Provinces review climate change biofuel policies

Manitoba, Quebec and Ontario may review rules on carbon pricing and greenhouse gas reductions

Some provinces are in the midst of devising new energy and climate change policies that will have implications for farmers.

Fuel and fertilizer costs could go up if provincial governments decide to put a price on carbon, but there will also be opportunities in the form of carbon offsets and biofuel production.

The Western Canada Biodiesel Association is seizing the opportunity to engage with policymakers to figure out what role renewable diesel will play in their climate change strategies.

Saskatchewan, Manitoba and Al-berta all have two percent renewable diesel mandates. British Columbia is double that.

“We want to open up the discussion to incrementally grow these mandates to five percent,” said Doug Hooper, director of policy and regulation with the association.

The industry has matured. Infrastructure, such as tanks and blending equipment, is in place at fuel outlets, and manufacturers and retailers are familiar with the product and the quality control protocols.

“We think it’s time now to move things forward,” Hooper said.

“We’ve got production capacity in place.”

The existing mandates have created annual demand for 350 million litres of renewable diesel.

“That is close to one million tonnes of seed if it was all supplied from canola,” said Hooper.

But that isn’t the case. Mandates are being met in part with imported soybean biodiesel from the United States and hydrogenation-derived renewable diesel from overseas that is made from palm and tallow oil.

Still, it is another domestic market for canola oil, and farmers would welcome an increase to five percent mandates.

The Western Canada Biodiesel Association and the Alberta Canola Producers Commission recently met with Alberta’s agriculture, energy and innovation ministers to discuss that province’s climate change strategy renewal plan.

Hooper said Alberta is nearing the end of the first five-year period of its renewable fuel standard, which makes it an ideal time to talk about the contributions biofuel has made to reducing greenhouse gases and how it fits into Alberta’s new climate change plan.

Alberta is the only jurisdiction that has established a performance standard for biofuel. It is required to reduce greenhouse gas emissions by 25 percent per litre.

Hooper thinks it is time to bring that number into line with the European Union and the United States, which have a 50 percent reduction requirement.

“We can do it. We can meet a higher standard,” he said.

It is also a good opportunity to analyze Alberta’s bioenergy producer credit program, which is set to expire next March. The program was established to offset the US$1 per gallon blender’s tax credit offered in the United States.

Ward Toma, general manager of the Alberta Canola Producers Commission, said the program needs to be extended.

“Otherwise there is an incentive to move canola oil into the United States, turn it into biodiesel, collect the subsidy and then ship it back,” he said.

“And then we don’t get any benefits.”

The U.S. biodiesel tax incentive expired Jan. 1. The industry is pushing for a multi-year extension of the credit rather than the usual one-year extension.

Hooper said Manitoba, Quebec and Ontario are also reviewing their climate change policies. He expects it will result in new regulations on carbon pricing and greenhouse gas reductions before the end of the year, which is a golden opportunity for the biofuel sector.

“It’s going to be a very busy year trying to sort out how it works and what are the best options for the farm sector and downstream processors like biofuels,” he said.

Hooper doesn’t expect much to happen in Alberta until after the anticipated spring election.

“When a new government is established, that’s when we roll up our sleeves and really get to work on the details,” he said.

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