FocusCanada must align biofuels programmes

06 April 2007 16:55  [Source: ICIS news]

TORONTO (ICIS news)--Canada must harmonise a patchwork of federal and provincial initiatives as it works to achieve national biofuels blending mandates, a top Canadian petrochemicals analyst said on Friday.

 

Canada’s federal government aims to have in place a 10% mandate for blending ethanol by 2010 and a 2% mandate for blending biodiesel by 2012.

 

In order to achieve these targets, Canada should streamline its “patchwork quilt” of differing programmes, regulations and incentives developed by its provinces, John Cummings, an independent Toronto-based petrochemicals analyst, said in a research report to clients.

 

Saskatchewan already has a 7.5% ethanol mandate in place, and Ontario has a 5% mandate.

 

Manitoba has legislation on its books awaiting the completion of plants to supply the required ethanol, and various other provinces, including Alberta, also have incentives and targets for biofuels, Cummings said.

 

“A uniform system would be easier for both sides to work with,” he said.

 

Cummings said it would take at least two years to prepare the complex regulations for the federal mandates.

 

Canada's rules should also dovetail with those of the US Environmental Protection Agency which will likely be biased in favour of biobutanol, biodiesel and cellulosic ethanol, he added.

 

On the federal side, the government is working on programmes that would favour domestic supply over imports. One step was replacing a Canadian 10 cent/litre excise tax exemption for ethanol with producer incentives, Cummings said. 

 

Also, the recent federal budget allocated money to research and develop biofuels made from agricultural and wood wastes, a measure that could benefit some Canadian firms, he said.

 

One company is Iogen, an Ottawa-based cellulosic ethanol firm that is looking at sites for a commercial production facility.

 

Another beneficiary could be renewable fuels technology firm SunOpta. The company has teamed up with Greenfield Ethanol, Canada's largest ethanol producer, to develop a cellulosic project in Ontario that would use poplars and aspen as feedstock.

 

Finally, Vancouver-based Lignol Innovations and oil and gas major Suncor are planning a cellulosic unit in British Columbia, based on wood waste feedstock. The province has plenty of wood waste due to a pine beetle infestation, Cummings said.

 

As for conventional ethanol production, there are a number of large new projects under construction or planned in Canada, he said.

 

These include a 150m litre/year unit by Universal Energy in Saskatchewan, due to start up in the fourth quarter this year.

 

Another company, Northern Ethanol, is expected to soon break ground for a 400m litre/year plant near Barrie, north of Toronto, which could be completed within 18 months after start of construction, Cummings said.

 

Suncor recently started operations at a 200m litre/year plant at Ontario’s petrochemicals hub in Sarnia. The facility is Canada's largest ethanol plant so far.

 

Greenfield started up a new 120m litre/year unit near Varennes, Quebec earlier this year and is planning two 200m litre/year projects in Ontario.

 

In addition, there are a number of agricultural cooperatives working on various projects, Cummings said.

 

($1 = C$1.15)


By: Stefan Baumgarten
+1 713 525 2653



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