodiesel from canola oil is just not very smart. It just really doesn’t make a lot of money,” Informa Economics Inc. vice-president Dave Reimann recently told an audience at the Balancing the Bottom Line conference in Saskatoon.
His firm conducted an assessment of biodiesel production, which determined that animal fat and used restaurant grease are the most economical feedstocks for biodiesel production. Canola oil is the worst.
“Canola oil has too much value as food oil. The trans fat issue has done way more to support you folks than biodiesel has,” Reimann said.
BFuel president Glenn Collick said the proposed Lethbridge plant will produce a valuable byproduct that overcomes the disadvantage of using a high-priced feedstock.
“Adding value from the front to the back is essential,” he said during a break at the recent Canadian Renewable Fuels Summit in Vancouver.
Biodiesel plants produce crude glycerine, a byproduct that has become so plentiful plants have to pay landfills to take it off their hands.
“Until the industry comes up with a use for crude glycerine, there’re going to be problems,” Collick said.
The BFuel plant will refine the product into pharmaceutical grade glycerine that can be used in consumer products such as gels, cosmetics, toothpaste and icing sugar. It sells for about $550 US per tonne.
The plant will produce about 10,000 tonnes of refined glycerine annually.
It will also produce 70,000 tonnes of high value canola meal. The facility will not use the hexane extraction method employed by larger crushers, which means it won’t be able to squeeze as much oil from the seed, resulting in higher oil content in the meal.
Collick said more than 200 area canola producers have expressed interest in investing in the project, supplying it with feedstock or buying biodiesel from the plant.
The group plans to hold its first annual general meeting Dec. 21 in Lethbridge.
