Canadian Trucking Alliance

Canadian Trucking Alliance

April 15, 2011 09:56 ET

Truckers Say Renewable Fuels Association Defensive Over Costs of Biodiesel to Canadian Consumers

OTTAWA, ONTARIO--(Marketwire - April 15, 2011) - According to the president and CEO of the 4,500 member Canadian Trucking Alliance (CTA), the Canadian Renewable Fuels Association (CRFA) "is clearly defensive" since the release of the federal government's Regulatory Impact Analysis Statement (RIAS) on the proposed biodiesel mandate set to come into force on July 1st of this year. The RIAS found that the costs to Canadians of requiring all on-road diesel fuel sold in Canada to contain an average 2 per cent biofuel content would exceed benefits by a staggering $2.5 billion over the next 25 years and produce negligible greenhouse gas reductions.

On April 8th, the CRFA issued a press release in which it accused CTA of "misleading Canadians", when according to Bradley all CFRA offers in response are the findings of some warmed over studies by "'CRFA commissioned independent experts' – their words not mine," says Bradley. "That's a bit of an oxymoron."

The government's own regulatory impact statement also says truckers' fuel costs will increase as a result of the biodiesel mandate, reflecting a combination of higher prices at the pump and reduced fuel efficiency. CTA cites data from the US which shows that depending on the biofuel blend, the differential between the pump prices for biodiesel and regular diesel to argue that the price gap will be significantly higher than the numbers estimated by Environment Canada in the RIAS. CRFA meanwhile claims that its experts believe prices will go down. CRFA does not try to rebut CTA's concerns over potential supply issues; notably that Canada will have to import as much as 85 per cent of its biodiesel needs to meet the demand, at least for the first several years, or that biodiesel cannot be transported by pipeline. Says Bradley, "If CRFA is so sure that biodiesel prices will be less than regular diesel and that supply won't be an issue, why won't it support an amendment to the regulation which would enable the government to suspend the mandate should prices exceed that of regular diesel or if we end up with supply shortages?"

Similarly, CRFA dismisses CTA's concerns over the potential impact biodiesel could have on the operability and durability of most heavy truck engines as "untrue" saying that biodiesel will work well in "all" truck engines, citing the results of some very limited studies conducted in recent years in near-perfect conditions. According to Bradley, "What the RIAS says is that if all the stars are aligned in the universe, biodiesel at a two per cent blend can work in truck engines, not that it will work, especially at the higher blends that will occur at various times of the year and in various regions."

Bradley notes that the ethanol mandate for gasoline established a maximum blend rate of 10 per cent specifically to address warranty issues. "Why won't CRFA support a cap at B5 for now, and then perhaps move the limit up over time when and if the engine technology develops to be able to safely use it? Higher blends could still be sold to those that want it as a special fuel." Most engine warranties for heavy trucks cover B5 or less.

With regard to the environmental impact of biodiesel, CRFA provides nothing beyond the very modest 1 Mt CO2 estimate of annual GHG reduction contained in the RIAS. CRFA also says biodiesel will contribute to improved air quality, to which Bradley responds, "by regulation all new truck engines built since 2010 have to be smog-free anyway, so I don't see how biodiesel makes a difference one way or another."

"On balance, the government's regulatory impact statement raises sufficient concern about the costs and the payback of the biodiesel mandate, that might lead some to question why Canada is heading down this road at all," says Bradley. "Without some level of consumer protection from increased fuel costs, fuel quality, engine problems, warranty issues and supply shortages, we would agree. What we're asking for is only fair. We're not opposed to creating new markets for farmers as long as it's not on truckers' backs."

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