The government of Alberta has put some meat on the bones of the $239 million Bio-Energy Plan it announced in 2006.
The centrepiece of the plan will be the four year, $209 million producer credit program.
“This program will encourage increased investment and help create new jobs for Albertans that will promote a sustainable and stable bioenergy industry,” said Mel Knight, minister of energy for the province.
Every litre of ethanol and biodiesel or kilowatt hour of biogenerated power produced in Alberta will be eligible for the credits.
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Facilities producing more than 150 million litres of biofuel will receive nine cents per litre. Facilities below that threshold will receive 14 cents per litre.
Credit for biomass generated electricity will be two cents per kilowatt hour for producers of more than three megawatts and six cents per kilowatt hour for smaller facilities.
Credits will be available for bioenergy produced in Alberta between April 1, 2007 and March 31, 2011.
Doug MacKenzie, president and chief executive officer of Permolex Ltd., Alberta’s only operating biofuel facility, said the credits make Alberta competitive with other biofuel-producing provinces.
“Overall, in concept, it’s a step in the right direction. But I would like to see the details because working with government, sometimes the end result is different than the discussion,” he said.
But he noted that Alberta is still missing one critical piece in its biofuel policy that makes it a less desirable jurisdiction to build an ethanol or biodiesel plant.
“There really won’t be any blending in Alberta unless there is a mandate,” said MacKenzie.
Without local buyers for their fuel, Alberta ethanol and biodiesel plants will be at a competitive disadvantage to plants in Saskatchewan, Manitoba and Ontario, where provincial mandates have paved the way for a biofuel blending industry.
“I hate to have to haul this stuff all the way to Seattle and Vancouver when we could sell it in Edmonton and Calgary,” said MacKenzie.
Permolex is planning to expand its 40 million litre plant in Red Deer, Alta., into a facility that pumps out 120 million litres per year. It is also scouting the province for a site to build a second plant. MacKenzie would like to see the province round out its biofuel policy before the new construction begins.
“The U.S. has a mandate, the (European Union) has a mandate. Everywhere there’s a mandate, except Alberta,” he said.
However, he is pleased with the new production credits and the caps that accompany them, which ensure the program will benefit a variety of projects.
Plants producing 150 million litres or more can receive a maximum of $20 million per year and a total of $75 million over the four year life of the program. Facilities producing less than 150 million litres will be capped at $15 million per year.
In addition to the production credit program, the province is spending $6 million on grants to offset the start-up costs of building bioenergy facilities and $24 million on a program that will provide grants for product development, market research and feasibility studies.