Biodiesel Paper

linal keporL on Lhe 8iodiesel lndusLry in SaskaLchewan
f U L t NG TH f UTUR
TH SASKATCHWAN tODtSL
DVLOPMNT TASK fORC
|UN 2006
3 linal keporL on Lhe 8iodiesel lndusLry in SaskaLchewan
SASKA1CHEWAN 8lODlESEL DEvELOPMEN1 1ASK lOkCE
1he Honourable Mark WarLnan
MinisLer of AgriculLure and lood
koon 301, LegislaLive 8uilding
kegina, SK S4S 083
|une 21, 200
Dear MinisLer WarLnan:
On behalf of Lhe SaskaLchewan 8iodiesel DevelopnenL 1ask lorce, we would
like Lo Lhank you for Lhe opporLuniLy Lo serve over Lhe lasL year. lL has been a
challenging Lask Lo develop reconnendaLions and direcLion for an indusLry
which is sLill very nuch in iLs infancy in SaskaLchewan, as well as Lhe resL of
Canada. All levels of governnenL will need Lo be involved Lo develop a plan for
Canada if SaskaLchewan is Lo benefiL fron a biodiesel indusLry.
We would like Lo Lhank everyone who provided inpuL Lo Lhe 1ask lorce and
supporLed Lhis iniLiaLive. lron Lhese discussions, Lhe 1ask lorce iniLiaLed sLudies
Lo furLher undersLand Lhe opporLuniLies and challenges of a biodiesel indusLry.
We would like Lo express our Lhanks Lo your sLaff and Lhe deparLnenL for Lheir
assisLance LhroughouL Lhis process and Lheir conLribuLions Lo Lhe developnenL
of Lhis reporL. 1he 1ask lorce would also like Lo Lhank Lhe SaskaLchewan Canola
Crowers AssociaLion for Lheir iniLiaLive on Lhe fornaLion of Lhe 1ask lorce.
We are pleased Lo presenL Lo you Lhe final reporL on Lhe work conpleLed by Lhe
SaskaLchewan 8iodiesel DevelopnenL 1ask lorce.
Sincerely,
|udie Dyck, PAg, Co-Chair
Darin EgerL, Co-Chair
SASKATCHWAN tODtSL
DVLOPMNT TASK fORC
1he nenbers of Lhe 1ask lorce cone fron a varieLy of backgrounds, and also siL
on oLher conniLLees and boards relaLed Lo Lhe developnenL of a bio-econony.
Chairs:
Darin EgerL PresidenL, SaskaLchewan Canola Crowers AssociaLion
|udie Dyck, PAg ExecuLive DirecLor, SaskaLchewan Canola Crowers AssociaLion
Government:
Mark SLunborg AgriculLure and Agri-lood Canada
|ohn 8uchan, Larry CuLek SaskaLchewan AgriculLure and lood
Laverne Moskal (Michael MiLchell) SaskaLchewan lndusLry and kesources
Kin Hallard SaskaLchewan EnvironnenL
tndustry:
ZenneLh laye Milligan 8io 1ech, canola grower
8reLL |enson DSC Diesel Services
8ruce King SaskaLoon Processing (Division of WesL CoasL keducLion)
kon Kehrig AgWesL 8io
Producer Organizations:
koy 8uLLon ExecuLive DirecLor, SaskaLchewan Canola DevelopnenL
Connission and SaskaLchewan MusLard DevelopnenL Connission
|in 1horson DirecLor, AgriculLural Producers AssociaLion of SaskaLchewan
Linda 8raun ExecuLive DirecLor, SaskaLchewan llax DevelopnenL Connission
Researchers:
MarLin keaney SaskaLchewan AgriculLure and lood, Lipid QualiLy and
LilizaLion Chair, niversiLy of SaskaLchewan
8arry HerLz College of Engineering, niversiLy of SaskaLchewan
TechnicaI Advisors
CranL Mcvicar SaskaLchewan kesearch Council, Office of Energy ConservaLion
Dave KuLcher lleeL Challenge SaskaLchewan
1he SaskaLchewan 8iodiesel DevelopnenL 1ask lorce
TAL Of CONTNTS
1.0 SASKATCHWAN tODtSL DVLOPMNT TASK fORC ...... 8
vision SLaLenenL ...............................................................................8
2.0 XCUTtV SUMMARY .............................................................. 9
2.1 Sunnary of 1ask lorce keconnendaLions ...........................10
3.0 tODtSL .................................................................................. 13
3.1 lnLroducLion ..........................................................................13
3.1.1 EnvironnenLal lnpacL .......................................................... 14
3.1.2 8enefiLs ................................................................................ 14
3.1.3 Life Cycle Analysis and Enissions lnprovenenL .................... 14
3.2 8iodiesel as a luel QualiLy and Engine Perfornance ............1
3.2.1 QualiLy of Canadian Diesel luel ............................................ 1
3.2.2 LubriciLy ............................................................................... 1
3.2.3 Cold llow and Cloud PoinLs ................................................ 17
3.2.4 luel Efficiency ...................................................................... 18
3.2.5 lLra-Low Sulphur Diesel}New Engine 1echnology .............. 18
3.2. ConpaLibiliLy wiLh Engines ................................................. 1
3.2.7 WarranLies lndusLry SLaLenenLs ......................................... 1
3.3 Clobal DevelopnenL of 8iodiesel ..........................................20
3.3.1 European nion .................................................................. 21
3.3.2 niLed SLaLes ....................................................................... 23
3.3.3 Canada ................................................................................ 25
3.3.3.1 SaskaLchewan 8iodiesel Producers ............................... 25
3.3.3.2 kelaLed 8iodiesel lndusLries ......................................... 28
3.4 SaskaLchewan OpporLuniLies and Challenges
for a 8iodiesel lndusLry ...........................................................2
3.4.1 8iodiesel lndusLry SusLainabiliLy in SaskaLchewan ................ 31
3.4.2 lleeL Challenge SaskaLchewan .............................................. 33
3.4.2.1 Surveys ....................................................................... 34
3.4.3 leedsLocks ........................................................................... 35
