One of the few operating biodiesel plants in Western Canada thinks the federal government is developing cold feet about its decision to support the sector.”If they are backpedalling because of the economy or pressure from the petroleum industry, they better let us know,” said Zenneth Faye, executive manager of Milligan Bio-Tech Inc.The delayed implementation of a key subsidy program and a new study conducted on behalf of Environment Canada showing the costs of the looming biodiesel mandate far outweighing the benefits have Faye wondering about Ottawa’s commitment to the industry.”We’re not going to spend another dime until they get this sorted out in this country. I’m not going to ask our shareholders to be held ransom to the whim of government,” he said.Milligan Bio-Tech is a Foam Lake, Sask., firm that has the capacity to produce 20 million litres of canola biodiesel each year and plans to expand that to 150 million litres.But the company has been struggling due to the lack of provincial or federal biodiesel mandates and the failure of the U.S. government to renew a $1 US per gallon blender’s tax credit that expired on Dec. 31.”We’ve got no place to ship (product) without losing about $10,000 on every truck load that goes out,” said Faye.One thing that would help the company is receiving the 20-cents-per-litre subsidy promised by the federal government’s through the ecoEnergy for Biofuels program.”I think it’s a stalling practice by the federal government to walk away from this,” Faye said.A study prepared for Environment Canada by EcoRessources Consultants casts doubt on the net societal benefits of a biodiesel mandate.The study concludes that the two percent federal mandate scheduled for implementation in 2011 will cost fuel producers and importers an estimated $5.3 billion over the following 25 years and will deliver only $1 billion worth of benefits through reduced greenhouse gas emissions.”The ERC study provides additional credence to concerns raised by CTA and others that there is little to be gained from a biodiesel mandate from an environmental perspective and that the impetus for such a policy is really to create a new market for farmers,” said the Canadian Trucking Alliance in a news release.The study also showed that biodiesel has lower energy content than conventional diesel, forcing consumers to purchase an extra 604 million litres of diesel over the next 25 years.Extra costs in the system will be passed to consumers in an estimated average annual diesel price increase of 99 cents per litre across Canada, according to the study.Faye said it sounds like there were petroleum industry dollars behind the study, which he said ignores environmental and economic benefits of biodiesel.He worries the federal government will keep delaying the implementation of key policies.”Eventually there will be an election and we’ll be at ground zero again,” said Faye.
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