Thank you very much, and good afternoon, Mr. Chairman and members of the committee. I am pleased to be before you today to speak on Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999.
Thank you for this opportunity to tell you why we believe that this bill and biofuels need your support.
I represent Canadian Bioenergy Corporation, a Vancouver-based company currently distributing biodiesel across Canada, with advanced planning for a large-scale biodiesel plant near Edmonton, Alberta. I'm also the president of the Alberta Biodiesel Association, which represents the full value chain of biodiesel interests in Alberta and whose members have the potential to produce a significant portion of Canada's biodiesel supply, based on currently available feedstocks and those non-food feedstocks we are researching and hope to utilize as soon as they are viable.
My statements reflect the experience of five years of working with the leaders of the biodiesel industry in Canada, starting at a time when this smart biofuel was entirely unknown and extending to the situation today where biodiesel is a household word and in use in large fleets across the country. It has accomplished this status because it works; because its benefits are immediate, scientifically sound, and verifiable; and because the farmers, the economy, and the environment benefit when it is used.
During my remarks I would like to make three things clear.
Number one, Bill C-33 is the most direct means by which the government can support the most positive development in Canadian agriculture in the last three decades. Bill C-33 will launch a new industry that will improve our environment, provide market stability in the traditionally challenged agricultural sector, and incent research and development for even more advanced biofuels.
Secondly, timing is critical. Financial markets are looking for certainty of policy in order to step in. They will take the risk, but they will not be reckless.
Third and last, biodiesel produced in Canada is an excellent fuel in terms of operability. It works in the full range of conditions in Canada and in terms of sustainability. It has a clear positive benefit for the environment, which I will describe further.
In the case of Canadian-made biodiesel, Bill C-33 will support a smart, advanced biofuel that reduces greenhouse gases in excess of 75% over those of diesel and improves dirty urban air, reducing respiratory illness in our large cities. It is renewable. Its use will extend available reserves of petroleum for future high-value purposes. It creates a new market. Its use will help smooth out the commodity-driven market swings that have held agricultural producers captive for decades. And it will add value to the agriculture sector. We will do more than just grow and export grains if we have a Canadian biodiesel industry.
Our society runs on diesel engines. Biodiesel is the only currently available and approved biofuel for the diesel engines that move us and the goods we consume. We live side by side with diesel exhaust every day: on transit and school buses, on downtown streets, on trains, in harbours, and increasingly in passenger cars. Biodiesel is an excellent climate change tool, but it is also an excellent local air quality tool.
Agricultural producers are huge supporters of biodiesel. I am told by the members of the canola growers advisory council that assists our company that canola growers know high prices will not last, and when prices do drop, producers will have a new market—biodiesel—to fall back on. This is significant in the context of the billions of dollars spent every year for Canadian agricultural support payments, federally and provincially. In the United States, the USDA has calculated savings in the billions of dollars diverted from historical price support programs as a direct result of federal government incentives for the biofuels industry.
Programs that support direct ownership in biofuels manufacture, such as the ecoagriculture biofuels capital initiative, also known as ecoABC, will ensure that Canadian farmers will be owners in the industry. Our company is very clear that producers must benefit from this industry, and we have structured our company so that they will.
Actions are required now to ensure market demand. Canada will be in good company as it takes steps to ensure renewable content in its fuel pools. OECD countries, particularly the European member states, have had clear biofuels policies for years and continue to expand them. Canada is late to the game but is fast catching up. But time is of the essence. This industry can stand on its own feet only when it has fully established the production capacity to be competitive internationally.
The private capital required to build the biofuels production plants needs clear, long-term commitment to the industry from federal and provincial governments. Without the assured market demand coming from the blend level provisions of the renewable fuel standard, biofuel production plants and supporting infrastructure will not be built in Canada. Delay in passing this legislation risks losing the tremendous biofuels opportunity, especially for the Canadian farmers who stand ready to participate in this new and important industry.
