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

  • Real estate reality check: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Here's the consumer news you need to know from CBC's Marketplace. Get this in your inbox every Friday. Sign up here. House cooling Time for some cold water on that hot southern Ontario real estate market? Here's how the province is proposing to rein in the madness. Source
  • Birthing April the Giraffe becomes cash cow for tiny U.S. zoo

    Economic CTV News
    April the giraffe has become a cash cow for a tiny zoo in rural upstate New York, thanks to a livestream of her pregnancy and birth that has enthralled viewers around the world. Owners of the Animal Adventure Park won't say exactly how much they've pulled in from all the April-related ventures, but marketing experts who specialize in viral internet campaigns conservatively estimate the haul in the hundreds of thousands of dollars. Source
  • Despite special regulations, edible entrepreneurs hope to take bite of Canada's marijuana market

    Economic CBC News
    Amid all the uncertainty about the federal government's ?plans to legalize marijuana by mid-2018, a culinary mystery stands out: How will marijuana-infused food products, commonly called "edibles," fit into the legal regime? Ottawa has signalled that regulations governing the sales of edibles won't be ready by the time recreational marijuana becomes legal. Source
  • 'Vital for tenants' or 'textbook' bad policy: How rent control works in NYC

    Economic CBC News
    Before Ontario's provincial government announced its plans to expand rent control, some economists were already sounding alarm bells about imposing the controversial policy. In response to some Toronto tenants who say their rents have doubled, the government on Thursday unveiled its Fair Housing Plan. Source
  • What we can learn from New York's rent control regime

    Economic CBC News
    Before Ontario's provincial government announced its plans to expand rent control, some economists were already sounding alarm bells about imposing the controversial policy. In response to some Toronto tenants who say their rents have doubled, the government on Thursday unveiled its Fair Housing Plan. Source
  • Despite special regulations, entrepreneurs hope to take bite of Canada's marijuana edibles market

    Economic CBC News
    Amid all the uncertainty about the federal government's ?plans to legalize marijuana by mid-2018, a culinary mystery stands out: How will marijuana-infused food products, commonly called "edibles," fit into the legal regime? Ottawa has signalled that regulations governing the sales of edibles won't be ready by the time recreational marijuana becomes legal. Source
  • Canada's central banker on Ontario housing move: 'I'm happy'

    Economic CTV News
    WASHINGTON -- Measures to cool the housing market in the Greater Toronto Area have received a warm response from Canada's central banker, who said Saturday it should have some effect on runaway housing prices. "I'm happy there are measures," Stephen Poloz, the governor of the Bank of Canada, told reporters during financial meetings in Washington. Source
  • Opening shot coming this week in fifth softwood lumber war between Canada-U.S.

    Economic CTV News
    WASHINGTON -- The opening shot in a fifth softwood-lumber war between the United States and Canada is expected this week, and policy-makers north of the border are preparing to calculate the potential damage of American duties. Source
  • Global finance leaders grapple with globalization fears

    Economic CTV News
    From left, German Federal Minister of Finance Wolfgang Schauble, Zhou Xiaochuan, Governor of the People's Bank of China, Chinese Finance Minister Xiao Jie and International Monetary Fund Managing Director Christine Lagarde gather for the Family Photo during the G20 at the 2017 World Bank Group Spring Meetings in Washington, Friday, April 21, 2017. Source
  • LinkedIn for farmers aims to remedy labour shortage

    Economic CTV News
    If you know how to tag and process cattle or drive a “semi to haul silage,” or need to hire someone who does, this new website could be for you. WorkHorsehub.ca is a farmer-designed online hub aimed at connecting agriculture workers with jobs in the industry. Source