Western Canadian wheat and canola farmers will soon have more local buyers for their crops.
The federal government has picked which ethanol and biodiesel plants will receive the remainder of funding left in the $1.5 billion EcoEnergy for Biofuels program.
In 2008 and 2009, Natural Resources Canada signed contribution agreements with 21 biofuel companies worth $966 million.
That left $473 million to be doled out after deducting program administrative expenses.
The government received 48 eligible applications for the remaining funds. Of those, 13 were submitted by existing biofuel producers and 35 came from new producers.
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Natural Resources Canada has determined 11 of the 13 submissions from existing producers met its eligibility criteria.
Fourteen of the 35 submissions from new producers were deemed eligible but there isn’t enough money remaining for all of those projects.
The government plans to fully fund 10 projects and partially fund another two. As well, two will receive money if it becomes available.
Contribution agreements for the 12 successful new producer applications will be mailed this month.
One of the requirements of the EcoEnergy program is that plant expansion or construction be completed by Sept. 30, 2012.
“We fully expect that projects will move much faster than that,” said Gordon Quaiattini, president of the Canadian Renewable Fuels Association.
The federal EcoEnergy program is the make-or-break program for biofuel plants. Quaiattini said it would be a challenge for a company to compete without that funding.
He anticipates enough new capacity will be built to meet the five percent ethanol mandate, which comes into effect Dec. 15.
The mandate will be phased in with the first compliance period ending Dec. 31, 2012, giving oil companies two full years to blend two billion litres of ethanol into the gasoline they provide to consumers.
The biofuel industry is waiting for Ottawa to set a start date for the two percent biodiesel mandate, which will require more than 500 million litres of the renewable fuel.
“There is a commitment to bring that into effect in 2011. We’re going to hold the government to meeting that commitment,” said Quaiattini.
Natural Resources Canada will not announce the successful projects until the contribution agreements have been signed and returned, so it is unknown how many western Canadian ethanol and biodiesel projects made the cut.
The $473 million remaining in the program will pay for an additional 646 million litres of annual ethanol production and 526 million litres of biodiesel.
