Weighing Canadian prairie agriculture’s biofuels potential is a complicated question, says Advanced Biofuels Canada president Ian Thomson, but he believes the industry has good prospects which may be greatly improved as more Canadians and companies place a higher premium on sustainability.
“In California,” says Thomson, “and I use them as an example because they have great data on this up to 2030 and beyond, if you look at what kind of fuels and vehicles are going to be out there we are still going to be hugely reliant on liquid transportation fuels. The only viable way to reduce emissions from those liquid fuels is through biofuels. Most people in policy and government acknowledge advanced biofuels, which are low carbon intensity and have less greenhouse gas production made from sustainable sources, are going to be critically important. We need them. Full stop.”
Convincing farmers to grow crops for biofuels is another matter entirely, acknowledges Thomson.
“We need to have the kind of policies in Canada which encourage people to both build refineries in Canada to use these products, and also to make the economics of selling the biofuels they produce viable,” he says. “It’s got to go all the way downstream to the end use, and if the end use makes those biofuels important, largely because of the value of carbon or they are required to by regulation, then people who want to produce those fuels will get in the game. Those producers are then going to end up on the farmer’s doorstep.”
Thomson says the Canadian biofuel industry is getting there, albeit slowly. He is encouraged by the prospect of a new biofuels refinery in Lethbridge, but does not feel such a refinery is absolutely necessary to give his industry a boost in growers’ considerations.
“You’ve got a bio-refinery in southern Alberta just waiting to turn on, and they are in the process of doing the final stages there,” he says. “And they can take both animal fats and they can take canola oil. They can do both. A facility like that can take pretty good part of output from the southern part of the province, but just like any other crop a producer will travel quite a distance to sell it. They will do the same for biofuels. I don’t think having local refinery capacity for biofuels is so critical as having the ability to get your grain to market.”
What is more likely to drive a new biofuels market for farmers is a competitive price, and if operational changes to produce biofuel crops can be easily absorbed into their existing operations, says Thomson.
“I think today’s producers are sophisticated business people, and they are looking at opportunities in the world and aggressive trends.”
“I think biofuels is one many of them are pretty up to speed on. A decade ago it may have been the case oil seed and grain prices were really low and farmers were simply looking at biofuels to diversify their incomes …
“What’s now happening is we have technologies that can take what haven’t traditionally had value to a producer like corn stoke, wheat straw or things like that. It is generally acknowledged you can take a portion of that off the land and find ways to use it in other ways.
“Agricultural producers are starting to look at things they can do with their residues that in other jurisdictions are being used to make biofuels and bio-materials. It is an additional revenue stream, and it is not subject to some of the same market risk their traditional food products are.”
Thomson gets the sense many producers are still taking a wait and see approach when it comes to biofuels, waiting for a turning of the wind toward more demand and consumption of biofuels in society as a whole. This is where government can play an important role, says Thomson.
“We need to have the kind of policies in Canada which encourage people to both build refineries in Canada to use these products, and also to make the economics of selling the biofuels they produce viable.”
“A number of provinces are reviewing and looking to increase their requirements in their renewable fuel standards, where they require a certain number of renewable content in gasoline and diesel.
“Ethanol and biodiesel are obviously a significant part of that; so there is opportunity there. There are clean fuel standards the federal government is in the process of putting together, and they are just starting to dig into the details with all the stakeholders, which includes agricultural producer associations. That could be a source of demand for biofuels.”
Thomson strongly feels biofuels may be on the cusp of a much bigger market going forward.
“Crop-based fuels are still providing a significant opportunity for a producer,” he says.
“So whether it is a corn ethanol or whether it is a biodiesel or renewable diesel— those won’t go away and continue to be important.
“We have the markets for them and we have the technologies to make fuel, and to have a really good environmental benefit. There is a lot of upside.
“It’s remarkable. If the petroleum industry came out tomorrow and said they have a fuel which can reduce emissions by 90 per cent, people would call it a breakthrough. Well, we already have them.
“And the capacity to deliver the feed stock for a larger biofuel industry is right in front of us. It is highly efficient producers.”