Biofuel requirement will increase diesel costs, CTA warns

by Array

OTTAWA: The price of diesel will jump if the federal government sticks to its July 1 deadline to include two-percent renewable content in diesel, says the Canadian Trucking Alliance (CTA).

Trucks are the largest buyers of diesel fuel and move 90 percent of all consumer products and foodstuffs, the CTA said, also warning the move could lead to higher prices for consumer goods.

The government published renewable fuels regulations last September, which require about five-percent renewable content in gasoline. The regulations also contained the provisions to require an average of two-percent renewable content in diesel fuel and heating oil.

“When we announced our Renewable Fuels Strategy, we were clear that the two percent requirement would be implemented subject to technical feasibility,” said Peter Kent, minister of the environment. “After positive results, we are moving forward with this requirement, which will result in further reductions in greenhouse gas emissions and ultimately in cleaner air for all Canadians.”

The strategy’s two regulatory requirements—combined with provincial regulations—are designed to reduce annual greenhouse gas emissions by up to four megatonnes.

But according to the CTA, prices in the US are running at one to eight cents per litre above regular diesel fuel, depending on how much biofuel is blended in. For Canadian truckers, this could mean annual increases in diesel fuel costs of $2,100 to $6,000 per truck, the alliance added.

In addition, the CTA said, biodiesel production is costly. There’s also a shortage of production and blending capacity in Canada.

“All of these things add up to one thing—higher prices for consumers,” said David Bradley, the trucking alliance’s CEO. “The only question is by how much. The biodiesel mandate is only going to make things worse.”

Bradley said CTA is not opposed to the introduction of alternative fuels. But, we need to be sure the fuel we put in our tanks works—it has to be in plentiful supply and it should not cost us more than regular diesel.”