Process Management

News 191 views last update:6 Aug 2012

$200M for Canadian biofuel initiatives

The federal Canadian government officially launched its biofuels capital initiative this week. A four-year, CAN$200-million (US$178.6m, €131.5m) program will be established to help agricultural producers participate in biofuel production facilities.

The new plan is defined as the ecoAgriculture Biofuels Capital Initiative or ecoABC. Canadian agriculture Minister Chuck Strahl said it is the first program "to give farmers capital assistance to construct or expand biofuels facilities."

However, some Saskatchewan industry players questioned whether the initiative will spur producer participation in the industry, increase the number of biofuels plants or significantly benefit farmers.

The program will provide repayable contributions or loans of up to CAN$25 million per project to help farmers raise the capital necessary for the construction or expansion of biofuel production facilities.

Projects using agricultural feedstock, such as wheat or corn, that have producer investments of at least 5% of the project costs are eligible for funding. Corporations, including co-operatives, individuals and partnerships, are eligible to apply for ecoABC funding.

Too big for farmers
It is questionable if producers are willing to come up with $25 million to build a plant of large commercial size.

It is more likely that producers want to participate in smaller plants that are linked to feedlots, which can use the dry distillers' grain byproduct for cattle feed. But those smaller plants are more costly per unit of ethanol produced, while larger, more efficient plants are becoming more expensive to build.

To reduce greenhouse-gas emissions, the Canadian government has mandated that gasoline contain an average of 5% renewable fuel content by 2010, and diesel fuel and heating oil an average of 2% by 2012.

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