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Increased consumption key to B.C. biodiesel emergence

VANCOUVER, B.C. - Biodiesel production has yet to make a giant splash in Canada, but B.C. is setting the stage to become a major player in biodiesel production for the domestic market....

VANCOUVER, B.C. – Biodiesel production has yet to make a giant splash in Canada, but B.C. is setting the stage to become a major player in biodiesel production for the domestic market.

It is expected by 2010, B.C. will have a booming biodiesel industry, which will reduce the current dependence on imported biodiesel. These expectations were brought to light by industry experts who spoke at Canada’s first Biodiesel Production Opportunities Workshop in Richmond, B.C. on Jan. 26.

At the workshop, Agri-Green Biodiesel announced it has begun production at its biodiesel plant in Fernie, B.C. With production capabilities of two million litres a year the facility is the first to begin production in Western Canada. As well, in Delta, B.C. recently, Autogas opened North America’s first retailer of multi-blend biodiesel.

“About a year and a half ago we started talking about biodiesel and found there was a huge interest in British Columbia,” explained Dennis Rogoza, president and CEO of Fleet Challenge Canada. “We had a whole variety of parties who came together and said lets work together to grow the market here.”

A little more than 100 interested parties from across Canada and the U.S. attended the workshop, where knowledgeable speakers relayed information on a number of issues including: plant development; production; distribution; and fuel quality.

“Commercial biodiesel production takes a lot of capital, secure feedstock supplies and a reliable distribution system. And when it comes to fuel quality, there can be no shortcuts. Any missteps could set the whole industry back. These are messages that we wanted to communicate at this workshop,” said Rogoza.

Recent cold weather problems with biodiesel in Minnesota have cast a dark shadow over the industry, but Rogoza does not see it being a problem with domestically-produced biodiesel.

“Quality is paramount. Whatever product you use to produce the biodiesel it should meet the ASTM standard and that’s the bottom line,” said Rogoza. “If you don’t meet standards you’re going to have problems; whether it’s gasoline, diesel or biodiesel. That’s the reason we have standards in place.”

In Minnesota, the biodiesel being used was made with soybean. The base ingredient for production in B.C. would most likely be canola, but the final decision is up to the production plant.

Rogoza says canola is the most likely candidate for two reasons. The first, being a lack of soybean in Canada and the second reason is it follows the model for production of European biodiesel, which is canola-based.

Commercial production of biodiesel first began in Germany in 1991 and today there are approximately 1,900 stations in the country, which supply biodiesel fuel. In Europe and the U.S. billions of litres of biodiesel are produced every year and much of the consumed biodiesel in Canada is imported from the States.

In 2004 approximately 4,000 litres of biodiesel were consumed in the Pacific coast province, all imported from the U.S.; but Rogoza estimates, with all the current players in the province, the number will be up around six million litres for 2006.

It’s those estimations, which have peaked interest in the biodiesel production market for B.C.

The first commercial biodiesel plant in Canada opened in November of 2005 in Montreal, with capabilities of producing 35 million litres of biodiesel a year. But the cost to import biodiesel to B.C. has made it difficult to list the product at an attractive price to consumers.

To create a feasible market for large-scale production in Western Canada, Rogoza says the product has to be affordable.

“There are some constraints in the market in regards to production and distribution,” he explained. “It’s all chicken, egg, chicken, egg. The volume has to be big enough to pay for all the product to be distributed. If there are only one or two buyers it will not be significant enough to bring the cost down.”

About 40 fleets in B.C. are using biodiesel fuel, with municipalities making up the majority of the users. According to Rogoza, municipalities and transit fleets must lead the way to create a production need and then the trucking industry will follow.

“If you fill up in Vancouver, you might not see another biodiesel station until you get to Ottawa,” he said. “If you get local production at a large scale, the cost will go down.”

Right now the biodiesel movement is also dependent on promises made by the Conservative Party of Canada in the most recent election. In the party’s platform, the newly-formed minority government pledged to require five per cent average renewable content in Canadian gasoline and diesel fuel, such as ethanol and biodiesel, by 2010.

“The government is going to play a big role in this. If the fuel standard is implemented the demand will go way up,” said Rogoza. “It will take us from our current use of a million litres a year to 100 million litres, or one billion litres a year, it will be a big business.”

In 2005, the Province of B.C. removed the fuel tax from biodiesel in an effort to increase its market potential.

British Columbia’s provincial government showed further support of biodiesel as a sustainable alternative by announcing a $25,000 grant to the Fraser Basin Council for market development at the Jan. 26 workshop.

“The Fraser Basin Council and Fleet Challenge B.C. have spearheaded a number of programs to reduce harmful emissions from fleet vehicles while developing clean industries to help diversify B.C.’s economy,” said David Marshall, executive director of the council. “A thriving biodiesel industry will benefit local businesses, the environment and British Columbia’s agriculture industry.”

Fleet Challenge Canada receives its core funding from Natural Resources Canada and was established to reduce overall greenhouse gas emissions from fleet vehicles.

Biodiesel is a biodegradable, clean-burning alternative fuel produced from renewable sources such as used vegetable oils, animal fats and trap grease, and domestic oilseed crops such as soy, canola and hemp.

When blended with traditional diesel fuel, it significantly reduces both greenhouse gas and tail pipe emissions. The blend usually ranges from five to 20 per cent biodiesel, blended with traditional diesel, referred to as B5 and B20.

“Biodiesel is interesting and a lot of fleet owners are interested,” said Rogoza. “All you have to do is buy the fuel. With a lot of other initiatives there is new technology and equipment. But when you go to biodiesel, all you have to do is pour it in.”

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