Any optimism over the updated Clean Fuel Standard, set to be revealed Friday, December 18, has been over-shadowed by last week’s environmental plan that includes an upward incline in carbon taxes to 2023.
Markus Haerle, chair of the Grain Farmers of Ontario, has many positive things to say about the opportunity for diverting corn into ethanol under the Clean Fuel Standard, but is “stunned” by the latest carbon tax numbers.
Haerle estimates that for a 170 bu/acre corn crop, which isn’t even the highest yield in some areas of the province, the carbon tax will add up to $50/acre*. That’s flat out a line item, a cost, with no chance of passing that cost on.
So while there are positives in the potential for more biofuels, Haerle is concerned about the competitiveness of Canadian farmers under the new carbon rules. He also wants to ensure the processing capacity exists to make the most of the biofuel mandate, and that there is an open border — where Canadian grains and oilseeds are the preferred seed stock, but that American grain could move here if need be (and vice versa).
For a full discussion on the Clean Fuel Standard and the carbon tax impacts, tap below:
The carbon tax in 2019 was $20 per tonne of GHG, which equaled $5.48 of carbon tax per acre of corn based on 170 bu/acre. In 2022, the carbon tax will increase to $50 per tonne of GHG, which will equal $13.80 of carbon tax per acre of corn given the same moisture conditions in 2019.