Biofuel promoters say Santa came a few days early with the Dec. 20 announcement of a national renewable fuel mandate, but one high-ranking provincial politician said all Santa left behind was a lump of coal.
The federal Conservatives have followed through on their election promise to regulate an annual average renewable content of five percent in gasoline by 2010 and implement a two percent renewable content requirement for diesel fuel and heating oil by 2012.
Along with the proposed mandates came $345 million in federal funding for two agriculture programs to bolster the development of a biofuel industry.
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The $200 million Capital Formation Assistance Program is a four-year program to encourage producer participation in the industry.
The $145 million Agricultural Bioproducts Innovation Program is a five-year program to promote research and development on biofuel and other bioproducts.
“We’re committed to ensuring that opportunities exist for producers in this new bio-based economy,” said federal agriculture minister Chuck Strahl in making the announcement in Saskatoon.
Environment minister Rona Ambrose, who was also on hand for the announcement, said once the mandate is fully implemented it will remove an amount of greenhouse gas emissions equivalent to taking almost one million vehicles off the road a year.
“Canadians will reap environmental benefits, our farmers and rural communities will profit, and by continuing to work towards a viable domestic biofuels industry we will secure Canada’s place in the growing bioeconomy,” she said.
Canola Council of Canada president Barb Isman said the two percent diesel standard and access to funds for farmers are key steps in getting the biodiesel industry off the ground.
“We, along with biodiesel producers and distributors, are confident we can build the necessary infrastructure to meet a two percent biodiesel requirement by 2010 – two years ahead of the 2012 timeline,” she said.
Saskatchewan Ethanol Development Council president Lionel LaBelle said the only thing missing from the ceremony was a hearty “ho, ho, ho” from Strahl because he just delivered a huge Christmas present to the province’s producers.
“I think it’s a great day for Saskatchewan,” he said.
But the province’s deputy premier didn’t see it that way, saying the announcement fell short of his expectations on many fronts.
Clay Serby noted that in her speech Ambrose tied the implementation of the new biofuel legislation to the passage of Canada’s Clean Air Act, a bill proposed by the Conservatives to decrease air pollution and greenhouse gases.
He finds that link disturbing.
“The likelihood of the Clean Air Act getting passage in Ottawa is about as likely as us waking up tomorrow morning and all the snow in Saskatchewan will be gone,” said Serby.
He was disappointed the mandate wasn’t packaged with the tax incentives and subsidies needed to put Canadian ethanol and biodiesel projects on equal footing with plants in the United States.
Strahl said if the government does anything on that front it would be part of the next budget announcement in February.
“We can’t build the industry without the incentives piece,” Serby said.
He was also irked that the federal government seems to be going it alone in establishing a national biofuel policy. Serby spoke to four of his counterparts in other provinces who knew nothing about the Dec. 20 announcement.
“The truth is the provinces haven’t been engaged at all.”
And while Serby acknowledged that there seems to be a “strong commitment” in Ottawa for producer involvement in the industry, he noted there is nothing in the regulation that will assure that.
LaBelle is pleased with the $200 million program to encourage producer involvement in the industry, but he hopes the money isn’t doled out on the same basis as previous biofuel programs, which saw much of the funding go to large oil companies and corn-based projects in Ontario.
“That would just be terrible if they did that,” he said.
However, he is confident they won’t. The fact that the federal government made its long-awaited announcement in Saskatoon shows the government recognized that the industry should be headquartered where the biofuel feedstock is located.
“Obviously the federal government has got the message – get producers involved,” LaBelle said.
