Ottawa accused of trying to water down two percent biodiesel mandate
Canada’s renewable diesel mandate is being met by a flood of imported product, according to government documents.
The country is awash in imported soybean and canola biodiesel from the United States and hydrogenation-derived renewable diesel (HDRD) from overseas, according to a regulatory impact analysis statement on proposed changes to the federal mandate.
“Moving forward, it is expected that renewable fuel content will consist of roughly 90 percent imports and 10 percent domestic product to meet federal regulatory requirements,” said the government in the document.
It went on to state that imported HDRD made from palm and tallow will account for more than 95 percent of renewable content blending in Eastern Canada.
The Canadian Renewable Fuels Association insists the government’s numbers are bogus and are intended to support its proposal to water down the two percent renewable diesel mandate.
“We’re seeing Canadian-based canola being shipped into the United States for upgrading and then sent back into Canada. They are describing that as an import,” said CRFA president Scott Thurlow.
Once Archer Daniels Midland’s Lloydminster canola biodiesel plant starts in September the flow of imported canola biodiesel from the U.S. will slow.
The ADM plant will be capable of producing 265 million litres of the alternative fuel annually, bringing Canada’s total biodiesel capacity up to 450 million litres.
The existing federal mandate requires about 600 million litres of renewable diesel per year.
Thurlow also takes issue with the contention that HDRD will comprise such a large percentage of renewable diesel blending in Eastern Canada.
A Feb. 2012 report on renewable diesel infrastructure prepared for Natural Resources Canada said most Canadian refineries choose HDRD over biodiesel due to its favourable physical properties, reliability, good reputation of existing suppliers and the ability to purchase large volumes of the product.
Thurlow acknowledged there are some advantages with that form of renewable diesel.
“Its disadvantage is that it is ruinously expensive,” he said.
“More and more biodiesel is pushing the HDRD out of the marketplace and that’s being done almost entirely because of price.”
Brian Ahearn, vice-president of the western region for the Canadian Fuels Association, said some fuel companies may buy more Canadian biodiesel when the ADM Lloyd-minster plant comes on line, but there is no obligation in the mandate to use domestic product, so companies will source it from where it makes the most economic sense.
When the federal government announced the renewable diesel mandate it said it would be good for the environment and for canola farmers. A year into the mandate there is barely any canola biodiesel production to speak of. Thurlow said that is due to a shortcoming of government policy on this file.
“I have been very, very critical of the government and the EcoENERGY program that they created,” he said.