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Biofuels: Western Canada’s answer to climate change, low commodity prices and rural revitalization?

01/11/2006


Global warming, declining oil supplies, and a volatile Middle East. They’re disturbing problems that affect us all. While there are no easy answers, biofuels are emerging as a potential tool to help reduce these threats – and, in the case of Western Canada, help revitalize our rural communities along the way.

Biofuels: A closer look

Biofuels are renewable fuels that can be added to gasoline and diesel fuel to help lower emissions and reduce greenhouse gases. In Canada, the most common biofuels are in the form of ethanol or biodiesel. Ethanol is produced from cereal grains such as wheat, while biodiesel is processed from canola and other oilseeds.

In 2005, the federal government announced plans to mandate that five per cent of Canadian gasoline and diesel fuel contain renewable content by 2010. The announcement, combined with concerns over fluctuating oil prices, climate change, and our own struggling agriculture industry, have sparked a growing interest in developing Western Canada’s biofuels industry.

“As soon as oil hits the $50 a barrel range and higher, biofuels become a realistic alternative,” says Gil Assie.

Gil is the leader of MNP’s biofuels team, and was a key advisor in developing the Canadian Renewable Fuels Strategy for the Canadian Renewable Fuels Association. The paper provides an insightful look at the potential for biofuels development in Canada, including recommendations on how the federal government can help support and promote the industry.

The benefits of a thriving biofuels industry would be significant for both the environment and the economy. Biofuels would contribute to a major reduction in greenhouse gas emissions – up to 4.2 mega tonnes annually.

The economic advantages are equally impressive. They include a new domestic market for oilseeds and grains, which should result in higher commodity prices; 14,000 new jobs; and $1.5 billion of investment.

According to Gil, the majority of that investment would focus on building the processing plants required to produce biofuels.

“Investing in a biofuels plant offers farmers a new way to increase their profitability through access to new cropping alternatives, new markets for their production and the ability to have an ownership interest in a value-added enterprise.”

Gil says the investment would also help revitalize rural communities across the West through increased job creation and economic activity.

Helping the industry grow

To ensure the biofuels industry has the support and direction it needs to grow, the Renewable Fuels Strategy recommends the federal government undertake a number of key steps. These include:

  • Launching biofuels incentive programs. To help establish a level playing field, these programs should be on par with those already offered in the U.S. to promote investment in biofuels facilities and provide for a competitive biofuels industry.
  • Renewable Fuel Standard. The Canadian renewable fuels strategy should include all transportation fuels and guarantee a role for both ethanol and biodiesel.
  • Increasing public awareness. Currently, biofuels are not widely understood in Western Canada or in other parts of the country. A national awareness campaign could help promote the benefits of biofuels and increase public acceptance.

The federal government is expected to provide details on the roll-out of its biofuels strategy as part of the 2007 Federal Budget. Gil says he is optimistic the federal government will incorporate the group’s key recommendations in their plan, and looks forward to what the future holds.

“This is an exciting time, and with our natural resources and industry expertise, Western Canada has the potential to become the next world biofuels leader.”

By Gil Assie, Biofuels Team Leader. For more information, please contact your local MNP advisor or Gil at 1.877.500.0778. To download the Canadian Renewable Fuels Strategy, visit greenfuels.org.