May 17, 2010
by Purchasingb2b Staff
The Canadian Trucking Alliance (CTA) is once again speaking out against the federal government’s two percent biodiesel mandate.
the federal government introduced a notice of intent in Canada Gazette back in 2006 to develop a federal regulation requiring two percent renewable diesel fuel content no earlier than 2010 and no later than 2012, pending confirmation that this fuel will not have a detrimental impact on truck engines.
But there will be adverse effects, the CTA claims, citing a study conducted in 2009 by EcoResources Consultants for Environment Canada that found the costs of the biodiesel mandate would outweigh the benefits by a factor of five.
According to the EcoResources study, introducing biodiesel for on-road use would cost Canadians $4.5 billion between 2011 and 2035.
The benefits—in the form of reduced greenhouse gas emissions—are valued at only a little more than $860 million.
On a regional basis, western Canada would take the biggest cost hit at about $1.8 billion, followed by Ontario at $1.3 billion, and Quebec at more than $450 million.
The CTA says the study makes clear that consumers would ultimately be burdened with the bulk of the incremental costs of a biodiesel mandate, both in terms of direct costs and indirect costs passed on by the petroleum refining sector.
EcoResources also said it was “probable” that higher and more volatile fuel prices may be experienced in the first few years after introduction of a biodiesel mandate until the supply infrastructure is established.
In terms of the growth of supply, the study points out that current biodiesel production in Canada comes mainly from yellow grease and animal fats, which are in relatively small supply.
The study supports the stance of the CTA, which has been lobbying the federal government since 2006 to raise awareness of the issues confronting the trucking industry should the feds decide to go forward with the mandate.
The CTA contends that the impetus behind the government’s mandate is to create a new market for farmers and that from an environmental perspective there is little to be gained from the biodiesel mandate. To that end, it is calling for a full cost-benefit analysis.