3.4.3.1 Aninal laL ................................................................... 35
3.4.3.2 Canola ........................................................................ 3
3.4.3.3 MusLard ...................................................................... 3
3.4.3.4 llax ............................................................................ 3
3.4.3.5 Soybeans .................................................................... 37
3.4.3. Long 1ern leedsLocks ................................................. 37
3.4.4 Co-ProducLs fron 8iodiesel ProducLion ................................ 37
Clycerine MarkeLs ..................................................................... 37
3.4.4.1 8iodiesel More 1han a luel ....................................... 38
3.4.4.2 LubricaLing Oils ........................................................... 38
3.4.4.3 SolvenLs ...................................................................... 3
3.4.4.4 MeLal Working Oil ....................................................... 3
4.0 TASK fORC RCOMMNDATtONS ......................................... 40
4.1 NaLional kenewable luel SLraLegy ..........................................40
4.2 NaLional kenewable luel SLandard ........................................41
4.3 lncenLives .............................................................................42
4.4 8iodiesel luel QualiLy ............................................................47
4.5 8usiness SLrucLures ...............................................................4
4. SaskaLchewan 1he 8io-producLs CenLre for Canada ............4
4.7 kesearch and DevelopnenL ..................................................50
4.7.1 8iodiesel kesearch and DenonsLraLions ................................ 51
4.7.1.1 SaskaLchewan Canola DevelopnenL Connission ........ 51
4.7.1.2 SaskaLoon 8io8us, Phase ll kesearch ProjecL ................ 52
4.8 8lending and DisLribuLion .....................................................53
5.0 CONCLUStON ............................................................................ 54
6.0 RfRNCS ............................................................................. 55
7.0 APPNDtX .................................................................................. 56
8.0 tNfORMATtON RfRNCS .................................................... 57
LtST Of TALS
TabIe 1: CHC Enissions keducLions:
keplacing PeLroleun Diesel wiLh 8iodiesel ........................15
TabIe 2: Overview of Enissions for 8100 8iodiesel ..........................15
TabIe 3: Pour PoinL kesulLs C .........................................................17
TabIe 4: Cloud PoinL kesulLs C ......................................................18
LtST Of ftGURS
figure 1: lield Lo luel .....................................................................13
figure 2: European 8iodiesel ProducLion ........................................21
figure 3: EsLinaLed .S. 8iodiesel ProducLion .................................24
8 1he SaskaLchewan 8iodiesel DevelopnenL 1ask lorce
1.0 SASKATCHWAN tODtSL
DVLOPMNT TASK fORC
1he ongoing announcenenL of new biodiesel planLs in Lhe niLed SLaLes
(.S.), especially Lhose using canola as Lheir prinary feed sLock, pronpLed Lhe
SaskaLchewan Canola Crowers AssociaLion (SCCA) Lo Lake a leadership role in
ensuring LhaL SaskaLchewan did noL niss ouL on Lhe opporLuniLy Lo develop a
biodiesel indusLry. 1he SCCA, incorporaLed in 1 Lo represenL SaskaLchewan
canola growers, has had a long hisLory in policy developnenL for Lhe benefiL of
iLs nenbers and Lhe canola indusLry.
WiLh Lhe supporL of Lhe CovernnenL of SaskaLchewan, Lhe 1ask lorce was
creaLed Lo assess Lhe biodiesel indusLry and develop reconnendaLions Lo furLher
Lhe developnenL of biodiesel in SaskaLchewan. 1he 1ask lorce firsL neL April 20,
2005 and agreed upon Lhe following 1erns of keference:
1. 1o deLernine where Lhe biodiesel indusLry is currenLly, and whaL Lhe
poLenLial is for biodiesel in SaskaLchewan.
2. 1o idenLify Lhe challenges and opporLuniLies for Lhe developnenL of a
biodiesel indusLry in SaskaLchewan.
3. 1o consulL and Lo connunicaLe wiLh key sLakeholders.
4. 1o nake reconnendaLions Lo furLher Lhe biodiesel indusLry.
Vision Statement
1he key facLors regarding why a biodiesel indusLry would be desirable in
SaskaLchewan were discussed Lo develop a vision sLaLenenL. 1hese facLors
include:
1. PoLenLial econonic growLh and developnenL for rural connuniLies.
2. 8enefiLs Lo prinary producers beyond being a feed sLock supplier.
3. kenewable fuel.
4. EnvironnenLal benefiLs.
5. lnproved fuel efficiency, lubriciLy, engine wear and oLher
perfornance facLors.
1hese discussions led Lo Lhe developnenL of Lhe vision sLaLenenL:
To dcvclop d :u:tdindblc biodic:cl indu:try in Sd:kdtchcwdn bd:cd
on rcncwdblc biomd:: dnd d corc indu:try dround which to dcvclop
product: thdt cdn bc u:cd domc:ticdlly dnd cxportcd compctitivcly
to :upport cconomic dnd climdtc chdngc objcctivc:. Thc corc vdluc:
lor thc Sd:kdtchcwdn biodic:cl indu:try drc bid:cd towdrd: rurdl
Sd:kdtchcwdn dnd providing dn cquitdblc :hdrc ol bcnclit: to
primdry produccr:.
linal keporL on Lhe 8iodiesel lndusLry in SaskaLchewan
2.0 XCUTtV SUMMARY
8iodiesel is a renewable fuel nade fron any planL or aninal oil source, which can
be blended wiLh peLroleun diesel. lL is a non-Loxic bio-degradable producL.
