WINNIPEG (Reuters) – Canadian biofuel production is expected to rise 76 percent in two years as government subsidies for production plants and renewable fuel requirements take
effect.
Gordon Quaiattini, president of the Canadian Renewable Fuels Association, said total biofuel production will reach 2.5 billion litres annually by 2011, including two billion litres of ethanol and 500 million litres of biodiesel.
“We’re certainly on track to build that production capacity, no question,” Quaiattini said.
Canada produces 1.3 billion litres of ethanol a year and 120 million litres of biodiesel.
Read Also
Europe holds promise for Canadian lentils
Pulse Canada is trying to help boost lentil consumption in Europe, which is already the fourth largest market.
The federal government gives annual operating subsidies of $70 million Cdn to Husky Energy’s ethanol plant in Lloydminster and $5.4 million to Methes Energies Inc.’s biodiesel plant in Mississauga, Ont.
The funding is for seven years, with the exact amount calculated on a per litre basis. It is designed to pay more in a weak market than when conditions are favourable.
Ottawa has now awarded funding to 23 biofuel plants under its program, distributing $1.5 billion over nine years since 2008. Other recipients include Suncor Energy and Maple Leaf Foods’ Rothsay Biodiesel.
The government considers biofuel attractive because it reduces greenhouse gas emissions.
Canadian plants make ethanol from corn and wheat, and biodiesel from animal fat, soybeans and canola.
Ottawa’s subsidies come as California, the U.S. state with the most cars, drafts a low-carbon fuel standard in April that sets the bar higher for cleaner development of corn ethanol.
Quaiattini said U.S. authorities have not applied the California formula, pending further review.
Canada will require five percent renewable fuel content in gasoline by 2010 and two percent renewable content in diesel and heating oil by 2011. Manitoba, Alberta and British Columbia have all drafted biofuel mandates to take effect between November and early next year.
