You know you've been here too long when you can hear echoes.
Greetings, everyone. It's great to be back here. It's always a comfort to come before committee. We all spent a good many hours chatting about issues together over the years, and it's my pleasure to be back here.
As you know, our government recently introduced the renewable fuels bill and its proposed amendments to the Canadian Environmental Protection Act , or CEPA, as it's more widely known. These amendments will provide the additional authorities that the government requires to make efficient national regulations requiring renewable content in Canadian fuel.
In December 2006 the government began to move Canada towards smarter consumption by announcing our intention to require a 5% average renewable content in gasoline by 2010. We also signaled our intent at that time to develop a similar requirement of 2% renewable content in diesel fuel and heating oil by 2012. Meeting these requirements will make a real difference for our environment. Hitting these targets will be the equivalent to taking almost one million cars off our roads.
Over the past seven years Natural Resources Canada has developed and maintained a model named GHGenius. GHGenius estimates life cycle energy use and the GHG emissions from both conventional and alternative fuels. This model is the only one of its kind in Canada and only one of several such models throughout the world. Using this model, we estimate that under typical Canadian conditions corn-based ethanol can reduce life cycle energy use and GHG emissions by around 40% compared to crude-oil based gasolines. Beyond these environmental benefits, this requirement will help stimulate the growth of the renewable fuels industry in this country. That means economic benefits for producers and rural communities across Canada.
Close to three billion litres of renewable fuels will be needed annually to meet the requirements of these regulations. Supplying that demand will be a big job for the biofuel industry. Canadian biofuel producers are already producing more than one billion litres per year and we're well on our way to meeting our production targets. This kind of expansion will represent a tremendous economic opportunity for Canada's 61,000 grains and oilseeds producers. In fact, all of this presents an exciting new market for Canadian producers. Biofuels production is helping farmers grow their businesses while creating new jobs, especially in rural Canada.
Our government is taking strong action on biofuels in very concrete ways. We've announced funding for the ecoAgriculture biofuels capital initiative to encourage producer investment in biofuels and their production facilities. We have recently announced the first two contribution agreements under this program--a new biodiesel plant in Alberta, and an ethanol plant in Saskatchewan at Unity. We expect to sign multi-million dollar agreements with several other plants, with farmer participation in the very new future, as interest in this funding has been very high.
We have invested in the biofuels opportunities for producers initiative, or BOPI. This initiative supports more than 120 biofuels-related projects across Canada with farmer representation. These new plants are great news for our producers. They provide a new market source for their wheat, corn, and canola and potentially other crops. Having plants in our rural communities will lower transportation costs that too often cut the knees out of farmers' profits.
At the same time we're looking ahead to the next generation of biofuels development, such as wheat straw, corn stover, wood residue, and switchgrass. In July Prime Minister Harper announced ecoENERGY for Biofuels, an incentive program for producers of renewable alternatives to gasoline and diesel fuel. In total, we're investing $2.2 billion over nine years in that biofuels development. Recently we officially launched Canada's largest cold-weather demonstration of renewable diesel. The Alberta renewable diesel demonstration involves over 60 trucks of various sizes operating throughout Alberta where the climate, as you know, poses some of the most extreme challenges to renewable diesel use. The demonstration will provide hands-on cold-weather experience for fuel blenders, distributors, long-haul trucking fleets, and of course, the drivers who have to keep them running.
The Canadian and Alberta governments are investing $2.6 million in that particular project. Road testing began in late 2007 and will continue until October 2008.
Mr. Chair, Bill C-33 is essential to move forward on implementing our commitment to renewable fuels. While Bill C-33 itself does not impose any renewable fuel requirements, the amendments we are putting forward in it will ensure this government has the necessary tools to develop an effective and workable national regulation requiring the use of these renewable fuels. The authorities we are seeking include: authority to regulate at point of fuel blending; authority to track exports; and exemption for small-volume producers or importers. By doing so we can maximize the benefits that Canadians enjoy from the use of renewable fuels in this country.
Our government understands Canadians' concerns about climate change. We know that using renewable fuels means less greenhouse gas emission. When it comes to biofuels, the facts are clear. A strong biofuel sector will contribute to a stronger foundation for farmers, lead to better usage of agricultural products from beginning to end, and protect our environment for future generations.
This investment in biofuels is a triple win: it's good for producers, it's good for the environment, and it's good for the economy.
Thank you, Mr. Chair.