Canadian canola growers look with envy at the biodiesel industry in Europe and how it has spurred demand in that market for rapeseed and canola oil.
Biodiesel production is starting to take hold in Canada, but the president of the Canola Council of Canada said the industry needs a commitment from Ottawa.
There needs to be a national biodiesel mandate, a national quality standard and an incentive program encouraging the use of products like canola in the making of that fuel, said Barb Isman, during Manitoba Ag Days in Brandon.
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With those three things in place, Canada could have a biodiesel industry capable of consuming two to three million tonnes of canola annually by the year 2015.
“The world market is a tough old place,” she told producers. “It’s difficult to manage, so what do you do if you want to keep canola alive as a crop, as a cropping option? What you want is as much value-added processing as you can possibly get and that’s what biodiesel offers us.”
Isman believes there soon will be a national biodiesel mandate in Canada, noting that it was something the federal Conservatives and Liberals pledged in their election campaigns. Biodiesel would help the country meet its commitment to reduce greenhouse gas emissions under the Kyoto
Accord.
“We’re more than hopeful,” she said in a later interview. “We expect it to happen, certainly as part of their climate change commitment.”
However, she said the federal mandate would need to promote the use of biodiesel manufactured in Canada. Otherwise, the resulting demand could be filled with imports from other countries, particularly the United States.
A national quality standard would give users of biodiesel an assurance the fuel is suited for Canada’s climate. An ability of the fuel to perform in cold temperatures would be one of the things such a standard would have to address.
Meanwhile, the United States now has an incentive program supporting the establishment of ventures using virgin oils from crops like canola and soybeans for the making of biodiesel. With that program in place, there’s a greater chance that Canada could offer similar incentives without fear of retaliation from the U.S.
“History tells us that if we have the opportunity to mirror their programs, we should,” Isman said.
The Canadian canola industry, led by producers, intends to lobby for a federal incentive of 30 cents a litre for virgin oils from crops like canola used in the making of biodiesel and 15 cents a litre on recycled oil. That is equivalent to the U.S. incentives.
The industry is also lobbying for the removal of tariff and non-tariff barriers interfering with the export of canola seed and oil. Those barriers include discriminatory trade tariffs in countries such as India and China, which are major consumers of vegetable oils.
If all the trade barriers were removed, export demand for Canadian canola would increase by two million tonnes per year, Isman said. That would be a huge benefit to a country that currently is anticipating carryover stocks of 2.6 million tonnes in the current crop year.
Getting international trade rules changed can be a long and complicated process. Isman suggested part of the answer is to negotiate bilateral trade agreements with countries, while also working for change through the World Trade Organization.
