Canada Biofuels Sector Seeks Bigger Fuel Mandate

Canada’s biofuels industry will ask the government early in 2010 to expand fuel blending mandates and production incentives, even as plants rapidly boost capacity to meet incoming targets, the president of the Canadian Renewable Fuels Association said Nov. 12.

“We absolutely would be looking at all those instruments as a way of ensuring we build out the additional capacity,” Gordon Quaiattini said in an interview with Reuters from Ottawa.

Industry officials have not settled on the specific new targets they will request or when they will take effect.

Canada has given annual incentives for up to seven years to 24 biofuel producers, including Husky and Suncor, from a $1.5-billion program.

The biofuels industry will also ask government to set Canada’s first mandate for advanced biofuels, such as those made from algae, wood and grasses, which are not yet in commercial production, Quaiattini said.

Canada’s current biofuel supply will fall short when the first federal government mandate of five per cent renewable content in gasoline takes effect in September 2010 and a two per cent federal mandate for renewable content in diesel takes effect in 2011.

Canada will have to import 150 million to 300 million litres (39.6 million-79.3 million gallons) of ethanol during late 2010 and 2011 to fulfil the first mandates, Quaiattini said.

Canada currently produces 1.4 billion litres of ethanol annually, with the incoming mandates creating a need for two billion litres in total. Capacity for at least another 300 million litres annually is being planned.

Canada already imports some ethanol from the United States and Brazil.

Canadian plants produce 130 million to 140 million litres of biodiesel, with demand expected to rise to 500 million to 600 million litres.

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