Canada seen as self-sufficient under bio-mandate

27 June 2008 22:49  [Source: ICIS news]

HOUSTON (ICIS news)--Canada is expected to be largely self-sufficient under a new renewable fuels mandate and probably will not provide a market for US biodiesel producers, a source said on Friday.

The Canadian Senate voted on Thursday to implement a 5% renewable content in gasoline by 2010 and 2% renewable content in diesel fuel and heating oil by 2012.

But with plenty of farmland available for growing biodiesel feedstock crops and a relatively small driving population – about 20m vehicles, compared with 238m in the US - the country should not need too much help from abroad, analysts said.

“It’ll be a negligible market effect. They don’t use much. They can supply their own need,” one biodiesel market player said.

As of now, the country has capacity to produce 223m gal/year of ethanol and 25m gal/year of biodiesel, according to the Canadian Renewable Fuels Association.

That amount is expected to grow in the coming years, however, since the Canadian government has committed $2.2bn (€1.4bn) over nine years to support a domestic renewable fuels sector in the country, according to the government agency Agriculture and Agri-Food Canada.

“They’ll be able to hold their own. By the time the mandate kicks in, it will have minimal effect on the US,” another analyst said.

The US Renewable Fuels Association said the move struck a symbolic chord, however.

“For the largest exporter of oil to the US to strongly endorse the use of biofuels speaks volumes abut the role biofuels must play in meeting the growing world demand for liquid fuels,” said association president Bob Dinneen.

($1 = €0.63)

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By: Ben Lefebvre
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