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Biodiesel back on the radar

“Now that the bubble has burst, they’re getting more serious about it again.”

– DUSTIN WILLIAMS

With canola prices yanked back down to earth from last spring’s stratospheric highs, talk about crushing the oilseed into an environmentally friendly substitute for petroleum-based diesel has been revived.

“Is it coming back into fashion? The answer is probably yes,” said Jeff Kraynyk, manager of Manitoba’s Agri-Energy Office. “A better description might be that biodiesel is just starting to get some traction now in the province.”

Greenway Bio-diesel in Winnipeg, owned by Speedway International, is just days away from getting final approval for its 20-million-litre biodiesel production facility, he noted. The plant is already churning out batches of the fuel and sending them away for testing, he added.

“They’re getting the batches tested and tweaking the process a little bit,” he said.

Not far behind is Bifrost Bioblends at Arborg, which also plans to crush canola into four million litres of fuel a year.

Provincial regulations governing fuel quality and testing of biodiesel producers have already been passed, and now the focus has shifted toward ways to get it into driver’s fuel tanks.

A mandate for the fuel is in the process of being drafted, which targets blending 20 million litres of the fuel mixed with regular diesel each year. To encourage blenders to use it, the province is offering an 11.5-cent tax break. That wouldn’t apply to purple diesel, but the federal government has also pledged a 10-to 20-cent-per-litre sweetener for blenders.

“There is a lot happening on the policy side of biodiesel, for sure,” said Kraynyk.

Capacity threshold

The legislation requires that at least 20 million litres of annual production capacity must be in existence before the biodiesel mandate could be considered. During the last election campaign, Premier Gary Doer promised a five per cent blend by 2010.

“We probably will have that capacity very soon, given the pace of construction of plants in the province right now,” Kraynyk added.

Instead of requiring that fuel suppliers add one per cent biodiesel, creating B1 biodiesel, the province will likely opt to mandate that they use up a certain overall volume, probably the 20-million-litre-per-year figure to start, said Kraynyk.

“They could do that any way they want, whether it be a B1 or B2 blend in winter or higher in the summer. We’d give them that flexibility, so long as they meet the total volume requirement,” he said.

A recent news report quoted a Winnipeg Transit official as saying city buses could be burning a one per cent blend as early as this spring, once all hurdles are cleared and a reliable supply is available.

At Ag Days two years ago, the official launch of a biodiesel project in the Souris area was on the agenda, and was met with much optimism that it would become a reality.

Then, last year, exuberant talk of canola hitting $40 a bushel amid a stampeding commodity market stopped the project in its tracks, according to Dustin Williams, a member of the community group promoting it.

“I’m amazed at how quickly programs come and go based on what the newspaper headlines say,” he said. “They had gone blank there for a while, and all the companies that were trying to get stuff going quieted right down, too. Now that the bubble has burst, they’re getting more serious about it again.”

The committee pushing to build the Souris operation has since folded, he said, but he and a group of a half-dozen other farmers are still working on a three million-litre-per-year farm-based plant that would provide an alternate market for their canola.

Williams hinted at a potentially lucrative and previously untapped market for the canola meal byproduct.

“Oil is not going to stay low. Even though oil is back at $40 a barrel, I’m seeing diesel staying in the 80-to 90-cent range,” he said. “By springtime, we could be back at $60-$70 oil again.”

Concerns over biodiesel as a viable cold weather fuel are overstated, he added. An additive being imported by Celtic Power in Rapid City has been shown to keep the fuel from gelling below -30C, he added. [email protected]

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