Coalition formed to fight proposed biodiesel mandate
May 10, 2011
TORONTO, Ont. -- Following the dramatic spike in fuel prices today, a coalition of Canadian on-road diesel fuel user associations is raising the alarm over the price impact that a government-imposed biodiesel mandate would have on its members.
TORONTO, Ont. — Following the dramatic spike in fuel prices today, a coalition of Canadian on-road diesel fuel user associations is raising the alarm over the price impact that a government-imposed biodiesel mandate would have on its members.
The coalition, which comprises the Canadian Trucking Alliance (CTA), Motor Coach Canada (MCC), which is the national lobby group for bus companies, and the Owner-Operator’s Business Association of Canada (OBAC), which represents small independent truck operators, say the national biofuel mandate, if it is to go ahead July 1, needs to be amended to provide protection for diesel fuel consumers from prices that exceed those of regular diesel, supply shortages and potential operational issues.
The group points to individual US states such as Massachusetts and New Mexico, whose biofuel mandates allow for the suspension of the regulations should the price of diesel fuel climb above that of regular diesel fuel.
The coalition says the federal government’s own recently-released regulatory impact analysis statement said the biodiesel mandate will cost taxpayers $2.5 billion over the next 25 years and increase pump prices for diesel fuel and reduce the fuel efficiency of commercial vehicles while generating little in the way of greenhouse gas reductions.
“The biodiesel mandate is going to exacerbate the problem of higher fuel costs through increased prices at the pump and through reduced fuel content of biodiesel,” said David Bradley, president and CEO of the CTA. “The only question is by how much. We can’t control some of the things that are currently impacting fuel prices, but we can avoid introducing policies domestically that could make things worse.
“In addition, the biodiesel program is completely inconsistent with the federal government’s announced intention to introduce a national fuel economy/GHG reduction standard for heavy truck engines,” he said.
Brian Crow, MCC president, says bus companies, like trucking fleets, are worried about the impact the biodiesel mandate will have on the costs of operating a motor coach, as well as on engine durability and operability. Currently there are no Canadian standards for biodiesel production, limited blending facilities to make the product and government plans to allow the retail sale of biodiesel above recommended manufacturer warranty levels for both light and heavy-duty vehicles putting consumers at risk for expensive repair bills.
“If governments want to go down this road they should mandate that all government vehicles – buses, trucks and cars – should be the guinea pigs, not the people and companies trying to stay afloat during these very difficult times”, said Crow.
Joanne Ritchie, OBAC’s executive director, says the cost increases associated with biodiesel will hurt her members – mostly single-truck operators. “Fuel is the largest single cost component for these small businesses; a few cents either way can be the difference of whether they survive or not. Even the most conservative estimates suggest this regulation will take $4,000 to $6,000 out of my members’ pockets with no opportunity for a payback.”
In addition to costs, there are real concerns about blending requirements and dubious product quality, says Ritchie. “Possible warranty issues because of blending problems, engines that quit because of winter gelling, and burdensome cost increases; this ill-conceived biodiesel mandate will just add to the challenges already facing owner/operators.”
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