It’s panic time for Canada’s biodiesel hopes, proponents say.
James Richardson International’s consideration of North Dakota for its huge new canola crushing plant has alarmed provincial agriculture ministers, industry leaders and farmers. Unless Canada quickly implements standards and regulations that promote biodiesel as aggressively as U.S. supports, that opportunity could vanish.
“If we don’t have the alignment of those incentives, it’s going to cost us because we’re going to lose the value-added, the crushing, the jobs, the biodiesel production, blending,” said Canadian Canola Growers Association president Brian Tischler.
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“All of that will be in the States.”
JRI is planning to build an 840,000-tonne-per-year canola crusher somewhere in Saskatchewan, Manitoba or North Dakota.
While the company is only looking at one North Dakota location, company officials highlighted more supportive biodiesel subsidies as attractions to that state.
Canola growers, the rest of the canola industry and provincial agriculture and energy ministers have been pleading with Ottawa to soon unveil a biodiesel strategy that will encourage investors to build plants here.
If they don’t build here, many worry, the U.S. will produce all the biodiesel that North America needs and leave no room for Canadian production.
“The American states do have a leg up on Canada today,” said Clay Serby, Saskatchewan deputy premier and minister responsible for renewable fuels.
“We need to have a made-in-Canada incentive package, and that package has to come from the federal government … In order for us to be competitive in Canada, we need to have it in place. It’s incumbent, in my view, on the national government to put us in a place where we can be competitive because for sure companies can make choices that will be most economic for them to go south of the border if that’s where the benefits are.”
Many in the canola industry were shaken by the news last year that Archer Daniels Midland was expanding a canola crushing plant and building a biodiesel plant in Velva, N.D.
That’s just south of the border and will probably rely on imported Canadian canola for its feedstock.
This JRI plant is not aimed at the biodiesel market. It will mainly produce canola oil for the food market and canola meal for the livestock industry.
But company officials last week said the biodiesel market was a valuable secondary market for the oil.
Tischler said Canadian canola growers need more crushing capacity on the Prairies and will lose the biodiesel industry if crushers like this one go south.
“People always think of biodiesel, but the crushing has to come first,” said Tischler. “If the crushing is down in the States, that’s where the biodiesel is going to be made, regardless of incentives here in Canada.”
This month the Canola Council of Canada is holding a conference in Calgary to talk about the opportunities and needs of a hoped-for biodiesel industry. Canola growers are circulating a petition calling for government action to support biodiesel production.
Federal agriculture minister Chuck Strahl has said his government plans to set a biofuel strategy before the end of the calendar year.