Canada’s proposed new biofuels rules only a first step, industry says
In Canada, Reuters reported that Canada’s biofuels industry warned that some gaps remain in the government’s proposed rules aimed at matching US incentives, and that the changes are unlikely to investment in the world’s top canola producer.
Under the proposed rules, Canadian biofuel producers would receive more credits from the government for producing biofuels in Canada. To meet low carbon emissions intensity limits, they can either produce low-intensity fuels themselves or buy credits from others, according to the report.
The changes would replace a system in which only the use of biofuels earns credits, and foreign-produced fuels receive the same amount.
They are designed to “close the competitiveness gap facing Canadian low-carbon fuel producers so they can compete fairly with US producers,” Canada’s government said.
The industry has long complained that US subsidies are higher, discouraging production in Canada. At the same time, in order to earn the credits, some Canadian fuel blenders have been importing US product due to a shortfall in domestic production.
The rules include different rates for ethanol, biodiesel and other alternative fuels. For ethanol, Ottawa is proposing a 1.3 times credit multiplier for Canadian production, compared to the 1.4 rate the industry had sought, the report added.
“Recognizing the problem and closing the gap (to US production subsidies) are two different things,” said Andrea Kent, a board member of Renewable Industries Canada. The proposed rules provide only about one-third of the value of support US ethanol producers receive, she said.
Category: Fuels
