Good afternoon.
Thank you very much for inviting me.
I am pleased to be here to speak to you about a topic which is at the heart of Enerkem's mission.
Enerkem is a Canadian clean tech private company operating in Quebec and Alberta. The company uses its proprietary clean technology to convert non-recyclable and non-compostable municipal solid waste and other residues into low-carbon transportation fuels and green chemicals such as ethanol and methanol.
We currently operate two plants in Canada: an innovation centre in Westbury, Quebec, and the world's first commercial-scale waste biofuels and chemicals plant in Edmonton, Alberta.
Our next plant will be located in Varennes, close to Montreal. We will be using construction wood residues and other residual urban matter to produce biofuels. We are also working on projects to export our technology throughout the world, in partnership with industrial groups.
Enerkem designs and delivers biorefineries with a standardized modular build process, which means that every Enerkem facility brings growth to the Canadian manufacturing sector.
Enerkem has raised more than $400 million in capital in order to develop and bring its industrial revolutionary technology from the lab to commercial scale, and to prepare the company for commercial growth. The majority of the financing comes from private sources. Enerkem has generated significant intellectual property with 96 patents for its breakthrough technology and process. The company currently employs 200 people.
Clean tech companies like Enerkem generate economic benefits while solving environmental issues. We create value-added products out of waste and residue. We therefore replace the use of fossil sources with the use of waste for the production of fuels and chemicals. We provide synergy with our natural resources sector by offering the possibility of using forest residue, residue from pulp and paper processing, and residue from the agricultural sector. Many of the skills needed to build and operate our biorefineries are similar to those of the petrochemical industry, as well as those of the pulp and paper industry.
We produce clean energy for transportation. Each Enerkem facility can produce enough biofuels to fuel 400,000 cars annually on a 5% ethanol blend. By displacing gasoline and avoiding waste landfilling, Enerkem's facilities can reduce greenhouse gas emissions by over 60%.
We produce renewable chemicals to make our everyday products greener. Chemicals are used in many everyday products—textiles, plastics, paint, etc.—and today we can make those chemicals using waste, instead of only limiting ourselves to producing them from fossil sources.
We also create high-quality jobs. Enerkem started as a family business and grew out of the labs of the Université de Sherbrooke. We now employ 200 people, as I said. Nearly 70 of our people are engineers, and many others hold professional positions. Many young families benefit from Enerkem's jobs.
In addition, each Enerkem facility generates 600 direct and indirect jobs during construction and, once in operation, generates 150 direct and indirect jobs.
Our facilities stimulate regional economies. Based on an independent study, they increase spending across Canada by $200 million during construction, and $65 million per year during operation.
We also open the door to more high-tech exports, thereby increasing and diversifying Canada's export activities. Enerkem is currently developing a project in the Netherlands with industrial partners such as the world leader, AkzoNobel, and Air Liquide. This will generate significant export revenue from technology licensing, engineering services, and the sale of Canadian-made, specialized equipment, as we have built our modular manufacturing infrastructure here in Canada.
A research project on clean innovation undertaken by the Smart Prosperity Institute found that Canada does fairly well at R and D but poorly at the commercialization and deployment of clean innovation, which are the stages where most wealth and jobs are created.
I'd like to present some of the recommendations for policy mix that are required to fix this. In our opinion, the priority should be put on growth capital support for companies that are ready to develop commercial-scale clean tech projects. The deployment of these innovations requires a long development cycle compared to that for other high tech sectors and therefore more capital.
Enerkem has reached a stage in its growth trajectory in which there is a void of available private capital in Canada. To compound the problem, public financing programs are not accessible given that Enerkem is considered to be a late-stage start-up.
Second, another key ingredient is market access. For Enerkem, Canada's renewable fuel standard, RFS, and the clean fuel standard currently in development are important for any enabling access to the fuels market and to stimulate private investment as they send the right market signal. To strengthen these policies, we recommend that the RFS be increased to 10% ethanol in the gasoline fuel pool up from 5% today as we already blend an average of 7%. So we're already over-compliant.
A third recommendation is about eco fiscal measures that further help attract private capital. For example, exempting cellulosic biofuels from the federal fuel excise tax, an exemption that is already applied to natural gas and propane used in transportation and that was used in the past to encourage uptake of first-generation ethanol, would drive more private investment into biofuels produced from forest residues, agriculture waste, and municipal solid waste.
Timing is of the essence. Canada's clean tech advantage is unique but Canada is falling behind in this global growth sector. If urgent action is not taken, Canadians will forfeit the jobs and economic growth that should be generated by our country's clean tech advantage. In fact, research by Analytica Advisors, whose president, Céline Bak, appeared in front of this committee last month I believe, shows that Canada has lost 41% of its global clean tech market share since 2005.
Promised new innovation and clean tech programming may address the needs of such companies that are ready for commercial scale-up, but the urgency of these opportunities does not allow many of these companies to wait until the budget and all of the programs are implemented at the end of 2017.
To date, no program is available to allow Enerkem to maintain its current growth trajectory, including the ones offered by BDC and EDC. We look forward to learning the details of the recently announced $1.4 billion that the Government of Canada will allocate to BDC and EDC over three years for clean tech commercial growth.
We are equally eager to learn how this commitment will add new resources and capital and broaden the mandates of BDC and EDC for clean tech. We hope that these agencies will now be equipped to support large-scale clean tech commercial growth. Growing Canada's clean tech sector begins with retaining and growing the ambitious companies that have built strong IP here in Canada and can diversify our economies, stimulate our manufacturing sector, and generate greater value from natural resources.
Thank you very much.