8iodiesel brings environnenLal benefiLs by subsLanLially reducing carbon
nonoxide, hydrocarbon, parLiculaLe naLLer and greenhouse gas (CHC)
enissions, as well as hazardous wasLe. OpLinun benefiLs fron Lhe use of
biodiesel blends can occur in urban areas where air polluLion issues are greaLer.
ln 2000, Lhe Canadian governnenL seL a producLion LargeL of 500 nillion liLres
of biodiesel by 2010 in iLs ClinaLe Change Plan. 8y Lhe end of 200, producLion
capaciLy is esLinaLed Lo be 100 nillion liLres in Canada, wiLh only a snall porLion
in SaskaLchewan. 1he Canadian biodiesel indusLry needs Lo expand and be
conpeLiLive wiLh Lhe .S.
8iodiesel has been produced in nany jurisdicLions. Europe is boLh Lhe leader
in developnenL and producLion, wiLh a projecLed 3.4 billion liLres in 2005 and
double LhaL in 200. 1he second largesL biodiesel producer is Lhe .S., wiLh
producLion capaciLy aL 288 nillion liLres in 2005 and expecLed Lo reach seven
billion liLres wiLhin Lhe nexL few years.
WiLh SaskaLchewan having approxinaLely half of Lhe arable acres in Canada and
being a najor producer of oilseeds including canola, nusLard and flax, Lhere is
poLenLial for a biodiesel indusLry LhaL can provide benefiLs Lo Lhe environnenL,
rural connuniLies, prinary producers and Lhe provincial econony. A biodiesel
indusLry, alLhough noL a panacea Lo save rural connuniLies, can help reviLalize
rural SaskaLchewan Lhrough Lhe creaLion of businesses LhaL add value Lo prinary
agriculLural producLion.
SaskaLchewan has oLher inherenL advanLages for Lhe developnenL of a bio-
indusLrial econony besides iLs naLural resources. 1hese include iLs workforce,
cenLral locaLion in Canada, and criLical nass of experLise. SaskaLoon, in parLicular,
is well siLuaLed Lo Lake advanLage of Lhe bio-indusLrial econony Lhrough iLs
research, educaLional, and bioLechnology insLiLuLions.
8iodiesel has Lhe poLenLial Lo provide a plaLforn for oLher bio-indusLrial producLs
LhaL can bring even greaLer econonic reLurns. 1he challenges are idenLifying
Lhese opporLuniLies, connercializing Lhen by forning sLraLegic alliances, and
Laking Lhen inLo Lhe global narkeLplace.
lL will Lake Lhe LalenLs and conniLnenL of all Lhe sLakeholders, fron indusLry Lo
governnenL, Lo Lruly nake Lhis a "Made in SaskaLchewan biodiesel indusLry.
2.1 Summary of Task force Recommendations
(1he full background on each reconnendaLion can be found in SecLion 4,
beginning on page 40.)
Recommendation #1
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan requesL and
supporL a kenewable luel SLraLegy for Canada. 1he sLraLegy should be iniLiaLed
by Lhe CovernnenL of Canada in consulLaLion wiLh all provincial and LerriLorial
governnenLs. 1he kenewable luel SLraLegy should encourage developnenL of
producLion capaciLy according Lo regional advanLages.
Recommendation #2
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan call upon
Lhe CovernnenL of Canada Lo inplenenL a kenewable luel SLandard (klS) wiLh
separaLe allocaLions for biodiesel and eLhanol in on and off-road fuels. 1he 1ask
lorce suggesLs a biodiesel klS LargeL of Lwo per cenL by 2010, increasing Lo five
per cenL by 2015.
Recommendation #3
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan, in co-
operaLion wiLh Lhe CovernnenL of Canada and all provincial and LerriLorial
governnenLs, develop prograns and policies Lo assisL in Lhe developnenL of a
biodiesel indusLry. 1he iniLiaLives should encourage producLion, consunpLion,
and Lechnology developnenL, and consider inLer-provincial and inLernaLional
Lrade requirenenLs.
Progran and policy developnenL should be given Lhe following objecLives
and goals:
1. Encourage and enable prinary producer parLicipaLion in biodiesel projecLs.
2. Encourage and enable rural, connuniLy-based biodiesel projecLs.
3. Encourage all governnenL fleeLs Lo use biodiesel.
4. Encourage all conLracLs Lendered by all levels of governnenL Lo include Lhe
use of biodiesel where appropriaLe.
5. Encourage Lax crediLs or capiLal assisLance prograns for invesLnenLs inLo a
biodiesel indusLry.
Recommendation #4
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan, wiLh Lhe
supporL of Lhe CovernnenL of Canada, supporL connunicaLion and public
awareness acLiviLies LargeLed aL Lhe producLion, disLribuLion, and consunpLion
of biodiesel including conferences, workshops, denonsLraLions, nedia acLiviLies
and publicaLions.
Recommendation #5
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan call upon
Lhe CovernnenL of Canada Lo fund research and LesLing in supporL of biodiesel
sLandard developnenL for blends 81 Lo 85, and 8 Lo 820 blends of biodiesel
wiLh ulLra low sulphur diesel (LSD). 1his would include:
OxidaLion sLabiliLy
Cold flow properLies
lleeL LesLing
AddiLive inLeracLion
PeLroleun species inLeracLions
1he 1ask lorce sLrongly supporLs Lhe developnenL of perfornance-based
sLandards LhaL are feed sLock neuLral, faciliLaLe leasL-cosL biodiesel producLion and
disLribuLion, and proLecL Lhe reliabiliLy and warranLy requirenenLs of Lhe consuner.
