Government brings in low-carbon fuel bill

Bill 16 mandates five-per-cent renewable fuels by 2010 and fines for polluters

Derrick Penner, Vancouver Sun

Published: Wednesday, April 02, 2008

The province wants gasoline and diesel sold in B.C. to contain five-per-cent renewable fuels by 2010, and on Tuesday gave itself the power to regulate fuel suppliers in meeting that goal.

At the same time, the province announced plans to level fines against high-polluting transport trucks as another measure aimed at reducing greenhouse-gas emissions from the transportation sector.

Richard Neufeld, minister of energy, mines and petroleum resources, introduced in the legislature Bill 16, an act aimed at renewable and low-carbon fuel requirements, which contains the regulatory framework to meet the promises on renewable fuels made in the B.C. Energy Plan.

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The act requires fuel suppliers to supply a prescribed percentage of renewable fuels in gasoline and diesel.

It also allows the province to set thresholds for the "carbon intensity" of fuel, which takes into account not only carbon in gasoline and diesel, but the carbon footprint of extracting, refining and transporting fuel to filling-station pumps.

In addition, the act sets out requirements for suppliers to report on how they are complying and penalties for those that don't.

In an interview, Neufeld said the legislation gives government the power it needs to write enforceable regulations that will meet the goals it set in the 2007 provincial energy plan.

"Now what we have to do is develop regulations so we can work with refiners to make sure all of these things happen by 2010, which is probably coming quicker than we'd like," Neufeld added.

He noted that the federal government has mandated that gasoline contain five-per-cent ethanol by 2010 and diesel 2.5-per-cent biodiesel by 2012, so "we'd better figure out how we can do it."

Neufeld said government sees opportunities for more of a low-carbon economy in B.C., such as through the production of ethanol and biodiesel.

Ted Stoner, western vice-president of the Canadian Petroleum Products Association, an industry group, said that as it stands, B.C. will be importing ethanol because it doesn't have any large scale production of its own.

"In general, the industry doesn't encourage mandates," Stoner said. "We would prefer to have natural supply and demand and competitive natures of the marketplace take hold."

If there were a good economic case for renewable fuels, Stoner added, they would automatically flow into the market. That they haven't yet done so "probably indicates what the economic case is for that."

Stoner said, however, American plants are producing lots of ethanol so meeting the target for its content in gasoline by 2010 "should be doable," and since commodity prices for ethanol are falling, should not raise the price of fuel.

Biodiesel, however, "is another kettle of fish."

Stoner said no other jurisdiction has tried to reach for five-per-cent biodiesel content in diesel, and it poses some challenges, especially in cold climates where the natural oils in biodiesel tend to stiffen up.

"It's our [industry's] reputation that'll be on the line," Stoner said, "we have to make sure this is going to work, and work at the level we're talking about."


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