Manitoba Pumps up Biodiesel, Minnesota Backs Off
WINNIPEG -- The province of Manitoba has followed Ontario's lead and cut the taxes applied to bulk sales of biodiesel in order to encourage more companies to produce it. According to a report in the Winnipeg Free Press, Agriculture Minister Rosann Wowchuk announced the province will no longer collect its 11.5 cents per litre fuel tax on pure biodiesel. Instead biodiesel will have the provincial sales tax applied. Biodiesel -- which is said to be a cleaner burning fuel that can be made from any fat or vegetable oil, such as soybean oil or animal fats, and works in any standard diesel engine -- used to sell for 96.5 cents a litre but has now dropped 5.5 cents, at 91 cents per litre in the Winnipeg area, according to the Free Press. The province and Ottawa will also jointly release a $1.5 million support package to biodiesel producers who want to increase current production or start a new venture in Manitoba. Last week, the Husky Energy ethanol plant in Minnedosa announced a $145-million expansion that will boost the existing plant's capacity to 130 million litres a year, states the newspaper. Meanwhile, after becoming the first North American jurisdiction to mandate the use of biodiesel in heavy trucks, the state of Minnesota has suspended the month long rule. According to the Minnesota Trucking Association, the sale of biofuel has ceased because the state's largest refinery Flint Hills could not meet the conditions of the new biodiesel mandate. While refineries had enough biodiesel on hand to meet the B2 (2 percent biodiesel) content requirement, the stock did not meet proper state specifications. "We hate to say, 'I told you so,' but the MTA has been warning Minnesota legislators and the governor about the possibility of this scenario and the need to put a contingency plan in place," the association stated on its website. "Unfortunately, policymakers did not heed our concern. The stoppage could not have occurred at a worse time. Because of the hurricanes and refinery turnarounds, diesel fuel is already in short supply and prices in the Midwest are at an all-time high." After receiving a letter of concern from the MTA, the Minnesota Department of Commerce quickly allowed the refineries and terminals to sell straight fuel, if they can document that the biodiesel supply doesn’t meet the quality standards. This variance in the state law will be in effect for the next ten days. In the meantime, the MTA says it will continue to press elected officials to create a policy so that a similar situation will be avoided in the future. -- with files from the Winnipeg Free Press