We already have a free-trade agreement. As for biofuels, the goods move very easily from country to country.
Perhaps what I was talking about did not fall within the agreement. Now that we have solved the problem of access to this market, there is an imbalance in the policies on new biofuels at three levels.
The United States has specific legislation on cellulosic biofuel set out in the renewable fuel standard program. Thanks to the Conservative government, we have federal regulations that established the federal standard of a minimum of 5% ethanol in gasoline. However, we have not established a distinction between the new generations and conventional biofuels. A change is occurring elsewhere in the world toward new technologies that use different raw materials, namely, forestry and agriculture residues and waste materials, like we do. So there is an imbalance because we have an integrated biofuel market, but with different policies.
The second level has to do with tax incentives. In the United States, $1.01 is given per gallon of cellulosic biofuel produced. So we are seeing that investments are increasingly going to the United States because there are these incentives to present this capital and to build an infrastructure to produce cellulosic biofuel.
At the third level, they have a lot of loan guarantee schemes to stimulate these capital investments by the private sector. What we're talking about here are industrial innovations and large factories.
Let's take the example of a factory like Enerkem in Edmonton. That's our factory. We're talking about a private investment of over $100 million. These factors can be profitable, but they require a major capital investment. When we talk about new technologies, obviously, it's the stage we call the “valley of death”. They reach the point of being ready to be put on the market, and the first factories are always more difficult to finance.
In this sense, perhaps it would be good to work with the free-trade agreement to ensure that there is no imbalance. That's really the holistic approach that I was presenting.