Canadian Trucking Alliance

Canadian Trucking Alliance

February 10, 2011 17:26 ET

Federal Biodiesel Mandate Will Do Little for Reducing GHG

OTTAWA, ONTARIO--(Marketwire - Feb. 10, 2011) - The Canadian Trucking Alliance (CTA) is challenging government claims that its members stand to reduce their carbon footprint in any significant manner through a biodiesel mandate announced today by Minister of the Environment Peter Kent and Minister of Agriculture Gerry Ritz.

According to CTA, there is strong evidence, including a 2009 study done by EcoRessources Consultants (ERC) for Environment Canada, that shows the environmental impact of a biodiesel mandate in terms of GHG reduction is negligible and certainly outweighed by the costs. According to ERC, the total incremental cost to society of the proposed biodiesel regulation for on-road use would be $4.5 billion between 2011 - 2035, whereas the benefits, in the form of reduced GHG emissions, are valued at only a tad over $860 million. On a regional basis, Western Canada would take the biggest cost hit at about $1.8 billion, followed by Ontario at $1.3 billion and Quebec at more than $450 million. The report makes clear that consumers - the trucking industry and the increasing number of people buying more fuel-efficient diesel powered light-duty vehicles - would ultimately be burdened with the incremental costs of a biodiesel mandate, both in terms of direct costs and by the flow through of the increased costs to the petroleum refining sector, with very little GHG reduction benefit.

According to CTA's CEO, David Bradley, "It's no wonder other countries are re-thinking their biodiesel policies. Furthermore, under the proposed US heavy-duty truck GHG reduction regulation, which Canada says it will harmonize with, biodiesel isn't even mentioned as an option for meeting the new standard. If this is about the environment, then it behooves the Minister of the Environment to provide the trucking industry with emission credits for using this product."

"Today's announcement will eventually require that all diesel fuel product sold to on-road customers over a calendar year contain an average of two per cent biofuel content. Aside from the lack of environmental benefits, this new fuel standard could pose significant operating challenges for both light and heavy-duty users of diesel engines in winter conditions along with creating possible engine warranty issues. However, these impacts will be difficult to determine until the release of the details in the regulation.

"CTA made it clear from the outset," says Bradley, "that we are not opposed to the introduction of alternative fuels that could reduce our reliance on oil-based product, so long as it works in our engines, is in plentiful supply, is affordable and won't impair our engine warranties."

"Unfortunately, it seemed from the very beginning that the concerns of the consumer, in this case the trucker and the motor coach operator, but perhaps also the growing number of motorists buying cars powered by diesel, were secondary to those of big-agribusiness which stands to gain handsomely from the mandate. The comments from the Minister of Agriculture give only give further credence to this."

CTA concluded that in a time of rising fuel prices it is frustrating that a government would add cost to hard working businesses with questionable environmental returns as the basis. 

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