Evidence of meeting #28 for Environment and Sustainable Development in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
What's your revenue source? Does the City of Edmonton pay you for every tonne of stuff you take away from them?
Senior Vice-President, Government Affairs and Communications, Enerkem
The business model is a biorefinery. We sell value-added products, ethanol or biomethanol.
Senior Vice-President, Government Affairs and Communications, Enerkem
Because we're taking municipal solid waste in this case, we get a tipping fee from the municipality. Usually municipalities have to pay a tipping fee to landfills. We're providing them with a competitive value proposition. Instead of landfilling, they actually pay us and we then invest, create those jobs—
Liberal
John McKay Liberal Scarborough—Guildwood, ON
You're comparing apples to apples. Edmonton is driving a truck down the road, dumping it in a dump; they pay you the same thing to dump it at your place. Okay.
Senior Vice-President, Government Affairs and Communications, Enerkem
It's very similar—
Liberal
John McKay Liberal Scarborough—Guildwood, ON
I see. Then you have a stream of revenue that comes out of the products that you get out of that.
Senior Vice-President, Government Affairs and Communications, Enerkem
Exactly.
It's really a biorefinery using waste. We have a competitive advantage over our competitors, who have to pay for the feedstock—
President, Canadian Renewable Fuels Association
But understand, if Edmonton wasn't doing this with Enerkem, they would be filling up landfill number one and then landfill number two, and on and on.
Senior Vice-President, Government Affairs and Communications, Enerkem
And paying a tipping fee.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
I want to tease that out a bit. It's not just the immediate tipping fee; it's that you have to find something else down the road.
What I don't understand is why Toronto, which is the worst poster child of all, is running stuff to Michigan when they could be paying you the same thing.
Is it that the tipping fee for Michigan is so cheap that you can't compete?
Senior Vice-President, Government Affairs and Communications, Enerkem
I think municipalities are all going through their strategic planning and the next steps for them. They have already had to deal with how to optimize their recycling, what they do with food waste. Many of them are looking at the next steps.
The City of Toronto is doing the same. They are now going through that strategy and vision for the next wave of solutions to increase their waste diversion rates. Toronto is doing that as we speak.
Many municipalities are now looking at what is beyond their recycling and composting or biomethanization activities. That's why to date they have not had that opportunity, but many of them are looking at solutions—
Liberal
John McKay Liberal Scarborough—Guildwood, ON
It's bad news for everybody if the tipping fee is too low.
Senior Vice-President, Government Affairs and Communications, Enerkem
Yes, but that is not the case; it's quite high.
On average, based on the Waste Business Journal, in the U.S., for example, it's about $45, and that does not include—if I remember it well—the transportation costs. In many municipalities, when you look at the total cost, it's above $80 or $100 per tonne.
Conservative
The Chair Conservative Harold Albrecht
Finally, Mr. McKay, we may have an opportunity to come back.
We're moving along very well. Thanks for your cooperation.
Ms. Leslie, you have five minutes.
Megan Leslie NDP Halifax, NS
Thank you.
Hi, everyone. I'm excited to ask questions.
Mr. Thurlow, I'm going to start with you, and then hopefully I'll have some time to chat with the folks at CELA.
I'm looking at your recommendations here. They're well laid out. I had some of the same issues as my colleague around value for carbon versus price on carbon, but I think we're speaking about the same language.
I want to tease out your third recommendation a bit, because you talk about putting renewable diesel into other sectors, such as marine, rail, mining, and power engines. You also talk about upping the percentage from 2% to 5%. That is clearly something that fits under federal jurisdiction. It is also clearly something that's easy, I think, because the 2% already exists, so it's just about upping a number.
I guess I'm at a loss as to why we're not doing it. You don't need to answer that question, but is there something about this that I'm missing that would be difficult? Or is there some kind of barrier here that I'm not seeing?
President, Canadian Renewable Fuels Association
First of all, thank you for the question.
Other jurisdictions are starting to pull away from Canada as it relates to what renewable content is required in the diesel pool. Starting on July 1 in Minnesota, in the summer months they'll be blending at 10%.
President, Canadian Renewable Fuels Association
Yes, at 10%. Now, that has a lot to do with the soybean industry in Minnesota, but the reality is that today's automotive vehicles that are taking diesel fuel can run in the summer months on higher-content blends.
In the winter, Minnesota runs at 5% all the time and has never had an issue with operability. That is in a report to the governor and the legislature on an annual basis. It involves the petroleum sector, the trucking industry, and the agricultural sector. They put in a joint report to talk about operability issues.
This morning, we put out a release with the Asthma Society of Canada. The Asthma Society joined with us to call for the 5% increase for two basic reasons. On the asthma side of the equation, obviously, the removal of particulates from the environment is a good thing for human health, period.
Secondly, we now have more production in Canada than we have mandated demand under the regulations. It's actually the exact opposite issue to what we have with ethanol, where our producers now have to go and find a new market for their product. I think that product should be upgraded at home. I think that product should be consumed at home. I would also like to point out, given the trouble we've had this winter on the rails as it relates to moving farm and agricultural products, that if we had a higher mandate in Canada, that canola and that soy wouldn't have had to go anywhere. It could have been upgraded and consumed right here in the country.
President, Canadian Renewable Fuels Association
Home heating oil has been exempted from the federal renewable fuel standard—
NDP
President, Canadian Renewable Fuels Association
We vociferously disagreed with that approach. The City of New York has a 3% home heating requirement for renewable content, and their heating oil market in the City of New York is bigger than Canada's, period.
We don't agree with a lot of the underpinning assumptions that went into the decision to remove home heating oil from the market, but ultimately it is a very small percentage. It's one of those things where we hang our head and say that we believe the government made a mistake, but let's move on and increase the total content requirement for the renewable diesel requirement.
I would point out, however, that even though the home heating oil volume is now exempted from the renewable fuels regulations, oil and gas companies absolutely are using home heating oil as the way to input more renewable content into the diesel requirement.