Alta. devours biodiesel pie

Reading Time: 3 minutes

Published: February 1, 2007

Canada’s proposed biodiesel mandate is full – if three proposed plants for Alberta come on-line.

With last week’s announcement of another large-scale biodiesel project to be built in Alberta, plans are now in place to build more capacity than could be handled by the two percent mandate proposed by the Conservative government on Dec. 20.

BioStreet of Kelowna, B.C., intends to start construction on a 175 million litre crusher and refinery somewhere in northern Alberta in 2007.

“It will be the first commercially viable biodiesel project in Western Canada that we’re aware of,” said BioStreet chair Darrell Michaels.

Read Also

An aerial image of the DP World canola oil transloading facility taken at night, with three large storage tanks all lit up in the foreground.

Canola oil transloading facility opens

DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.

The company joins a list of at least two other previously announced large-scale projects.

Riverstone Holdings, the Carlyle Group and Dominion Energy plan to build the mother of all Canadian biodiesel plants, a 378 million litre behemoth in conjunction with similar-sized oil crushing and ethanol facilities at an undisclosed Alberta location.

The biodiesel portion of the mega-project will proceed some time after mid-2008 when the ethanol plant is up and running.

Canadian Bioenergy Corporation has announced its intention to build a 114 million litre plant along side the existing Bunge Canada crushing and refining operation near Fort Saskatchewan, Alta., some time in 2008.

If all three of those projects come to pass they will be producing 667 million litres of canola-based biodiesel alternative within the next few years. And new projects are being announced monthly.

Analysts expect Canadians to consume about 30 billion litres of on-road diesel by 2012, when the federal mandate kicks in.

A two percent share of that market amounts to 600 million litres of biodiesel.

So if three Alberta companies are capable of filling Canada’s entire mandate, what does that mean for projects in other jurisdictions like Saskatchewan, home to 48 percent of last year’s canola crop?

“We’re working as hard as we can to make sure there is an industry here,” said Judie Dyck, executive director of the Saskatchewan Canola Growers Association.

But she said the current policy environment isn’t conducive to building biodiesel plants anywhere in the country.

“There’s just a lot of unknowns right now,” said Dyck.

Doug Hooper, chief executive officer of Canadian Bioenergy Corporation, agrees with that assessment. The biggest missing piece is the federal tax incentive package.

He hopes to hear the Conservatives announce a 30 to 35 cents per litre tax credit in the upcoming federal budget so that proposed projects can get underway.

“The capital is there. The industrial will and capacity is there. What we’re going to need for these to actually get built is appropriate policy to make us competitive with the states.”

Hooper was disappointed with Ottawa’s two percent, 2012 renewable content mandate for diesel fuels. The industry had been calling for a 2010 implementation date.

“I think the likely outcome of delaying the implementation of the mandate is we’ll delay the building of the plants,” he said.

Hooper applauded the Alberta government for getting ahead of the curve by announcing a nine to 14 cents per litre production tax credit for plants producing biodiesel in the province between April 2007 and March 2011.

That progressive policy measure combined with Alberta’s petroleum infrastructure to support the blending and distribution of biodiesel is why all three of the major plants that have been announced are building in that province.

But Hooper said the volume that will be produced by those three plants doesn’t necessarily rule out future Saskatchewan or Manitoba based projects.

The mandate only sets a floor for biodiesel sales. Additional markets may well exist in Canada, the northern United States and Europe. And there is no guarantee that all of the proposals being bandied about will come to fruition.

“There is typically a lot more enthusiasm that there are finished plants at the end of the day. We won’t all build, is my expectation,” said Hooper.

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

explore

Stories from our other publications