Two decisions must be made to ensure there is sufficient demand to establish this nascent industry. The first decision you can make immediately: pass Bill C-33 without delay. The absence of specific regulations to define how renewable content will be achieved should not delay the passage of this critical bill.
In a few months' time, we will need the second decision you and your colleagues can make, namely, to get biodiesel on the same timetable as that for ethanol—January 1, 2010. What do I mean by this? The original renewable fuel standard timetable developed in the late summer of 2006 pushed biodiesel implementation to as late as 2012. Our industry needs an implementation date of January 1, 2010. Delaying a biodiesel mandate until almost four years from now will, simply stated, kill or significantly delay new plant construction and would be a wholly unnecessary delay, defensible on neither technical nor policy grounds.
We expect in the next few months to successfully complete the most important requirement for a 2010 RFS date, namely a pilot test to confirm full operability of biodiesel in extreme cold weather. In many years and in many millions of kilometres of road tests in Canada, across Europe, and throughout the United States, biodiesel use, when produced and handled to strict quality specifications and guidelines, has established its efficacy and safety so that we can support with confidence the adoption of biodiesel in the Canadian fuel marketplace.
There are no reasons to delay the timetable another two years. British Columbia, where I live, will have a 5% renewable mandate in diesel fuel by 2010, and if B.C. can do a 5% mandated blend, the federal government can most certainly implement a 2% renewable mandate in diesel fuels by 2010. Loopholes, such as renewable credit carryovers, market out measures, or adoption delays, will only harm the establishment of the renewable fuels production industry in Canada. Credible sustained market access for renewable fuels must be observed by the regulatory regime adopted pursuant to Bill C-33.
Canadian biodiesel is a sustainable smart fuel. Biodiesel made from Canadian canola provides an immediate carbon reduction strategy. Canola biodiesel makes the superior cold weather biodiesel required by Canadian climatic conditions, and it is grown in surplus and in abundance in a full life cycle, sustainable manner on non-irrigated, established arable lands across the Canadian Prairies, and in lesser amounts in Ontario and Quebec.
I wish to address suggestions that biofuels can cause environmental degradation and that feedstock cultivation methods in biofuel production processes release more carbon than they displace, through their use as transportation fuel. Canada's largest anticipated biodiesel feedstock, canola, has proven it has significant benefits environmentally. It has greenhouse gas reductions in excess of 75%. It returns three units of energy for every single unit of fossil fuel used to produce it, and it will bring only minimal new land area under cultivation. High biodiversity ecosystems and established carbon sink lands will not be harmed from crop production.
Canadian biodiesel will also not cause food shortages or drive up food prices. Canada grows more than enough canola to fill the federal renewable fuel mandate set out by Bill C-33. In addition, the Canadian Renderers Association has indicated that Canadian-produced fats and rendered recycled greases are also available in substantial volumes for biodiesel production in Canada.
At a 70:30 ratio of canola to fats and oils in feedstocks supplies for biodiesel production in Canada, the federal government's recently announced requirement that 2% of the volume of diesel fuels used in Canada be renewable fuel will require approximately 900,000 tonnes of canola seed. This compares with the carryover of canola seed—that portion of the crop unsold at the end of the year—which is well under that for future years, and has been for the last three years.
With the U.S. and European legislative and regulatory measures, it be will be an important part of the regulatory process under Bill C-33 to ensure that biofuels adopted by the Canadian marketplace do not lead to unsustainable or harmful practices in biofuel production and use. The global biofuels industry is founded on the premise and promise of a better environmental fuel supply. Our biofuel regulations must ensure that biofuels credited toward to RFS requirements do not contribute to more greenhouse gases or air pollutants. We must protect biodiversity, sensitive wetlands, watersheds, and endangered species. The biodiesel produced in Canada will meet the most rigorous international sustainability standards for biofuels, and we must act to ensure that any imported biofuels are certified to meet Canada's environmental standard.
We encourage this committee to support this legislation.
Thank you for giving me this opportunity to appear this afternoon before the committee. I will be pleased to answer all of your questions.