Recommendation #6
1he 1ask lorce reconnends LhaL all biodiesel sold neeLs approved Canadian
biodiesel sLandards and be cerLified. 1he 1ask lorce also reconnends LhaL Lhe
CovernnenL of SaskaLchewan ask Lhe CovernnenL of Canada Lo esLablish a nulLi-
year progran LhaL would help biodiesel producLion and disLribuLion conpanies
neeL sLandards by providing funding for LesLing of biodiesel and biodiesel blends.
Recommendation #7
1he 1ask lorce reconnends LhaL boLh Lhe CovernnenL of SaskaLchewan and
Lhe CovernnenL of Canada evaluaLe and supporL LiniLed LiabiliLy CorporaLions
and oLher poLenLial business sLrucLures LhaL nay faciliLaLe prinary producer
invesLnenL.
Recommendation #8
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan, wiLh Lhe
supporL of Lhe CovernnenL of Canada, develop a NaLional 8io-ProducLs CenLre
locaLed in SaskaLoon, SaskaLchewan. 1his cenLre would conducL and assisL in Lhe
co-ordinaLion of bio-producL research across Canada Lo advance biofuels and bio-
producL developnenL.
Recommendation #9
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan, wiLh
supporL fron Lhe CovernnenL of Canada, conLinue research and developnenL,
connercializaLion of new producLs, developnenL of new plaLforn crop varieLies,
and expansion, developnenL and connercializaLion of Lhe co-producLs and
by-producLs fron a biodiesel indusLry. 1he 1ask lorce also reconnends LhaL a
WesLern Canadian energy and greenhouse gas life cycle analysis be conducLed
according Lo inLernaLional sLandards.
Recommendation #10
1he 1ask lorce reconnends LhaL Lhe CovernnenL of SaskaLchewan, in co-
operaLion wiLh appropriaLe sLakeholders, evaluaLe opLions Lo encourage Lhe
developnenL of a biodiesel blending and disLribuLion sysLen in SaskaLchewan
LhaL will benefiL prinary producers, biodiesel producers, rural connuniLies, Lhe
fuel indusLry, and consuners. 1his could include prograns for capiLal incenLives,
co-operaLive narkeLing, disLribuLion, and infrasLrucLure.
SaskaLchewan, being cenLrally locaLed in Canada, is in an excellenL posiLion Lo
be a key sLakeholder in boLh Lhe developnenL and producLion of a biodiesel
indusLry. 1his province has 43 per cenL of Lhe counLry's arable acres, diversiLy
in crops, crushing capabiliLies, and Lhe infrasLrucLure Lo develop a susLainable
biofuel indusLry. SaskaLchewan has been a leader in Lhe developnenL of Lhe
eLhanol indusLry, and should be a key sLakeholder aL Lhe provincial and naLional
working group level for Lhe developnenL of a biodiesel indusLry. 1he 1ask lorce
believes Lhey have a conLinued role Lo play wiLh all levels of governnenL in Lhe
biofuel inplenenLaLion sLraLegy.
3.0 tODtSL
3.1 tntroduction
8iodiesel is a clean burning, biodegradable, non-Loxic alLernaLive fuel produced
fron renewable resources (aninal faLs and planL oils) LhaL can be blended wiLh
peLroleun diesel Lo creaLe a biodiesel blend.
8iodiesel is referred Lo as 8XX where Lhe XX represenLs Lhe percenLage of
biodiesel. lor exanple, 85 indicaLes five per cenL biodiesel and 5 per cenL
peLroleun diesel.
figure 1: fieId to fueI
Source: CanoIa CounciI of Canada
1he process of Laking oil and converLing iL inLo a neLhyl-esLer (or eLhyl-esLer) is
referred Lo as LransesLerificaLion, or Lhe LransfornaLion of one forn of an esLer
inLo anoLher. One of Lhe nain challenges of using sLraighL vegeLable oil as fuel is
LhaL iL is Lhicker or nore viscous Lhan peLroleun diesel because iL conLains abouL
10 per cenL glycerine.
During Lhe process, alcohol (generally neLhanol), is added Lo produce neLhyl-
esLer. 1he faLLy acid chains aLLach Lo Lhe alcohol nolecules, naking Lhe esLers
Lhinner. Once Lhe glycerine is separaLed, Lhe alkyl-esLer chains are referred Lo as
biodiesel.
1he process also requires a caLalysL Lo iniLiaLe Lhe chenical reacLion. 1he Lwo
nain caLalysLs used are sodiun hydroxide (NaOH), connonly referred Lo as lye,
and poLassiun hydroxide (KOH).
One liLer of oil nakes abouL one liLre of biodiesel. 1he co-producL, glycerine, can
be sold for furLher refining and nade inLo producLs such as propylene glycol or
various pharnaceuLical producLs.
A bionass Lo liquid fuel process is currenLly being researched. Here, woody
feed sLock or whole planL is firsL gasified and Lhen processed inLo high-qualiLy
synLheLic gas which can be converLed inLo an advanced bio-conponenL for
use in diesel. 1his Lechnology sLill needs Lo prove LhaL iL can be scaled up for
connercial operaLion. leed sLock logisLics and environnenLal inpacLs also need
Lo be addressed.
3.1.1 nvironmentaI tmpact
8iodiesel has poLenLial as a donesLically produced, renewable alLernaLive fuel
or fuel supplenenL LhaL subsLanLially reduces carbon nonoxide, hydrocarbons,
parLiculaLe naLLer and CHC enissions.
SaskaLchewan EnvironnenL is leading Lhe developnenL of a Creen SLraLegy for
a green and prosperous SaskaLchewan. ConsulLaLions on Lhe Creen SLraLegy
have indicaLed supporL for renewable fuels, including biodiesel. 1he final Creen
SLraLegy is expecLed Lo describe a nunber of opporLuniLies relaLed Lo renewable
fuels and reducLion of greenhouse gas enissions. lL is also anLicipaLed LhaL Lhe
8iodiesel 1ask lorce resulLs will guide fuLure opporLuniLies for biodiesel. kelease
of Lhe final Creen SLraLegy, based on public inpuL and a review of besL pracLices,
is expecLed Lo occur in 200.
