Thank you very much, and good morning, everyone.
If you want to get out our brief, it's in the briefs that have been circulated to you. Actually, we have revised this and added some references, so a new brief will be coming to you.
Basically, REAP Canada is a research and educational organization that's been working since 1986 on sustainable agriculture and, more specifically, on biofuel development in Canada since 1991. We released the most recent report on greenhouse gas mitigation from biofuels in Canada last month, and that brief is called “Analyzing Ontario Biofuel Options: Greenhouse Gas Mitigation Efficiency and Costs”. There were seven authors on that report, and we would like the committee to review it in detail to better understand the biofuel issues.
There are two things that make a good biofuel: that it's very efficient at displacing greenhouse gases, and that's it's cost-effective for the Canadian taxpayer.
If you look at figure 1 in my brief, you'll see the life-cycle greenhouse gas emissions for production of bioenergy fuel technology by energy-use sector. We compared three sectors: the transport sector, the green power sector, and the green heat sector. You'll see that in terms of greenhouse gas emissions, the heating sector and the green power sector are more efficient at reducing greenhouse gases. They have lower emissions.
If you go to figure 2, you'll see that on a percentage basis. You'll see that corn ethanol, according to our report, is 21% efficiency in terms of a greenhouse gas offset and biodiesel is about 50% to 58%.
In Europe, they've created a biofuels standard where the EU must show that they generate at least 35% less greenhouse gas than gasoline and cannot come from land with a recognized high biodiversity value. So corn ethanol would not be eligible in the European Community, whereas if you look at green power and green heat, you have offsets of 80% to 90%.
So what makes a good biofuel? A very good offset makes a good biofuel, and the second criterion is its cost.
If you look at figure 3, you will see we've done the pricing. We examined the federal and provincial subsidies available in the province of Ontario, and we looked at the offset efficiency of those fuels. What we saw was that biodiesel is about $100 a tonne in terms of mitigation costs and corn ethanol in the province of Ontario, with current incentives, is $375 a tonne.
If you look on the right side of that chart, you'll see there are options available for about $50 a tonne in quite a number of technologies, including one we've worked on, which is growing grass, pelletizing it, and using it as a thermal fuel offset.
If we scan through to page 9 of the brief, in table 1 we see our fuel analysis in terms of net greenhouse gas offset of renewable fuel. How can we use an acre or a hectare of farmland to offset greenhouse gases efficiently? We've shown the offsets here: about 900 kilograms from soybean biodiesel per hectare; corn ethanol, 1,500 kilos; cellulosic ethanol, 4,700 kilos; and switchgrass pellets, 13.5 tonnes per hectare, eight to ten times more efficient than corn ethanol as a strategy.
We're inviting anyone in the Canadian scientific community to challenge these numbers. We're very confident in these numbers, and we don't understand why the Canadian government isn't embracing more efficient offset technologies.
In our recommendations for the committee, we have three major concerns about this legislation. The first is that it won't appreciably reduce greenhouse gas emissions. We've been told that 4 million tonnes of offsets could be expected. If you run the numbers from our recent report, we find the numbers only come up to 2.1 million tonnes—almost half of what the government is saying to Canadians.
Secondly, we think a serious land conversion problem is going to occur, because Canada doesn't have the land base to grow that fuel. We're going to have to either import it or turn our grasslands into arable croplands, and that's going to release large quantities of greenhouse gases. Several scientific reports came out last month, and they talked about 50- to 130-year paybacks for that land. So this is not going to reduce greenhouse gas levels at the levels that are proposed. We do not believe that's going to happen.
Thirdly, it's not a made-in-Canada solution, because Canada largely will import the corn to make this ethanol. And in terms of biodiesel, it's just too expensive. Canola biodiesel today is $1,000 a tonne, and it's $1,300 a tonne for soybean oil. These do not make economical biofuels. The incentives that are available today for the federal government are not going to make it in terms of the 2% blend.
The legislation does not demonstrate fiscal responsibility. Carbon dioxide offsets, as you saw from the charts on corn ethanol, are in the order of six to ten times more expensive than other options.
We recommend three things that the government should do. The government should implement results-based management strategies throughout its research and incentive programs to ensure that the desired outcomes of greenhouse gas mitigation and rural development are achieved. We think the environment can be a winner, farmers can be a winner, and taxpayers can be a winner if we develop effective policy, but we don't have an effective policy framework today to address the carbon dioxide problem.
The second point is the government needs to embrace perennial energy crops and abandon the use of annual crops as biofuels. It should be recognized that there's a limited surplus arable land base in Canada, and the main opportunity for biofuels is from our perennial landscapes. Use our farmland that's marginal and grow biofuels like switchgrass for pellets.
The third point is that the government needs to embrace parity in terms of the way it's applying incentives to the biofuel sector. The Canadian government should not pick winners. There's a joke that governments pick winners but losers pick governments. Really, what we need to do is embrace carbon dioxide pricing as a means to create an effective strategy to reduce carbon dioxide. We would like to see Agriculture Canada expand its research in the use of whole-plant lignocellulosic perennial crops. Currently there's a deficiency in research funds in this area, and we would really like to see that strengthened.
Thanks very much.