Greening the Canadian Transportation Sector

FROM THE JULY ISSUE: CEO of IGPC Ethanol Inc. and Chair of Renewable Industries Canada Jim Grey talks about how Canada is a good example of how biofuels can lead the way for greenhouse gas reductions.
By Jim Grey | June 26, 2018

Everyone in our industry can agree that it is in our interest to promote a greater understanding of the role of biofuels in the fight against climate change. Canada is a great example of how biofuels can lead the way for greenhouse gas (GHG) reductions, and of the importance of bringing this message to policymakers. 

As business people, ethanol producers think first, quite naturally, of the bottom line. We think of the need to run our operations efficiently, to source and manage timely inputs, to ensure our transformation processes are optimized, our distribution systems effective, our sales, marketing and accounts receivable efforts well-managed, etc.

When we engage with our buyers, we market our product based on its price, quality and octane level. While these critical aspects must remain central to our focus, we also engage regularly with two other audiences whose interests differ considerably: policymakers and the general public. As Canada heads toward key decision points that will transform transportation sector fuels, educating and engaging policymakers has never been more important.

In December 2017, the Canadian federal government announced the first details of its national Clean Fuel Standard. The proposed policy aims to eliminate 30 megatonnes of annual GHG emissions by 2030. This targeted reduction is aimed at buildings, industry and the transportation sector, creating a significant opportunity for biofuels.

At the same time, Ontario, Canada’s largest province, has just finalized an enhanced ethanol mandate bringing the required volume to 10 percent, effective as of 2020. Quebec, the second-largest province, has committed to implementing its own mandates by 2020.

Overall, Canada is poised to join world leaders in aggressive climate policies and our goal is that biofuels are recognized as a key pathway for GHG reductions. Our association, Renewable Industries Canada, has led the way in advocating a strong role for biofuels as a part of the CFS. Here’s a short sampling of some of the data points that we have developed to help drive the argument that biofuels are a critical component in reducing transportation sector GHG emissions.

Of the CFS’s 30 megatonne target, ethanol alone can deliver anywhere from 8.5 megatonnes based on conservative calculations, to 15 megatonnes of GHG reductions should the policy optimize ethanol’s potential. Biodiesel and renewable diesel combined could conservatively add another 9.7 megatonnes of reductions, assuming a total blend level of about 13 percent. This number could be considerably higher in a bullish scenario.

So, in Canada, biofuels in and of themselves could contribute from 18 to 26 of the 30 megatonnes of reductions sought by the CFS. This represents anywhere from 60 to 87 percent of the total policy’s target. This would be a win-win for Canada’s environment, and economy. Independent economic modeling has shown that under a well-designed CFS, the Canadian biofuels sector could have an increased economic impact of up to $21 billion (Canadian) per year, while creating over 12,500 full-time jobs.

As policymakers around the globe work toward meeting commitments under the Paris Agreement, it is worth noting that focus on the transportation sector—and biofuels in particular—can pay strong dividends.

Author: Jim Grey
Chair, Renewable Industries Canada
CEO, IGPC Ethanol Inc.