Thank you, Madam Chair, and dear members of the committee for the invitation to speak to this committee.
I'm Jocelyn Doucet, a chemical engineer and the CEO of Pyrowave. We're a pioneer and leader in the electrification of chemical processes.
What does that mean? I'm sure you've heard about the electrification of vehicles, but probably less about the electrification of industrial processes. It means that we've developed the most advanced microwave technology using electricity for the production of low-carbon chemicals.
Our first application turns polystyrene waste into its basic constituent, namely styrene monomer, a global commodity with a market of over 30 million tonnes a year used in a variety of different products all over the world. What we do by decomposing plastics into their smaller constituents brings a lot of advantages. It increases the value by turning waste with no value in the market into a useful commodity with a high value and large market.
For example, styrene monomer can be used to make polystyrene, a very popular plastic, but also ABS found in your computers and SBR found in your tires. We recently announced a global partnership with Michelin, which has invested in Pyrowave and is also adopting our technology in Europe.
They will use our technology to move to the 21st century and make renewable styrene monomer from waste using our technology, which is more efficient and cleaner. The output products are identical to virgin...and that will replace fossil-based styrene in the production of synthetic rubber found in tires—all of that with the objective of being 40% sustainable by 2030 and 100% sustainable by 2050.
We also have multiple projects starting in Asia, and this certainly presents a huge opportunity for us. It also demonstrates the world-wide demand for Canadian-themed technologies.
Canada is a leader in clean technology development. Ten years ago, I personally co-founded Pyrowave, a company specializing in what we now call the circular economy of plastics. However, we have much work to do to become a leader in scaling up and exporting technologies worldwide. Having walked the path myself, I'm aware that my experience is unique.
Today, I'd like to share my vision for the gaps that will require special attention if Canada chooses to accelerate the export of Canadian clean technologies as we rebuild the economy after COVID-19.
Here are my three points, and I'll expand further on them.
First, we need to help Canadian clean-tech companies access large capital markets; second, we need to adopt carbon pricing to truly differentiate low-carbon solutions from fossil-based solutions; and third, we need to adopt policies and trade rules that will further enforce the carbon differentiation of Canadian clean technologies and create demand for them abroad.
Regarding investment opportunities, I think Canada already has an impressive portfolio of clean technologies made possible by great programs like Sustainable Development Technology Canada, from which we received very early support.
Past the demonstration stage comes commercialization, which requires a massive amount of capital and access to various investment networks. In order for Canadian companies to export and win on global markets, it's essential to secure financial strength. For that, I invite the government to develop programs to invest in clean tech to stimulate and attract investments, as well as key players into the Canadian innovation ecosystem.
In Europe, for example, clean-tech companies have strong support from the EU through grants, and various mechanisms of financing that attract private investments. If Canada wants to lead this new sector and be able to challenge these competitors, we need to bring elements to attract capital and strategic partners for Canadian companies.
Regarding carbon pricing, I think another element is putting in place a level playing field, so that low-carbon clean tech can truly exhibit its differentiation element at the financial level. For example, in 2015, the IMF issued a report that quantified the total subsidies to the fossil fuel industry. Its methodology was to report post-tax subsidies. These subsidies include pre-tax subsidies, which occur when people and businesses pay less than it costs to supply the energy. To that are added other amounts reflecting damages to the environment and health caused by the use of that energy. In other words, it represents the value that is destroyed or not captured by using this form of energy.
In that study, if we divide the total amount of subsidies by the amount of global emissions, we obtain a price of about $150 per tonne. If I use Pyrowave as an example, the difference in carbon emissions between fossil and recycled styrene monomer is basically anywhere between two to four tonnes of CO2 per tonne of styrene. In other words, by switching to recycled styrene, we reduce emissions by 2 to 4 tonnes of CO2 per tonne. By applying such carbon pricing, switching from fossil to recycled would create a cost differentiation of anywhere between $300 and $600 per tonne.
When you're a global packaging company and you buy 100,000 tonnes a year of styrene, that means you have savings of anywhere between $30 million and $60 million a year just by switching from fossil to recycled. The low-carbon differentiation element is therefore captured in the financials and justifies a switch to low-carbon products and therefore helps accelerate adoption of clean technologies.
An important point here is that I don't think carbon price should be used to finance clean tech because it would mean that you need fossil fuels to power clean technologies and therefore we're doing all of this for nothing. I think that carbon pricing is a mechanism by which clean tech can reflect its true differentiation at the financial level and drive corporate decisions toward low-carbon solutions. In other words, carbon pricing shows how much value is destroyed by not changing to low-carbon solutions.
My third point is related to policies and tariffs. Policies and tariffs can help Canadian clean technologies deploy internationally. Governments can use tariffs to benefit specific industries. It's common to see tariffs being applied when importing countries feel that some industries are unfairly subsidized. If we recognize that fossil-based products are subsidized and because their price does not represent the true cost of the good, we can make an argument that importing such goods creates an unfair advantage against products made with low-carbon technologies.
This concept is called “carbon border tax” and is being discussed right now in Europe and the U.S. It basically imposes additional costs on high-carbon imports that come from countries with inadequate climate rules. At the same time, suppliers at home can get carbon-related rebates to help boost their exports. I believe such policies like tariffs and minimum recycled contents, for example, could help companies currently using or developing clean technologies by creating opportunities for them abroad and here.
In conclusion, my vision of the problem is coloured by the experience we had navigating the ecosystem of clean technology and its positive impacts on our economic growth and job creation. Clean technologies are progress. They represent the evolution of century-old technologies. They're what the high-speed train is to the good old steam train. Who wouldn't say yes to a high-speed train today?
While we have seen tremendous progress in electronics, transportation, computers and software, there is a lot to do with industrial manufacturing that accounts for 45% of global emissions. As I said, we need to help clean technologies access a large capital market. We need to adopt carbon pricing. We need to adopt policies and trade rules that will further enforce the carbon differentiation of Canadian clean technologies here and abroad. This will create the basis of a strong sustainable economy by creating high-quality jobs here and retaining long-term value.
We've seen how rapidly this government invested in solving large problems like COVID-19. Canada can certainly support the delivery of clean technologies around the world and lead this new clean economy.
Thanks for your time and we look forward to questions.