Yes.
Evidence of meeting #25 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was biomass.
A recording is available from Parliament.
Evidence of meeting #25 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was biomass.
A recording is available from Parliament.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
We always look at what is going on in the U.S. Obviously we see what they're doing, and it shapes and influences us.
If we don't do this, if we don't go down this route—and I think we all agree that we should be going down this path—do we see the U.S. being able to export some of their product here and being able to benefit from our markets because we're not doing enough on our side?
2:35 p.m.
President and Chief Executive Officer, Canadian Fuels Association
There are two things happening. It's both ways....
One of them is that, if we don't increase and accelerate the production of bio-based products in Canada, biofuels, we will have to import them from the United States. No questions asked. That's a done deal. We're importing right now, so we have a huge opportunity to build in Canada.
Number two, with what we are building in Canada, if the life-cycle analysis is not quite the same, the incentives are not the same, our Canadian products are going to go to the United States. We will sell to California. We need to get it right. We need to get Canadian policies and incentives aligned. We also want to make sure that we keep it in Canada.
On that note, I think we're on a good track with the low-carbon fuel fund, the clean fuel regulations. It's the details in it that will be critically important in the next two years.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Those are forthcoming. I know there are a lot of consultations with your industry and a lot of stakeholders.
Do you believe that we can be self-sufficient in Canada when we talk about the biofuels industry, that we have enough to do, or will we need to import no matter what?
2:35 p.m.
President and Chief Executive Officer, Canadian Fuels Association
I'll be honest. At this time, I'm optimistic. I think we can do it by 2030.
2:35 p.m.
President and Chief Executive Officer, Canadian Fuels Association
I'm hopeful in what's happening. In the next two years, and with the conversation we're having—even with the other people, like Covenant, for example, which is outside our sector, we're all working together—I think we can get there.
One thing, though, is that it has to be all feedstock. We need to get forestry, agriculture—everything—to get there.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
As we are doing this report, would you say one of the issues is having more of a network, or certainly more.... I don't think there are a lot of organizations focused on feedstock for biofuels right now that just look at that, and maybe I'm wrong. Certainly, it is more of a national organization that is looking at feedstock.
How do we get it? How do we advocate to make that part of the.... It is part of the supply chain, but also having a voice within the supply chain? What are your thoughts on that?
2:35 p.m.
President and Chief Executive Officer, Canadian Fuels Association
We're taking some lead on this, to be honest. We're launching a transportation task force, with the automakers to make sure they can accept the fuel, with the feedstock suppliers so they can provide it to us, with all the blenders and all the biofuel producers, and we're going to have our first meeting in June.
I would suggest strongly that this committee recommend a transportation task force. We can only do it together as a supply chain. We can't do it individually.
2:35 p.m.
Liberal
2:35 p.m.
Liberal
The Chair Liberal James Maloney
Unfortunately, you are done. Thanks, Mr. Lefebvre.
Mr. Patzer, we'll go over to you.
May 7th, 2021 / 2:35 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Thank you very much to the witnesses.
I'm going to start quickly with Dr. Kumar.
I want you to finish up the thought on your public-private partnership that you were mentioning. I want to ask simply, why? Does it not make sense on its own, even with these regulations?
2:35 p.m.
Professor and Natural Sciences and Engineering Research Council of Canada Industrial Research Chair in Energy and Environmental Systems Engineering, University of Alberta, As an Individual
In the beginning, when the industry has to grow—and I especially focused on the lignocellulosic biomass industry, which has to grow—initial incentives will kick-start the economy, and then, later on, once the economy is going, the government might not need to do an investment, as the market will pick up.
That's what my initial thought was.
2:35 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Thank you for that.
I'm going to move over to Covenant Energy.
It's great to see some local production happening here in Saskatchewan. In particular, I like the fact that you're looking to build your plant right where the crops are being grown.
The question I have of you to start with is on some simple math: How many tonnes of canola are going to be needed per year, and how many litres of fuel is that going to produce?
2:40 p.m.
President and Chief Executive Officer, Covenant Energy Ltd.
Are you talking about our facility in particular?
2:40 p.m.
President and Chief Executive Officer, Covenant Energy Ltd.
We're looking at a 6,500-barrel-a-day facility. That's 6,500 barrels a day of feedstock, which produces about 5,900 barrels a day of fuel production. It's give or take whether you're producing arctic-grade renewable diesel, summer-grade or sustainable aviation fuel, but that works out to about 350,000 metric tons of canola oil if we are using 100% canola oil as a feedstock. That would produce in the ballpark of 325 million litres of fuel.
2:40 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Do you think we have that production happening right now? I know there have been a lot of questions about whether we are going to be replacing what's being grown for food with what's going to be used for biodiesel. Are you absolutely confident that you have the canola production right now in the region or across the province to meet that demand?
2:40 p.m.
President and Chief Executive Officer, Covenant Energy Ltd.
Absolutely. In 2019, four million tonnes of oil was produced, as I said. Fifty per cent of it went to the States and 25% of it went offshore, and we used only 25% of it here in Canada. Not only is there oil to be used here in Canada, but considering these announcements by Viterra, Cargill, Richardson and it looks like possibly even others that are coming out, there's going to be enough oil to fill this supply need for renewable diesel production.
2:40 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
I think you were talking about a feasibility study earlier. What is the pricing per litre? For a consumer, a farmer looking to fill his tanks, what's he going to be paying per litre for this renewable diesel when it comes time to actually get it onto market?
2:40 p.m.
President and Chief Executive Officer, Covenant Energy Ltd.
It's a little more complex than just stating a number. Right now the price is pretty much driven by what's happening in California. There's not even a really good tracker to follow that price. If you want to find out the price down in California, you basically have to take the rack price of diesel, add in the D4 RIN price, add in the California credit and then add in the blender's tax credit, and back into a price that way. It's a lot more complex than just stating a number.
Certainly, for our company, we're working out and showing all the economics behind the pricing scheduling and what it's going to look like and how it's going to move alongside even something like the vegetable oil market.
2:40 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
With the coal phase-out that's happening because of this government, it's obviously good to see the jobs that you're going to be making here and producing here. What's the opportunity to expand in this and to make this an even larger-scale operation than what you have right now?
2:40 p.m.
President and Chief Executive Officer, Covenant Energy Ltd.
We would be foolish not to take into consideration the ability to increase and to move alongside the market as it grows. Obviously it's a little bit more risky since it is just coming in. The CFS hasn't even been fully rolled out yet. We have plans to look at increasing in size to adapt to different feedstocks and to look at production and marketability for everything from Canadian fuel producers and suppliers to a home for it in the U.S. right down to the export market.
We haven't even talked about the spinoff effects for all the other industries that are going to be affected, like the processors, the logistics and shipping industry, and farmers. There are going to be widespread impacts.