The Ontario Tories’ plan to introduce a provincial biodiesel mandate modelled around a largely failed federal program is ill-conceived and would likely be a waste of taxpayer resources, says the Ontario Trucking Association.
In a letter sent to Progressive Conservative leader Tim Hudak, OTA president David Bradley strongly opposed a proposal unveiled last week by Hudak and Rural Affairs critic Ernie Hardeman, which would require that a 2-per cent biodiesel (B2) average be sold in the province.
“To be clear, OTA is not at all opposed to the introduction of alternative fuels into the trucking industry and actively supports a variety of environmental technologies and initiatives,” says Bradley. “A mandatory biodiesel policy, however, is not the answer.”
The proposed biodiesel requirement, highlighted in a Tory policy paper on agriculture and rural communities, would benefit farmers and be good for the environment, Hardeman insists. “There are not many large trucking companies going down Hwy 401 that are running on other types of fuel. They are almost exclusively diesel, and we think they should be biodiesel.”
However, an Ontario biodiesel mandate would only compound the heap of problems already associated with the federal government’s two-year-old B2 policy, which at the time was also hyped as a way to incent a new market for Canadian farmers and improve the environment. Instead, the government’s own regulatory impact analysis estimated a net cost of $2.4 billion over the next 25 years with only incremental GHG reductions.
“There were doubts about the effectiveness of the mandate from the beginning,” says Bradley.
At the time, CTA cited a host of more practical industry concerns that went largely unaddressed, including: the lack of testing on the reliability of biofuel and the potential impact on new generation smog-free truck engines; limited production in Canada and increased costs of biodiesel; and the lack of regulated fuel quality standards. Additionally, CTA sought (to little avail) an overall biodiesel content cap of B5 since refiners indicated they were meeting the 2-per cent average requirement by selling higher bio-content diesel in the warmer months and, conversely, lower or no biofuel content at colder temperature regions. CTA also learned that biodiesel preferred by refiners is largely not available in Canada and the vast majority of biodiesel is imported from overseas – at an increased cost to the end user.
“In the end, the economic interests of big agriculture and biofuel feedstock producers prevailed over those of the consumer,” Bradley wrote.
A 2010 study prepared for Environment Canada, as well as a recent review of the biodiesel mandate by Natural Resources Canada (NRCAN), echo many of these concerns. The NRCan study in particular found that after receiving over $537 million in funding, the renewal fuels industry still cannot sustain operations without the subsidies and producers continue to push for even more funding. It concedes there are “questions about first generation biofuels as a cost- effective means to reduce GHG emissions” and “beyond the requirements of federal and provincial regulations, there is uncertainty as to future export potential for biofuels.”
“The biodiesel program is not an environmental initiative; it has not created a new market for farmers or a new biofuels industry in Canada, which is what the program was intended for,” says Bradley. “Introducing a provincial mandate – which would take away the ability of refiners to average out the biodiesel content across the country over the course of the year and remain below the 5 per cent threshold – would only serve to put truck engine performance and warranties at risk, with no net benefit to Ontarians.”
Bradley says he plans to personally urge Hudak at an upcoming meeting not to move forward with the proposal.