Construction of a northern Alberta biodiesel plant, expected to use the seed from more than 300,000 acres of canola, was announced June 28.
Canadian Bioenergy Corp. signed a purchase agreement to buy 12.5 acres of land in Sturgeon County next to Bunge Canada’s oilseed crushing and refining operation near Fort Saskatchewan.
“It’s in the heart of a great canola producing region,” said Doug Hooper, chief executive officer of Canadian Bioenergy Corp, the largest distributor of biodiesel in Western Canada.
The plant, which is expected to produce 114 million litres of canola-derived biodiesel a year and about 10,000 tonnes of glycerin, is the most ambitious biodiesel project announced so far for the Prairies.
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Earlier, the Australian Biodiesel Group announced it would build a 20,000 litre biodiesel plant in southern Alberta, near Irricana. More plants have been announced for development in Saskatchewan.
“It’s fantastic. We haven’t had this kind of economic shot in the arm for as long as I can remember,” said Barb Isman, president of the Canola Council of Canada.
“What it tells us if you put the policies in place that we’re asking for, the investment dollars will come and we’ll have an industry in Canada and not just imported,” said Isman.
Canadian Bioenergy said it will begin a feasibility study of the project including a review of pending federal and provincial government policies and commitments to renewable fuels.
Construction is contingent on changes to government policies to encourage the production of ethanol and biodiesel. During the federal election campaign the Conservative party said it would introduce a minimum standard of biodiesel and ethanol at the pumps by the end of 2010.
Those changes would encourage the development of homegrown biodiesel and reduce the dependence on imports from the United States.
“Project approval is going to be fundamentally contingent on appropriate policies. We’ve got ourselves at a deep competitive disadvantage to the American market. We’ve got to make sure we’re competitive against that immediate competitor that will be using Canadian canola in the same quality product we can use,” said Hooper.
Even a two percent mandate of biodiesel by 2010 would take 1.2 to 1.5 million tonnes of canola, enough to give canola prices a boost, said Isman, who hopes to see the federal government introduce its biodiesel policy by fall.
If government policies are changed, the company hopes to begin construction in 2007 and open the plant in 2008.
“We’re looking at 2008 to take Sturgeon County canola oil and put it into Fort McMurray diesel tanks,” said Hooper.
Financial details are yet to be finalized. Canadian Bioenergy Corp. is doing the project design work, but it is also looking for investment partners including canola producers.
