Jim Grey let out a huge sigh of relief when he saw the federal government’s plan for its looming clean fuel standard.
“It could have been a lot worse,” said the chair of Renewable Industries Canada, which represents ethanol and biodiesel manufacturers.
Environment Canada published the regulatory framework for the standard on its website Dec. 13 and in the Canada Gazette, Part 1, Dec. 23.
Grey was relieved that the framework kept the five percent national ethanol mandate and two percent biodiesel mandate intact until the next review in 2030.
Read Also
Government, industry seek canola tariff resolution
Governments and industry continue to discuss how best to deal with Chinese tariffs on Canadian agricultural products, particularly canola.
“Given the opposition that we were facing from fuel producers, we’re relatively positive with the outcome,” he said.
Powerful organizations such as the Canadian Fuels Association were strongly against keeping the biofuel mandates in place.
“The CFS will likely increase the demand for both ethanol and biodiesel,” association president Peter Boag said in an Oct. 18, 2017, commentary preceding publication of the framework.
“But it should be an option rather than a mandated requirement.”
Renewable Industries Canada was pushing for a doubling of the mandates as one of the easiest ways to help meet the standard’s objective of achieving 30 megatonnes of annual reductions in greenhouse gas emissions by 2030, the equivalent of taking seven million cars off the road.
It wanted a 10 percent ethanol mandate and a five percent biodiesel mandate.
“Would we have liked 10? Yes. Are we happy that they’ve maintained five? Absolutely,” said Grey.
He believes maintaining the existing mandates will lead to new construction of biofuel plants as well as expansions of existing facilities because it is something tangible developers can use when arranging financing.
“If I go to a banker and say, ‘there’s a clean fuel standard, carbon credit trading and carbon intensity thresholds,’ their eyes glaze over,” said Grey.
“If I go to a bank and say, ‘there’s a national mandate that there has to be at least five percent ethanol in the gasoline pool,’ they understand that.”
One of the other biofuel-related victories in the framework is that the government will not be using the controversial indirect land use change factor when conducting a life cycle analysis of biofuel.
The factor is used in some jurisdictions to penalize biofuel for the destruction of environmentally sensitive land by promoting the expansion of cropland.
Grey was also pleased that the framework will help biofuel companies offset carbon taxes associated with being big users of natural gas by getting credit for reducing greenhouse gases in fuel emissions.
Written comments on the framework are now being accepted.
The objective is to publish draft standards by late 2018.
