Joint Canadian push for renewable fuel

Old enemies have become new allies in a campaign to persuade the Canadian government to ensure that 5 percent of all gasoline and diesel fuel should originate from renewable sources by 2010.

The Canadian Petroleum Products Institute and the Canadian Renewable Fuels Association have joined forces to draft a plan for the future of renewable fuels.

They call on governments to ensure that consumers and Canadian producers of both renewable and standard fuel products can compete on the same footing as their U.S. peers. Companies making ethanol and bio-diesel fuels are putting pressure on the federal government to deliver on its campaign promise to create an assured market for their products.

The joint plan calls for:

• A national mandate of 5 percent renewable content in gasoline by 2010 and 2 percent renewable in home heating fuel by 2010 at the earliest and no later than 2012;

• More federal money for research;

• Taxes that are competitive with the U.S. and other jurisdictions; and

• Fair rules for the creation of alternative fuels.

Renewable fuels Executive Director Kory Tenecycke said that with gasoline now at C$1 a liter and higher in Canada there is an economic case to be made for renewable fuels.

Although manufacturers expect to triple the output of ethanol by summer 2007 it will require another 1.4 billion liters a year to achieve the 5 percent goal which was agreed to in late May by federal and provincial cabinet ministers.

The federal government has already provided incentives to assist companies such as Suncor Energy, Husky Energy and Commercial Alcohols contribute to the three-fold increase.

Husky is on the verge of opening its second ethanol production plant in Western Canada, while expanding its existing plant. The two facilities will eventually produce 260 million liters.

But the government has been warned by farmers that they will need economic support to grow wheat suitable for ethanol or lose out to U.S. farmers, who receive subsidies.

—Gary Park