CTA to Feds on biodiesel: "Fail"
OTTAWA – Now, as fuel prices soar through the ozone layer, is not the time to make Canadian truckers buy biodiesel.
Think fuel prices are high now? Just Wait until July 1st when the national two-percent (B2) biodiesel requirement kicks-in, says the Canadian Trucking Alliance, which calls the mandate nothing more than a "fuel tax increase."
It’s only going to make everything more expensive and research shows it won’t help the environment, says the trucking group.
Indeed, the current federal government’s approach to mandating the fuel in Canada "fails on all counts."
In a prepared statement, CTA President David Bradley says mandating the biodiesel will not only drive up prices for truckers and thus consumers, it might end up fouling truck engines. In other words, it’s going to cost.
According to the Federal Government’s own research, the feds have doled out over $2 billion in subsidies to the renewable-fuels industry in recent years. And over the next 25 years, there will be a $2.4-billion net cost to taxpayers with only an incremental reduction (a mere 1 MT CO2 per year) in GHG.
“It really makes you wonder why we’re doing this,” commented David Bradley.
In the U.S., where there is a somewhat more mature biodiesel market, prices are one-to-eight-cents-per-liter higher than regular diesel fuel.
For Canadian truckers this could mean a fuel-price boost in the range of between $2,100 and $6,000 per truck, depending where biodiesel price increases fall in Canada.
According to CTA, a leading product for biodiesel (canola) is already at record highs.
And predicting the market could get tricky.
As Today's Trucking has explained, the mandate consists of a "pool average," meaning that as long as the national blend average is B2, suppliers are free to distribute higher and lower contents of biodiesel in certain regions based on market demands.
In addition, there’s a severe shortage of biofuel production and blending capacity in Canada. It is widely acknowledged that Canada will have to import 85 percent of the biodiesel need to comply with the mandate.
The Canadian Petroleum Products Institute, which represents petroleum producers, called upon the government to delay the implementation of the requirement until its members can build the necessary blending facilities required to satisfy the regulation.
"All of these things add up to one thing,” says Bradley, “higher prices for consumers. The only question is by how much. The biodiesel mandate is only going to make things worse. They can’t even guarantee us that the stuff won’t gum up most truck engines at the kinds of blend rates we are likely to see at certain times of the year in various parts of the country. There is no protection for the consumer.”
He continues: “The biofuel producers are getting literally everything they want -- regulatory certainty, a captive market and massive subsidies -- all of which they can take to the bank, whereas the consumer, mainly truckers, will get even higher fuel prices that we currently have at a time when trucking companies are just finding their financial legs after being ravaged by the recession.
"Why should truckers be forced to pay more when the biofuel industry has already received billions in subsidies? It’s no different than a fuel tax increase."
Bradley insists CTA is not opposed to the introduction of alternative fuels into the trucking industry.
“Why wouldn’t we want to reduce our reliance on oil? 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.”
CTA is calling upon the federal government to introduce amendments to its proposed regulation that will provide a level of protection for consumers.