3.1.2 enefits
Pure biodiesel has low aquaLic LoxiciLy and is conpleLely biodegradable in
approxinaLely 30 days. 1he value of biodegradabiliLy depends on locaLion
of use. 8iodegradabiliLy nay be highly valued in environnenLally sensiLive
areas or around bodies of waLer. lor exanple, 100 per cenL biodiesel nighL be
considered as a nandaLe for Canadian parks. A policy recognizing Lhe value of
biodegradabiliLy nighL pronoLe Lhe use of biodiesel in specific circunsLances.
However, iL will sLill be inporLanL Lo look aL Lhe cosL of alLernaLives, such as
avoiding Lhe use of diesel or gasoline noLors in sensiLive environnenLs. When
biodiesel is blended wiLh regular diesel fuel, biodegradaLion is acceleraLed Lo
abouL Lhree Lines Lhe nornal raLe of diesel fuel.
8iodiesel use can also be jusLified as a way Lo reduce CHC enissions, air
polluLion, spill inpacLs, and explosion risks. Processing oil and faL wasLes Lo
produce biodiesel even recycles wasLe producLs. 1he cosLs and benefiLs of co-
producLs nusL be included in a conpleLe life cycle analysis.
rban areas where air polluLion issues are a concern would realize opLinun
benefiLs fron Lhe use of biodiesel fuel blends. Also, biofuel's lower enissions nake
iL suiLable for use in confined areas, such as nines, where venLilaLion is a concern.
3.1.3 Life CycIe AnaIysis and missions tmprovement
Life cycle analysis has deLernined LhaL peLroleun diesel has higher carbon
dioxide and carbon nonoxide enissions Lhan biodiesel. 8iodiesel has niLrogen
oxide enissions LhaL are generally equal Lo Lhose of peLroleun diesel or higher.
When Lhese enissions are aggregaLed using global warning poLenLials, Lhere
is a neL reducLion in CHC enissions when swiLching fron peLroleun diesel Lo
biodiesel. 1he anounL of enission reducLion depends on Lhe Lype of feed sLock
and Lhe biodiesel blend, as shown in 1able 1. Aninal faL biodiesel provides nore
CHC benefiLs Lhan biodiesel produced fron planL feedsLocks. However, biodiesel
provides inporLanL clinaLe niLigaLing benefiLs in all circunsLances.
TabIe 1: GHG missions Reductions: RepIacing PetroIeum DieseI with iodieseI
( reduction GHG emission vs. petroIeum dieseI)
8iodiesel 8lend Canola 8iodiesel Soy 8iodiesel Aninal laL
8iodiesel
82 1.2% 1.2% 1.8%
820 12.4% 12.3% 17.8%
8100 3.7% 3.1% 1.7%
Source: LeveIton and S&T (2002)
3
in van Kooten and entez (2005)
4
A life cycle analysis for WesLern Canada has noL been conducLed. However, Lhe
.S. DeparLnenLs of Energy (DOE) and AgriculLure (SDA) conducLed a sLudy in
18 on Life Cycle lnvenLory of Soybean 8iodiesel (18)
5
. 1he sLudy conpared
findings for a conprehensive "cradle Lo grave invenLory of naLerials used,
energy resources consuned, and air, waLer, and solid wasLe enissions generaLed
by peLroleun diesel fuels and biodiesel in order Lo conpare Lhe LoLal "life
cycle cosLs and benefiLs of each of Lhe fuels. ln 2002, Lhe .S. EnvironnenLal
ProLecLion Agency conpleLed a sLudy LhaL supporLed Lhe previous findings.
TabIe 2: Overview of missions for 100 iodieseI
Compound Percentage (decrease or increase)
Carbon dioxide 78 (decrease)
ParLiculaLe MaLLer 32 (decrease)
1ailpipe enissions 8 (decrease)
Sulphur oxides 8 (decrease)
MeLhane 3 (decrease)
NiLrogen oxides 13 (increase)
Hydrocarbons 35 (decrease)
(Source: USDO and USDA)
1he reporL also sLaLed LhaL biodiesel and peLroleun diesel have very sinilar
energy efficiencies. 8iodiesel yields 3.2 uniLs of fuel producL for every uniL of
fossil energy. WasLe waLer is reduced by 7 per cenL and hazardous wasLes by
per cenL. However, biodiesel generaLed non-hazardous wasLes Lwice as nuch as
peLroleun diesel.
3.2 iodieseI as a fueI ~ uaIity and ngine Performance
(Thc lollowing inlormdtion i: rcprintcd with pcrmi::ion lrom thc Covcrnmcnt ol
Mdnitobd': 8iodic:cl Advi:ory Council.)
8iodiesel can be used in iLs pure forn (100 per cenL) as a subsLiLuLe for diesel
fuel. AlLernaLively, iL can be blended aL any level wiLh peLroleun Lo creaLe
a biodiesel blend. ln Lhe .S., Lhe nosL connon blend is 820 (20 per cenL
biodiesel, 80 per cenL peLroleun) buL Lhere are also areas where a 82 (2 per cenL
biodiesel, 8 per cenL peLroleun) fuel is being narkeLed.
3.2.1 uaIity of Canadian DieseI fueI
1he ceLane nunber is a neasure of Lhe igniLion qualiLy of diesel fuel and
influences conbusLion characLerisLics. Higher ceLane-nunber fuels are known Lo
give beLLer perfornance in aspecLs like enissions, noise and cold whiLe snoke
generaLion. As a rule, all forns of biodiesel have higher ceLane values Lhan Lhose
of convenLional, peLroleun-based diesel.
ln Canada, no federal regulaLed requirenenLs exisL for ceLane nunber or ceLane
index. However, Lhe Canadian Ceneral SLandards 8oard (CCS8) specificaLion for
boLh regular and low-sulphur diesel fuel is, aL nininun, a ceLane nunber of 40.
