Canada has less than two years to more than double its ethanol capacity and less than four to increase its biodiesel output by 400 percent.
“We’re very optimistic those targets will be achieved,” said Gordon Quaiattini, president of the Canadian Renewable Fuels Association.
Last week, the House of Commons passed a bill paving the way for a mandate requiring five percent ethanol be blended into transportation fuels in Canada by 2010 and two percent biodiesel content by 2012.
Canada has 11 plants producing about one billion litres of ethanol and three biodiesel plants with about 100 million litres of output. The mandates call for 2.5 billion litres of ethanol and 500 million litres of biodiesel.
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Quaiattini said most of those mandates will be met by Canadian production with some fuel trickling in from the United States and Brazil.
Despite the challenges the industry has faced due to high grain prices driving up the cost of production and the negative publicity surrounding the food versus fuel debate, he anticipates no problems meeting the requirements.
He knows of about 700 million litres of ethanol production and 225 million litres of biodiesel production that is either in the financing or construction phase of development or close to being commissioned.
Those numbers don’t include the $400 million Riverstone Holdings ethanol-biodiesel plant planned for Innisfail, Alta., that is awaiting a permit or the $500 million cellulose ethanol plant Iogen is planning to build in Saskatchewan.
Quaiattini said the combination of the recently passed legislation and the $1.5 billion EcoEnergy for Biofuels Initiative should restore investor confidence in the industry.
“I’m hopeful that even some of the farmer equity projects in Saskatchewan that didn’t go ahead may find an opportunity to be revisited and therefore have a chance to move ahead,” he said.
Judie Dyck, president of the Saskatchewan Biofuels Development Council Inc., said the bill still has to go through the Senate, but the fact that it made it through the house demonstrates that the federal government is committed to the biofuel sector.
“It is a certain amount of peace of mind,” she said.
She too believes most of the mandate will be met through Canadian prod-
uction, including a sizable amount from Saskatchewan, despite recent setbacks in that province.
Earlier this year, Ensask Biofuels ltd., a group that intended to build a 104 million litre wheat ethanol plant in Tisdale, Sask., shelved its project citing diminished interest from local investors and the lack of a strategic partner to pick up the slack.
Dyck said Gardiner Dam Agri-Energy Ltd., a group attempting to build a 95 million litre plant in Strongfield, Sask., is also dead in the water.
Quaiattini remains confident that construction will take place in Western Canada. He noted that on the day that the Commons passed its biofuel legislation, Terra Grain Fuels, a 150 million litre ethanol plant located near Belle Plaine, Sask., opened for business.
“They are firing up the plant as we speak,” he said.
And an official construction announcement on the long-awaited Iogen project is expected this month.
