Yes.
I was asked to present my views in front of your committee. I'm not accustomed to hearings of this nature. I am a scientist. I am a professor at the university, and I hold the chair in cellulosic ethanol and second-generation biofuels. I also have a large number of activities in the real world outside of the university with the companies I have helped to restructure and function in the area of biofuels and bioenergy.
Since my predecessor made an eloquent pitch for biodiesel, I will skip comments on biodiesel and focus on comments on cellulosic ethanol, preceded by some comments on grain ethanol.
I think it's important that we understand there is a large consensus in Canada, at both the federal and provincial levels, on the need to move towards mandated targets. In the case of ethanol, it's 5% ethanol in gasoline by 2010. Some provinces, like Quebec, say 2012. This is a small argument between the province and the federal level, but I think the focus is to move towards this 5% as quickly as we can. This represents a market, in the case of ethanol, of two billion litres per year in Canada, of which 767 million litres today are produced from grain ethanol. An added capacity of 680 million litres will also come from grain ethanol in 2008 and 2009.
In Quebec, we have GreenField Ethanol, a Varennes plant that produces a little over 120 million litres per year. However, in Quebec there have been voices raised against grain ethanol. The voices indicate that grain ethanol should be capped at some number out of these two billion litres a year and that the next generation of ethanol should come from cellulosic residues. That seems to be not only a Canadian choice, but also a choice in America and Brazil, where gas is going to be used more and more for second-generation ethanol.
And why this second-generation ethanol? It's because there are some constraints in extending the use of grain for carbohydrate for ethanol. We think it will be advantageous if the same companies that are retiring grain ethanol are moving towards cellulosic ethanol progressively to meet the mandates of both the federal and provincial governments.
Cellulosic ethanol is important. It is focused on forest residues, agricultural residues such as corn stover, and on urban residues, which are the residues from municipal solid waste that cannot be recycled. Even with appropriate sorting, there is a limit to what you can recycle.
While we consider cellulosic ethanol as a sector or subsector of the entire ethanol industry, we think these three types of feedstocks will be present in the production of ethanol. You might ask what the technologies are for this. Are they ready? Are they close to ready? Cellulosic ethanol can be produced in two ways. Either you go into the production of sugars and fermentation, which is analogous to the grain ethanol, or you use all the carbon by gasification of the feedstock, producing a uniform gas. This gas is converted by catalytic synthesis into ethanol, by the way. We can also convert it into diesel, if we so wish.
Both routes are appropriate, and both routes are being investigated. Certainly the gasification route is something that is proven, because ethanol and hydrocarbons have been produced in South Africa for over one generation, using coal as raw material and gasification as the technology to convert this coal into a uniform SNG gas.
What we see happening—and I think the federal system has to understand it—is that the options for ethanol are grain and cellulosic. For the cellulosic, the most advanced systems are those that are looking into gasification, which I think can be implemented today. Certainly in the United States and Canada, we have companies that are moving in this direction.
So I'm looking very optimistically to the next few years, because I think we will be able--not necessarily by 2010 but certainly by 2012--to produce whatever is necessary to meet this 5% mandate at a cost that begins to make sense. The cellulosic ethanol produced by gasification will have a cost target that is very similar to today's ethanol from grain. Cellulosic ethanol produced by hydrolysis and fermentation may be a little more expensive, because they use more expensive raw materials than the first one does.
So I think we are committed to this. I see the market, and not only the technology market but the financial market. I think the bills that the federal government is ready to pass will be essential, will be good, and will be appropriate to move Canada a step forward into this international course for biofuels, and I think we are very well positioned to be in the driver's seat, as you say in the English language.
I do not know whether you have any questions to ask. That is the end of my remarks. I may have used less time than expected or than you would have wished, so I will be pleased to answer your questions.