1he specificaLion for diesel fuel used in loconoLives can be lower.
8ased on worldwide annual fuel surveys, .S. and Canadian diesel fuels have
a significanLly lower ceLane nunber Lhan nosL diesel fuels. lL's also inporLanL
Lo noLe LhaL currenLly, in Canada, on-road diesel fuel is regulaLed, buL off-road
diesel fuel is noL.
Low-sulfur diesel's currenL Sulphur in Diesel luel kegulaLions require LhaL Lhe
concenLraLion of sulphur in diesel fuel produced, or inporLed for use in on-road
vehicles, does noL exceed 500 ppn before May 31, 200, and 15 ppn afLer May
31, 200. Diesel fuel sold in Lhe norLhern supply area should noL exceed 15 ppn
afLer AugusL 31, 200.
3.2.2 Lubricity
Since Lhe inLroducLion of low-sulphur diesel fuel in Lhe 10's, considerable
efforLs have been nade by Lhe auLonoLive indusLry, end users and Lhe peLroleun
indusLry, Lo address Lhe lubriciLy requirenenLs of diesel fuel. 1he processes used
Lo reduce Lhe sulphur conLenL in diesel fuel also renove oLher elenenLs, like
niLrogen conpounds, LhaL provide sone fuel lubriciLy. 1he sulphur conLenL of
diesel fuel will be declining again in 200 and Lhere is sone concern Lhe lubriciLy
problens nay increase.
luel lubriciLy can be increased by adding convenLional addiLives Lo Lhe fuel. AL
Lhe sane Line, Lhe addiLion of biodiesel, which has excellenL lubriciLy properLies,
is being pronoLed as a neans Lo address poLenLial problens.
3.2.3 CoId fIow and CIoud Points
ser experience wiLh cold weaLher varies. 820 blends are used in sone very cold
clinaLes, such as norLhern MinnesoLa and Wyoning, where LenperaLures can fall
below -40 C in Lhe winLer.
Pour poinL, Lhe LenperaLure poinL above which Lhe fuel will pour, is inporLanL
because iL direcLly affecLs Lhe use of Lhe fuel in colder clinaLes. 1he high-pour
poinLs of nany biodiesels significanLly liniL Lheir use in pure forn in cold
weaLher. Even Lhough Lhe blends show nuch beLLer pour-poinL LenperaLures aL
lower concenLraLions, handling Lhe pure biodiesel, before nixing, will require
insulaLion and heaLed Lanks Lo ensure Lhe liquid can be noved prior Lo nixing.
8iodiesel can be splash blended on Lop of peLroleun diesel, or if boLLon loading
is used, Lhe biodiesel should be added firsL, Lhen adding Lhe diesel fuel will
provide Lhe required agiLaLion. ln nany cases, biodiesel is splash blended eiLher
on-farn or aL Lhe disLribuLor level. Sone larger fleeLs blend Lhe bio porLion aL
Lheir own disLribuLion Lerninals.
(SaskaLchewan 8iodiesel 1ask lorce noLe: 1he pour poinL barrier is dependenL on
feed sLock used and Lhe percenLage blend of biodiesel used. ConsideraLion nusL
be given when blending biodiesel in cold environnenLs.)
TabIe 3: Pour Point ResuIts C
iodieseI
Concentration Soy CanoIa Lard
dibIe
TaIIow
tnedibIe
TaIIow
LffA
YeIIow
Grease
HffA
YeIIow
Grease
0% -27 -27 -27 -27 -27 -27 -27
0.25% -27 -21 -24 -24 -24 -24 -24
0.50% -27 -24 -24 -24 -24 -24 -24
1% -24 -24 -24 -21 -24 -24 -24
3% -24 -24 -21 -21 -21 -21 -21
5% -21 -21 -18 -18 -15 -18 -18
10% -18 -21 -15 -12 -12 -18 -18
20% -18 -18 - - - - -12
35% -15 -18 0 - -2 - -
50% - -15 3 3 3 0 -3
100% -1 -4 11 13 8 12 8
(Source: S&T
3
ConsuItants)
1he cloud poinL of diesel fuel is an inporLanL neasure because iL's Lhe
LenperaLure aL which conponenLs of Lhe fuel begin Lo crysLallize, forning a
visible clouding of Lhe liquid. When circulaLing in Lhe fuel sysLen, Lhe conponenLs
LhaL produce Lhe clouding can be capLured in filLers, or cause conponenLs Lo
wear, due Lo Lhe solidificaLion of Lhe lubricanLs. 1he cloud poinL exhibiLs a larger
increase aL low concenLraLions of biodiesel, buL Lo a lesser exLenL Lhan Lhe pour
-poinL LesLs. 1he cloud poinL resulLs are shown in Lhe following Lable.
TabIe 4: CIoud Point ResuIts C
iodieseI
Concentration Soy CanoIa Lard
dibIe
TaIIow
tnedibIe
TaIIow
LffA
YeIIow
Grease
HffA
YeIIow
Grease
0% -18 -18 -18 -18 -18 -18 -18
0.25% -20 -18 -18 -1 -1 -15 -18
0.50% -17 -18 -17 -1 -17 -14 -15
1% -1 -18 -17 -15 -17 -1 -15
3% -1 -17 -1 -13 -14 -1 -15
5% -1 -17 -15 -12 -13 -1 -14
10% -15 -17 -14 - -10 -13 -13
20% -12 -15 -3 -2 - - -8
35% - -12 -3 0 0 5 -
50% - -10 -2 3 4 13 -3
100% 2 -3 14 20 23 42 8
(Source: S&T
3
ConsuItants)
3.2.4 fueI fficiency
Engine power and Lorque are very sinilar wiLh biodiesel and peLroleun diesel,
especially in Lhe lower blends. 1he perfornance of 100 per cenL biodiesel nay be
slighLly lower Lhan Lhe peLroleun diesel due Lo Lhe lower energy conLenL.
