Canadian Manufacturing

New regulations leave Ontario biodiesel producers in peril: association

Producers in province "will struggle to survive" after new mandate adopted by provincial government

WELLAND, Ont.—Biodiesel producers in Ontario “will struggle to survive” after new regulations aimed at curbing emissions were introduced by the province this month, according to an industry association.

The rules, which went into effect April 1, call for regular diesel sold in Ontario to be blended with a minimum of two per cent biodiesel—fuel made from feedstocks like canola and soy oils, animal fats and recycled cooking oils.

Some estimates peg the amount of biodiesel needed to meet the new requirement at as much as 240 million litres.

But according to the Ontario Biodiesel Producers Association (OBPA), the provincial mandate could actually result in the need for less than 60 million litres thanks to a “disingenuous use of numbers” that allows diesel fuel with higher emission mitigation performances to cut back on how much biofuel is mixed in.

While the regulations stipulate that at least two per cent biodiesel be blended into petroleum diesel, provincial calculations that reward fuels that reduce greenhouse gas (GHG) emissions by the largest margin could mean a blend volume as low as 0.6 per cent, according the association.

“It’s effectively discounted by greenhouse gas emission achievements,” OBPA executive director Paul Grenier said about the calculations. “If you can achieve greater (reductions) you don’t have to buy as much biofuel.”

Unlike the federal volumetric mandate—and similar regulations in other provinces, including Manitoba, Saskatchewan, Alberta and British Columbia—that requires a true two per cent biodiesel blend regardless of GHG reduction results, the rules in Ontario do little more than drive profits, Grenier said.

“We were hoping the government would adopt the same volumetric mandate that the federal government announced in 2008,” he said. “All the provinces west of Ontario have adopted (a similar) mandate.”

Failing to do so means Ontario, which has the highest volume of on-road diesel use in Canada, has a mandate for biodiesel that is the lowest in the country.

And that means lower requirements for biodiesel in the province.

“The companies I represent are going to struggle,” Grenier said. “(They’re) going to struggle to sell product and keep people employed.”

With a production capacity of about 250 million litres, the three OBPA member companies—Methes Energies Canada Inc., Great Lakes Biodiesel Inc. and Noroxel Energy Ltd.—would easily meet a true two per cent biodiesel mandate, according to Grenier.

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