One of Canada’s biggest users of diesel fuel says it will pay more at the pump once the federal biodiesel mandate is implemented.
The Canadian Trucking Alliance, which represents more than 4,500 trucking companies, said consumers should brace for a one to eight cents per litre increase in diesel prices after the July 1 launch of the two percent mandate.
The estimate comes from a comparison of biodiesel blends and regular diesel in the United States. The alliance said the price increases will add $2,100 to $6,000 to a trucker’s annual fuel bill.
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“The biofuel producers are getting literally everything they want – regulatory certainty, a captive market and massive subsidies – all of which they can take to the bank,” CTA chief executive officer David Bradley said in a news release.
“Whereas the consumer, mainly truckers, will get even higher fuel prices than we currently have at a time when trucking companies are just finding their financial legs after being ravaged by recession.”
The Canadian Renewable Fuels Association disputes the CTA’s numbers.
It said a regulatory impact assessment conducted by Environment Canada estimated that diesel costs would increase by an average of one-third of a cent per litre over the next 25 years.
However, Bradley said that same assessment determined that the federal biodiesel mandate will cost Canadian taxpayers $2.4 billion over 25 years while reducing carbon dioxide emissions by only one million tonnes a year.
“It really makes you wonder why we’re doing this,” he said.
Gordon Quaiattini, president of the Canadian Renewable Fuels Association, said that portion of the Environment Canada assessment is flawed.
The association hired regulatory economists to conduct a cost-benefit analysis using a different set of data and assumptions. They found a $1.66 billion benefit to taxpayers over 25 years.
“The benefits of moving ahead with the two percent renewable diesel standard far outweigh the costs,” said Quaiattini.
He said Environment Canada decreased its cost estimate for the five percent ethanol mandate by about 40 percent between the original and final publications of the regulation.
The trucking alliance continues to worry about biodiesel blends gumming up engines during certain times of the year in various parts of the country.
Quaiattini said he can’t understand those lingering concerns, considering Canadian studies have found no engine performance or maintenance problems.
“This has been one of the most tested fuels ever.”
He said no performance problems have been reported in British Columbia since its mandate went into effect Jan. 1, 2010.
The trucking alliance is using a 60-day comment period on the proposed regulation to ask the federal government to introduce amendments that will protect consumers of the fuel.
“We need to be sure the fuel we put in our tanks works, it has to be plentiful in supply and it should not cost us more than regular diesel,” said Bradley.
The comment period closes April 24.
