Canada's biofuels industry facing difficulty despite climate change push

CALGARY - Canada's biofuels industry is facing significant headwinds even as interest grows in ways to reduce carbon emissions.

A combination of low oil prices, the end of a biofuels incentive program, continued competition from U.S.

See Full Article

imports, lack of infrastructure, and stricter fuel efficiency regulations are all expected to be barriers to growth in the industry.

Production could even go down, with the International Energy Agency predicting in its latest five-year outlook that Canada's ethanol production will plunge 38 per cent, from about 1.68 billion litres a year in 2015 to around 1.04 billion litres by 2020 because of those headwinds.

Andrea Kent, president of the Canadian Renewable Fuels Association, said in an email that she disagrees with that outlook.

"Canada continues to be well positioned to be a leader in renewable fuels," said Kent.

She said biofuels are well placed to help governments achieve carbon reductions, and is pushing to increase the required amounts of biodiesel in gasoline from two per cent to five.

"This presents an ideal opportunity to leverage the successful biofuels mandates to help governments reach those ambitious greenhouse gas reduction targets," said Kent.

But Environment and Climate Change Canada spokeswoman Natalie Huneault said the department "has no plans to make changes to the federal Renewable Fuels Regulations at this time."

The government has also confirmed that the ecoENERGY biofuels program, which paid producers an extra per-litre rate to encourage more domestic production, will expire as planned in 2017.

Despite the program, Canada has never produced enough ethanol to meet the five per cent federal blending mandate, and imports hundreds of millions of litres a year from the U.S. to help supply the 2.2 billion litres of ethanol needed.

And some question how effective increasing production would actually be on reducing carbon emissions.

"I would argue it's a short-term solution to a long-term problem, and isn't really where we need to go," said David Layzell, director of the Canadian Energy Systems Analysis Research Initiative at the University of Calgary.

He's looked at the life cycle impact of ethanol on carbon emissions and said it doesn't offer significant overall savings.

Estimates of actual carbon reductions vary, but the U.S. Energy Department says corn-based ethanol reduces carbon emissions 19 per cent on average compared with gasoline, and can be as much as 52 per cent.

How much that carbon reduction costs is also up for debate, with Layzell saying in some cases it could cost as much as $800 per tonne of carbon reduction.

"I would argue that may not be worth it," said Layzell.

Biodiesel is more effective at reducing emissions, but it suffers from poor economies of scale and the IEA is forecasting largely flat production in Canada of 348 million litres a year for the next five years.

Ian Thomson, president of the Western Canada Biodiesel Association, said the fuel would be able to compete without incentives if governments put a real price on carbon, one that is multiples above the $30 a tonne being proposed.

"If you had a real cost of carbon you wouldn't need any quote unquote subsidies for biofuels, because you'd have a level playing field," said Thomson.

He said biofuels are important because they offer a proven and immediate solution to carbon emissions.

"Biofuels can deliver really significant reductions right now. And there's room for more of them," said Thomson.

Natural Resources Canada spokeswoman Tania Carreira-Pereira said in an email that the government may yet consider new policies for biofuels, as discussions continue on Canada's framework to address climate change.

"Consideration of the transportation sector, including the role of that alternative fuels can play to meet these commitments, will be part of these ongoing discussions," she said.



Advertisements

Latest Economic News

  • Canada could use a $5 coin — and a lot less small change: Don Pittis

    Economic CBC News
    Foonie doesn't really work, so Canadians will have to put on their thinking caps to figure out a name for the $5 coin. As the loonie turns 30 this week, painful though it may be, we must inevitably begin to prepare ourselves to say goodbye to our blue Wilfrids. Source
  • Oilsands, mining companies watch B.C. solar project with intrigue

    Economic CBC News
    After a century of pulling lead and zinc from the Sullivan mine in southeast British Columbia, the energy company Teck recently shut down the operation and began years of restoration work. Some of the land outside the city of Kimberley became a meadow with grass and trees, but it remained tainted after decades of mining activity. Source
  • Several prospective jurors excused from Shkreli case over impartiality

    Economic CTV News
    NEW YORK - Several prospective jurors have been excused from the federal securities fraud trial of an ex-pharmaceutical company executive because they claimed they couldn't be impartial. Jury selection will continue Tuesday morning in Brooklyn. Source
  • Asian stocks move higher after mixed Wall Street result

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian stocks were mostly higher in range-bound trade on Tuesday after Wall Street closed mixed. KEEPING SCORE: Japan's Nikkei 225 rose 0.3 per cent to 20,213.62 while South Korea's Kospi added 0.1 per cent to 2,391.33. Source
  • 'Like bombs': Bankrupt company's air bags still out there

    Economic CTV News
    Takata's lethally defective air bags proved to be the company's undoing Monday. But it could take years to get the dangerous devices off the road in the U.S. and around the world. Crushed by lawsuits, fines and recall costs, the Japanese auto parts supplier filed for bankruptcy in Tokyo and Delaware and will sell most of its assets for $1.6 billion to a rival company. Source
  • 'A seat at the table': GM CEO Mary Barra on engaging with Trump

    Economic CBC News
    At a time when some business leaders have pulled away from working with U.S. President Donald Trump, the head of General Motors sees a need for engagement with the White House. "I think it's always important when you have an opportunity to have a seat at the table to take it, where decisions are being made," GM CEO Mary Barra said during an exclusive interview with Peter Armstrong, host of CBC News Network's On the Money. Source
  • Alphabet partners with Avis to manage self-driving car fleet

    Economic CBC News
    Waymo, the self-driving car unit of Alphabet Inc, said on Monday it signed a multi-year agreement with Avis Budget Group Inc for the car rental firm to manage its growing fleet of autonomous vehicles, sparking a surge in Avis Budget's stock. Source
  • Air Miles raises cap on in-store redemptions

    Economic Toronto Sun
    TORONTO — Air Miles is raising some of the recent daily limits imposed on redeeming miles for in-store purchases from retailers. The customer loyalty program says the new daily limit on Air Miles Cash redemptions, in most cases, has been raised to $100. Source
  • Disgruntled U.S. Tim Hortons franchisees follow Canadian example, form alliance

    Economic CTV News
    TORONTO - A group representing Tim Hortons franchisees who are unhappy with the management of the coffee-and-doughnut chain says it now has a U.S. chapter, a development that could put further pressure on the parent company. Source
  • Canada, China sign no-hacking agreement designed to protect trade secrets

    Economic CTV News
    OTTAWA -- Canada and China have agreed not to engage in state-sponsored hacking of each other's trade secrets and business information. The two countries reached the agreement during a meeting last week that was part of their new high-level national security dialogue. Source