Mr. Chairman and the committee members, I would like to thank you very much for the opportunity to discuss innovation in our energy sector, an important issue that is closely linked to biofuels development in Canada.
Domestic renewable fuel production strengthens our economy, protects the air we breathe, and plays a key role in securing and diversifying our energy future. It also speaks directly to the value of continued innovation in Canada, both on the science and technology frontier as well as in modernizing the market options for the products grown on Canadian farms.
CRFA members create a suite of innovative fuels including traditional corn-based ethanol; biodiesel from canola, spent cooking oils, and rendered animal residues; and the next generation of biofuels, notably feedstock agnostic cellulosic ethanol, which can include wood waste, forest biomass, and reclaimed municipal solid waste. At the same time, our members are continuing to improve energy efficiency in the production of first-generation ethanol and biodiesel. This includes developing new processes and value-added co-products to advance Canada’s place in the emerging bio-economy.
When looking at innovation in the energy sector, ours is the place where some of the most exciting work in the world is being done right now. We are an industry built by innovators. Our innovation started with the first-generation technology. There is no doubt that ecoENERGY for ethanol was a smashing success. The program allowed for the construction of several new facilities, and, depending on seasonality, we are now able to meet our mandate of 5% renewable content in all gasoline through domestic production. The government also established a 2% mandate for renewable content in diesel. These mandates are the best way to make sure that renewable fuels are part of our transition to Canada's role as a clean energy superpower, and ensure that the significant economic and environmental benefits accrue for Canadians where it matters most, right here at home.
Cornfields are, in essence, nature’s solar panels. They not only produce energy, but they can store it to be used when we need it. I have a board member who says that if someone invented corn today, they would be given a Nobel Prize for all the benefits that can be derived from it. In addition to the traditional uses for corn, our industry makes ethanol, which is derived from its starch. Ethanol is not only a fuel, but a natural octane enhancer that reduces GHGs and other harmful emissions, like benzene. The remainder, dried distillers' grains, is a protein-rich feed for Canada’s farmers.
As our industry has evolved with the advent of new technologies we are looking to do even more with our crops, including the production of biopolymers, nutraceuticals and other advanced foodstuffs, industrial plastics, and the next generation of biofuels like cellulosic ethanol. Programs like the government's AgriInnovation program, established under Growing Forward 2, are vital to this type of development.
Today, next-generation renewable fuel companies are establishing commercial plants that can produce biofuels from an array of new sources. They are developing cutting-edge technologies and first-of-kind projects that prove the future of fuel is, in many ways, already here.
Reflecting on the importance of these innovators, the CRFA created a new committee and classification of membership specifically for next-generation biofuel producers. You have already heard from one of these companies, Enerkem, earlier in the committee's work. Biofuel plants, like these next-generation pioneers, contribute almost $1.2 billion every year to our economy, and generate almost $240 million a year in federal and provincial tax revenues.
It goes without saying that in addition to the economic advantages, clean burning biofuels are proven to significantly reduce greenhouse gases and other emissions. Depending on the fuel in question, we can reduce our GHGs by up to 99% in the process when compared to traditional fossil fuels. The government’s transportation sector strategy for GHG emission reductions, of which biofuels are an integral part, cut carbon emissions by 4.2 megatonnes. This is equal to removing 1 million cars from the roads. These benefits are even greater with next-generation cellulosic ethanol, which requires less energy to produce than traditional gasoline, and can reduce GHGs by as much as 60%.
We also have next-generation biofuels made from non-recyclable and non-compostable municipal solid waste. These carry a dual benefit, in that they reduce GHGs while also recycling waste that would otherwise be dumped into the ground. It is a nice double hit: we reduce waste to landfill while simultaneously creating energy.
However, in order to reach and capitalize on this innovative potential, we must first plan for our success. As was the case with first-generation biofuels, the next generation of biofuels needs both capital and operating support in order to successfully commercialize their technologies. To do this, policy certainty and stability to attract private investment are crucial.
One such program is the NextGen Biofuels Fund administered by Sustainable Development Technology Canada. This important fund attracts private investment needed in the first years of operation.
As I submitted to the House of Commons Standing Committee on Finance, the CRFA supports preserving the current funding available—