Ottawa needs to get serious about encouraging renewable fuels

A constantly churning industry with various provincial standards 
isn’t a good foundation for growth, proponents say

Ottawa needs to get serious about encouraging renewable fuels

If the federal government wants to see renewable fuels attracting investment and growing, it needs to set a national standard and provide stability.

That’s according to Warren Mabee, public policy professor at Queen’s University, speaking at the Renewable Fuels Canada Forum, held recently in Ottawa.

Sticking with the existing provincial standards means every province goes its own way, which doesn’t encourage the creation of a national industry, Mabee said. The standard has to be more than regulations to generate research and development, new fuel refineries and consumer demand for biofuels. Biofuels have demonstrated they can reduce carbon emissions when blended into petroleum fuels.

“We need to connect the dots to get a meaningful policy,” he added. “We need a comprehensive strategy to bring more biofuels to market. That includes a paradigm shift in technology.”

The federal government should steadily ratchet up its renewable fuel goals to encourage Canadians to get with the program, while remembering it takes 15 years to bring a new processing technology to full production, he pointed out.

He also said that a national carbon tax has to be significantly greater than the current $10 a tonne to convince motorists to look for alternatives.

“We have to have alternatives to offer them and not just the pain of higher gas prices,” he said. “In urban areas, better public transit provides commuters with an option.”

Governments could push the transportation sector to aggressively reduce its 30 megatonnes of annual carbon emissions, he said.

David Bressler, executive director of the Biorefining Conversions Network, said that with gasoline prices restrained by global oversupply of petroleum in recent years, the impact of a carbon tax won’t have much influence on consumers. Federal officials need to look “… at where the prices and taxes could be in five years.”

“We need a long-term policy to allow renewable fuels to compete,” he said.

Even with years of biofuel production, there still is no major biorefinery in North America and a lot of companies have entered and departed the biofuel industry during that time. The industry needs to be stable. To be successful, a biorefinery will have to generate a wide variety of products.

A major challenge for biorefineries is “putting together a stable supply of agriculture feedstock. It has to be a system that makes money for them and the suppliers.”

He said the oilsands in Alberta and Saskatchewan required years of development and government subsidy before they became an economic force and the same backing should be available to biofuels so they can become profitable and sustainable.

“We need a policy incentive for biofuels that matches what the petroleum sector has received over the years,” Bressler said.

Sandy Marshall, executive director of Bioindustrial Innovation Canada, said revenue from the carbon tax could be used to support the creation of technology needed for biofuel development and carbon sequestration. He also urged government to give agriculture credit for the efforts the sector has made to reduce its greenhouse gas emissions and increase its carbon storage in the ground.

The biofuel industry needs stability to attract investment, he added. If the industry is to grow to what it should be in 30 years, “there will be companies in it that don’t exist now,” he said. The important step for them is to keep their costs down and accept there will be some technological dead ends.

“Investors need confidence to invest in a company they expect will have marketable products,” Marshall said.

In addition to financial support, the best assistance governments can give the industry “is not to burden emerging technologies with complex requirements. Let them get out of the starting gate.”

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