8ecause biodiesel conLains oxygen, iL has abouL an eighL per cenL lower energy
conLenL Lhan peLroleun diesel by weighL. However, Lhe specific graviLy of
biodiesel is abouL 4 per cenL higher Lhan peLroleun diesel, which conpensaLes
for sone of Lhe lower energy conLenL.
1he voluneLric fuel econony is abouL 4 per cenL less for 8100. WiLh a 820
blend, Lhe difference in nileage will be less Lhan 1 per cenL and probably noL
noLiceable.
3.2.5 UItra-Low SuIphur DieseI/New ngine TechnoIogy
1here are pending changes in Canadian diesel fuel regulaLions LhaL are
inporLanL Lo poLenLial biodiesel nanufacLurers. WiLh Lhe excepLion of a norLhern
supply area, Lhe Canadian Sulphur in Diesel luel kegulaLion specifies LhaL Lhe
concenLraLion of sulphur in diesel fuel produced, or inporLed for use in on-road
vehicles, should noL exceed 500 ng}kg up Lo May 31, 200 and 15 ng}kg afLer
Lhis daLe. A Lhree-nonLh LransiLion period gives nanufacLurers unLil AugusL 31,
200 Lo conply wiLh Lhe regulaLion.
AL presenL, Lhe Canadian Ceneral SLandards 8oard (CCS8) only specifies a
volunLary liniL for sulphur in diesel fuel for off-road vehicles and engines (of
5000 ppn). EnvironnenL Canada, however, has sLaLed plans Lo reconnend a
regulaLory liniL for off-road diesel fuel wiLhin Lhe sane Line frane planned by
Lhe .S. EnvironnenL ProLecLion Agency (EPA).
3.2.6 CompatibiIity with ngines
8iodiesel can be operaLed in any diesel engine wiLh liLLle or no nodificaLion Lo
Lhe engine or Lhe fuel sysLen. lL has a solvenL effecL LhaL nay release deposiLs
accunulaLed on Lank walls and pipes fron previous peLroleun diesel fuel
sLorage. 1he release of Lhese deposiLs nay clog filLers iniLially, so precauLions
should be Laken. One such precauLion nay require Lhe changing of fuel filLers,
since biodiesel acLs as a solvenL and Lends Lo clean ouL fuel lines and deposiL
residue in Lhe fuel filLer.
8oLh Lhe European nion and Lhe niLed SLaLes' Anerican SocieLy of 1esLing and
MaLerials (AS1M) have sLandards in place Lo ensure Lhe qualiLy of biodiesel in
Lhose jurisdicLions. 1he Canadian Ceneral SLandards 8oard (CCS8) has recenLly
drafLed a sLandard for biodiesel blends of up Lo 5 per cenL. 1he Canadian
sLandard is expecLed Lo be passed in 2005.
ln 2004, Lhe NaLional 8iodiesel 8oard announced Lhe 8Q 000 progran,
which conbines Lhe AS1M sLandard wiLh a qualiLy sysLens progran LhaL
includes sLorage, sanpling, LesLing, blending, shipping, disLribuLion and
fuel nanagenenL. AccrediLaLion under Lhe 8Q 000 progran is open Lo all
conpanies LhaL acLively (or inLend Lo) produce, disLribuLe or narkeL biodiesel.
3.2.7 Warranties ~ tndustry Statements
ln 2002, Lhe Engine ManufacLurers AssociaLion (EMA) issued a new posiLion paper
n Lhe use of biodiesel, replacing an earlier one published in 15. 1he EMA is
an inLernaLional organizaLion represenLing Lhe inLeresLs of Lhe nanufacLurers of
inLernal conbusLion engines. lLs posiLion on Lhe use of biodiesel is:
8d:cd on currcnt undcr:tdnding ol biodic:cl lucl: dnd blcnding with pctrolcum bd:cd
dic:cl lucl, MA mcmbcr: cxpcct thdt blcnd: up to d mdximum ol 8S :hould not
cdu:c cnginc or lucl :y:tcm problcm:, providcd thc 8J00 u:cd in thc blcnd mcct: thc
rcquircmcnt: ol ASTM D 67SJ, D|N SJ606, or N J42J4. |l blcnd: cxcccding 8S
drc dc:ircd, vchiclc owncr: dnd opcrdtor: :hould con:ult thcir cnginc mdnuldcturcr:
dbout thc implicdtion: ol u:ing :uch lucl.
1he EMA nakes Lhe following sLaLenenL abouL warranLies:
nginc mdnuldcturcr: drc lcgdlly rcquircd to providc dn cmi::ion: wdrrdnty on thcir
product: (which drc ccrtilicd to lA': dic:cl lucl :pccilicdtion) dnd, typicdlly, dl:o
providc commcrcidl wdrrdntic:. |ndividudl cnginc mdnuldcturcr: dctcrminc whdt
implicdtion:, il dny, thc u:c ol biodic:cl lucl hd: on thc mdnuldcturcr:' commcrcidl
wdrrdntic:. |t i: unclcdr whdt implicdtion: thc u:c ol biodic:cl lucl hd: on cmi::ion:
wdrrdnty, in-u:c lidbility, dnti-tdmpcring provi:ion:, dnd thc likc. morc inlormdtion i:
nccdcd on thc impdct: ol long-tcrm u:c ol biodic:cl on cnginc opcrdtion:.
