Ontario Greener Diesel Mandate Fails Producers

WELLAND, April 8, 2014 /CNW/ - The Province of Ontario issued a new regulation for Greener Biodiesel in the Province on April 1, 2014 and, after a stakeholder review meeting April 4, Ontario Biodiesel Producers' (OBPA) worst fears were confirmed.

Biodiesel industry stakeholders anticipated a 2% volumetric mandate, increasing to 4% by 2017, a reasonable expectation given the federal Biodiesel mandate is currently 2% and Manitoba, Saskatchewan, Alberta, and B.C. also have similar mandates.  Further, a true 2% Biodiesel mandate would generate demand for 240 million litres of Biodiesel in Ontario – roughly the current operating production capacity – and even more important, such a mandate would have reduced carbon emissions in Ontario by almost 240 thousand tonnes in just the first year.

The mandate announced, however, yields a compliance volume that is a fraction of the current production levels and, as a result, it may significantly reduce Biodiesel use and production.

By developing its own system of calculations for Greenhouse Gas (GHG) emissions for blended diesel, the Ontario government has created a formula that reduces the suggested 2% mandate to a true effect of less than a quarter of that volume.  It is a truly disingenuous use of numbers.

"The announcement is a disappointment to the majority of Ontario Biodiesel producers as we expected a true volume based mandate," says Paul Grenier, Executive Director of the Ontario Biodiesel Producers Association (OBPA). "The Province of Ontario lost an opportunity to be a national leader in the renewable fuels policy with this regulation by using their own version of a GHG calculating method with averaging factors and not using volumetric targets, as has been the practice of other jurisdictions adopting a biodiesel blending mandate."  The result is Ontario which has the highest volume of on road diesel use in the country has a mandate for Biodiesel that will be the lowest in the country.  This is a missed opportunity to grow an agricultural based biodiesel industry in the Province as well as to reduce carbon emissions and improve health for Ontarians.

"Any regulation that reduces emissions produced by diesel-powered vehicles is good news for people with asthma, respiratory allergies and other lung illnesses," said Asthma Society of Canada President  & CEO Robert Oliphant.  He expressed disappointment, however, that the Government of Ontario has been less ambitious in this effort than originally planned.  "There is a direct link between asthma exacerbations, hospital admissions, and untimely deaths and dirty fuels.  Speeding up the process of blending more renewable biofuel would lead to a healthier Ontario," he added.

Ontario Biodiesel Producers Association (OBPA) has difficulty understanding the support given to this regulation by other stakeholder groups from Agriculture and the Canadian Renewable Fuels Association (CRFA). This regulation does little for Ontario Biodiesel producers and does not provide any significant increase in demand for Ontario produced grain oils to be used as feedstocks.  "The regulation that was announced is seen to favor the demands of oil producers, fuel blenders, and truckers in the province more than the biodiesel producers, environmentalists, and farmers," says Michel Laporte of Methes.  "It is understandable that the CRFA, with only one member plant producing biodiesel in Ontario and also oil companies as part of its membership, would support such a weak regulation," added Laporte.

Ontario Biodiesel producers will struggle to survive under this reduced volume mandate, and must now find alternative markets for their Biodiesel. Mr. Grenier added "We will continue to work with the government and hope to protect and expand the jobs and investment in the Ontario Biodiesel production industry."

OBPA members have invested over $80 million in plant and equipment to produce Biodiesel in the Province.  OBPA members represent 75% of the total Biodiesel production in Ontario and include - Methes Energies Canada Inc. located in Mississauga and Sombra (55 million liters/year), Great Lakes Biodiesel (GLB) in Welland (170 million liters/year), and Noroxel Energy Limited in Springfield,  (5 million liters/year).

SOURCE: Ontario Biodiesel Producers Association

Paul Grenier, Executive Director, Ontario Biodiesel Producers Association, [phone], [phone] (cell), [email protected]; Noah Farber, Director of Communications and Government Relations, Executive Director, National Asthma Patient Alliance (NAPA) Asthma Society of Canada, 416-787-4050 x100, [email protected]