Canada Aims to Boost Biofuel Production
CANADA: July 18, 2006


CALGARY, Alberta - The Canadian government said Monday it will give grassroots groups C$11 million (US$9.7 million) toward boosting biofuel production to meet its 2010 production target.

 


"We'll have to more than double our production," Agriculture Minister Chuck Strahl said at a biofuel conference in Calgary.

Ottawa wants 5 percent of Canada's transport fuel to be renewable by 2010, which will require 3 billion litres (793 million US gallons) of biofuel from 8 million tonnes of grain, oilseeds and biomass annually, Strahl said.

The government is developing a strategy to increase production of biofuels -- renewable energy produced from agricultural commodities including canola, wheat and corn -- that is expected to be introduced to cabinet this autumn.

"These initiatives will not only help provide new opportunities to farmers, they will also help lay the foundation for Canada's biofuels strategy," Strahl said.

Most of the funds, which are a part of the 2006 budget, will go to farmers and rural communities, to develop business proposals and feasibility studies for biofuel production.

"One-third of the ownership has to be producers," Strahl said at a press conference.

Farmers want to move away from being low-cost commodity producers to value-added producers who will benefit from higher revenue, Strahl said.

Doug Hooper, chief executive of Canadian Bioenergy Corp., a biodiesel importing and distribution company based in the western province British Columbia, welcomed Strahl's announcement. He did not, however, expect Canada's biodiesel production to reach the government's 2010 target.

"We're looking at a minimum 2 percent biodiesel. We don't forecast that we can either build the capacity or demand for biodiesel (by 2010)," Hooper said.

"Our mission here is not to take food out of people's mouths and put it into gas tanks."

Canada will increase its capacity for biodiesel as its canola surplus continues to escalate, Hooper said.

Several Canadian provinces already require ethanol, an alcohol fuel additive usually fermented from corn, to be blended into gasoline.

(US$1=$1.14 Canadian)

 


Story by Marcy Nicholson

 


REUTERS NEWS SERVICE