Mdny mdjor cnginc compdnic: hdvc :tdtcd lormdlly thdt thc u:c ol blcnd: up to
820 will not void thcir pdrt: dnd workmdn:hip wdrrdntic:. Thi: rclcr: to blcnd:
bclow 20 pcr ccnt biodic:cl, :uch d: thc 2 pcr ccnt biodic:cl blcnd: thdt drc
bccoming common in :omc pdrt: ol thc U.S.
WarranLy infornaLion regarding biodiesel conLinues Lo be updaLed as nore
knowledge is gained on Lhe effecLs of biodiesel on nodern diesel engines.
3.3 GIobaI DeveIopment of iodieseI
ln 2005, higher cosLs of energy and Lhe fuLure supply of fossil fuels for Lhe
world's energy-denanding econonies were global concerns. lL appears LhaL
Lhe general public accepLs LhaL energy cosLs will conLinue Lo rise. 1he fuLure
of Lhe indusLry will be in finding alLernaLives for fossil fuels. While eLhanol and
biodiesel will noL replace fossil fuels, Lhey can displace a porLion and provide a
soluLion Lo a liniLed world fuel supply. Chairnan of Lhe AusLrian 8iofuel lnsLiLuLe
Werner KoerbiLz has sLaLed LhaL biodiesel can replace an esLinaLed 10 per cenL of
peLroleun diesel worldwide
.
1he world faces a huge challenge, given Lhe dependence on and appeLiLe for
oil, and is now faced wiLh finding new sources of energy. 1hese new sources
nay noL cosL less Lhan Lheir convenLional counLerparLs, buL Lhey nusL provide
environnenLal benefiLs. Many developed counLries, such as Lhe nenber
counLries of Lhe European nion (E) and Lhe .S., are neL inporLers of oil and
wanL Lo be less relianL on foreign inporLs. Canada is nore forLunaLe in LhaL iL is
a neL exporLer of fuel. AfLer AlberLa, SaskaLchewan is Lhe second najor exporLer
of oil wiLh 70 per cenL of sales going Lo Lhe .S., according Lo SaskaLchewan
lndusLry and kesources.
OLher inLernaLional jurisdicLions have been producing and using biodiesel for
nuch longer Lhan Canada. Europe, prinarily Cernany, has been Lhe leader
in Lhe developnenL of a biodiesel indusLry, which is driven by environnenLal
concerns, Lhe need Lo be less dependenL upon foreign oil, high fuel prices, and
benefiLs Lo rural developnenL and prinary producers. 1he .S. is Lhe second
largesL producer of biodiesel. lniLially, developnenL was driven by Anerican
soybean producers looking for an alLernaLe narkeL for Lheir crop. More recenLly,
Lhe drivers include "honeland securiLy and Lhe desire Lo decrease dependency
on foreign oil. Many oLher counLries, such as 8razil, are developing biodiesel
indusLries. However, Lhe 1ask lorce has prinarily looked aL Lhe E.. because Lhey
are Lhe leaders in using rapeseed (sinilar Lo canola) for biodiesel, and Lhe .S.
because Lhey are our najor NorLh Anerican Lrading parLner.
3.3.1 uropean Union
8iodiesel producLion has expanded subsLanLially in Lhe pasL 10 years. 1he
European 8iodiesel 8oard reporLs LhaL Europe produced 3.4 billion liLres of
biodiesel in 2005. ProducLion is expecLed Lo double in 200.
figure 2: uropean iodieseI Production
Source: uropean iodieseI oard
While Lhe biodiesel indusLry has nade subsLanLial gains, Lhe iniLial enLry inLo
Lhe narkeLplace was exLrenely difficulL due Lo Lhe lack of sLandards, and Lhe
price was relaLively high in conparison wiLh diesel fuel. 1wo facLors assisLed
Lhe developnenL. ln 12, changes nade Lo Lhe European nion's Connon
AgriculLure Policy esLablished a 10 per cenL seL-aside progran of arable land
for growing crops for indusLrial uses. 1he second facLor was Lhe creaLion of a
biodiesel sLandard Lo ensure qualiLy producL was sold.
lron 1 Lo 2002, biodiesel producLion in Lhe E increased four-fold Lo a LoLal
of 2.2 nillion liLres.
7
A furLher increase occurred as a resulL of Lhe E iniLiaLive Lo
pronoLe biofuels and Lo anend nineral oil laws aL Lhe naLional level. ln 2003,
Lhe European Connission adopLed Lhe DirecLive for Lhe PronoLion of 8iofuels
which calls for Lhe use of biofuels Lo increase Lo Lwo per cenL by 2005, and 5.75
per cenL by 2010. 1his is noL an agriculLure direcLive buL an energy direcLive, as a
resulL of Lhe conniLnenL Lo reducing CHC enissions under Lhe KyoLo ProLocol.
According Lo Werner KoerbiLz, Lhe E will need a nininun of 13 billion liLres of
biodiesel by 2010 Lo neeL Lhe DirecLive.
1he AcLion Plan
8
Lo achieve Lhe goals of Lhe DirecLive seL ouL by Lhe E
Connission includes:
1. LegislaLion Lo increase Lhe nininun conLenL of biodiesel in convenLional
diesel fron five Lo 10 per cenL.
2. AccounLing Lhe CO
2
savings fron biofuel use Lowards neeLing Lhe E official
vehicle indusLry LargeLs.
3. lnplenenLing a 25 per cenL procurenenL for clean energy vehicles in Lhe
public secLor.
4. luLure sLandardizaLion and narkeLing of laLLy Acid ELhyl EsLer (lAEE).
5. A balanced approach Lo inporLs of biofuels and Lheir raw naLerials.
. A proposed E nandaLory LargeL for biofuels.
Each nenber counLry is expecLed Lo neeL Lhe DirecLive. However, