More than five years in the making, the Canadian Canola Growers Association (CCGA) is happily looking to the future of the biofuel industry after the federal government published the new Clean Fuel Regulation (CFR),replacing the Clean Fuel Standard.
Steve Pratte, senior manager of transportation and biofuel policy with the CCGA, shares why the organization is pleased with the release of the CFR.
“Number one, there’s going to be most likely an incremental draw for canola as a feedstock. And number two, after years of kind of wallowing around, it’s going to set out the framework for fuel producers, for the canola crush industry,” says Pratte.
The framerwork will mean farmers will understand what the rules of the game are going to be now in Canada, and moving forward for the for the foreseeable future. “The market can settle that back make plans, you know, various companies and organizations can understand how they can maybe play into that and invest to capitalize on opportunities,” he says.
Since the beginning of creating the new regulations five years ago, Pratte says a large focus was for it to remain flexible, something that was accomplished and demonstrated throughout the new publication. He says pinpointing how much the industry stands to grow as a result of the CFR has far too many variables and a specific number is just too difficult to predict but says it could be “reasonably significant.”
Pratte explains the difference in flexibility between the previous Clean Fuel Standard, which had more rigid specifications, vs the new Clean Fuel Regulations.
“Biofuels are only one way that the, the obligated parties, which are the fuel suppliers in Canada can meet their obligations to this regulation. So it’s really different. And there’s multiple other ways they can meet their compliance. But we as growers, we as an industry, and then also even in the government’s explanation of the impacts of this regulation, there will be most likely give that caveat, there will be a there will be biofuels will be used in increasing amounts to fulfill this obligation under this regulation,” he says.
The ways in which companies meet compliance aren’t the only variables that are yet to be determined. Transportation of canola products including, oil, meal and seed, will also likely see some changes in the coming years. Demand will be moving towards a larger group of end-users, whereas before, a large portion was being pushed out to BC who has already established their own clean fuel regulations which captured a large portion of the Canadian biofuel market.
For those concerned with the rising fuel prices, Pratte says he is hopeful and the momentum suggests the offset of demand and commodity prices should make up for the difference. Additionally, he says there is some room for the federal and provincial governments to get involved to ensure a level playing field.
“Of course, there’s going to be price implications here. And one of the levers that the federal government obviously, and to some degree the provincial governments, have at their disposal, which we see using United States, is tax law,” says Pratte.
Overall however, he says the new CFR is a welcomed document by the industry and will more than likely induce an uptick in Canadian canola demand and production.
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