Good morning everyone.
My name is Éric Bouchard, and I am the executive vice-president of Groupe Rémabec. I am accompanied by my colleague Mr. Serge Mercier. He is the vice-president of business development and finance for Produits forestiers Arbec inc. and the president of Bioénergie AE Côte-Nord Canada, a subject that we will be talking about a little later.
To begin, I would like to thank you for inviting us. Mr. Mercier and I are very happy to be here with you today to talk about the development of the bioenergy sector. This subject is of relevance today, because this emerging sector has been developing for a few years now. I believe that we have many choices at the moment. The circumstances seem favourable, and the opportunities are clear.
I'll try not to repeat what the two previous witnesses said. Rather, I will talk about aspects that are dearly important to the Groupe, and that may not have been addressed, or that were addressed in a slightly different way.
First, I want to talk about what I consider the three most important links of the chain in the development of the bioenergy sector. Raw materials and the supply thereof constitute the first link; processing plants, the second; and opening new markets, the third. I will be focusing on these three aspects, given that my time is limited.
With regard to the first link, the supply of raw materials, I will mainly talk about the situation in Quebec, because our activities are concentrated in this province. Our traditional markets for our by-products are currently in decline. This has created an imbalance between supply and demand for the by-products.
Furthermore, this has repercussions on the prices of our by-products, which are falling much too quickly compared to the speed at which we can innovate as “sawmillers”. Innovation, for sawmillers, can certainly happen in the plants in order to improve our performance and our productivity, but we must also add value to all the by-products we create.
In the long run, we hope that our clients who are in sectors such as newsprint production are getting ready for a change, even though we can't expect every unit, when faced with a decline, to convert their operations to join more promising markets. We knew that this situation was coming, but we didn't think it would happen so quickly.
How can we add value to our by-products? The bioenergy sector is certainly important. It is a very interesting market because it's just coming to life. We see it as a winning niche market full of major economic opportunities.
Finally, I will finish my point on supply, the first link, by stating that, in our opinion, there are enough quality raw materials to go around. They will allow us to sustain the new, booming economy.
Concerning the second link, the processing plants, many things have moved forward in the last few years. What we are witnessing is the evolution of a great deal of high-performance, proven technologies. The federal government seems to have also implemented programs to innovate in this sector.
Our company considers the federal government as a good partner. You probably already know that Bioénergie AE Côte-Nord Canada is has a major project in the biofuel sector in Port-Cartier, in northern Quebec. It is a $104-million project with a capacity of approximately 42 million litres per year. The federal government, through its sustainable development technology Canada (SDTC) programs, and its investments in forest industry transformation (IFIT), has assisted us with an investment of over $44 million.
In other words, it is therefore possible to implement these kinds of projects. We just have to be proactive and have a certain long-term vision.
We have another more modest project that is in the pre-startup phase. It is a pilot project with pyrolysis oil. Currently, our investment is valued at approximately $8 million, which is a much lower amount than the one for the Port-Cartier project, but we are using different fibres. We have to therefore go in that direction. Solutions, techniques, and all kinds of things are coming to light. We have to position ourselves for what's to come.
Support from the federal government to transition toward this market is important to us. You have been a partner for the second step—the processing plants—and we are currently looking into markets that offer various solutions. The government could set the example for the first of these solutions, because the products from this sector could be used to heat buildings, fuel vehicles, for national defence, and so on. It would be a way to send a message that you believe in this economy, and that it must be developed.
As my colleague Mr. Tardif said, you would have to improve the regulations in order to promote a wider use of these products to transform different sources of energy, such as diesel or aviation fuel, for example, or any other interesting sources of energy. I think that we need support in this regard.
However, beyond all of that, we need a concrete program that will ensure that this industry can develop and give producers somewhat of an assurance about the revenue they could generate from it. I would invite you to research the Renewal Identification Number (RIN), which is an interesting system in the U.S. used by the whole industry, and that actually does issue carbon credits to fuel producers.
It is a great program, and we must draw inspiration from it. As raw materials increasingly become more available, and technology more advanced, the federal government must work with us to carry out these projects. We need emerging projects. Other investors are needed to put more processing plants into production, and, when this market is born, we must be there. It is an interesting way to solidify many markets in a way, because we will secure the forest sector, and build a new economy. We will also create jobs, which is very very important for our country. We will also keep an eye on our environmental footprint by including measures to reduce greenhouse gas emissions in these programs.
So let me say this: Let's stop looking around, and let's start getting things done. Let's implement favourable conditions for the industry, and let's pledge to develop our communities, because many Canadian communities live off the forest. I think that this is a good way to create and diversify wealth nationwide.
We are happy to answer your questions.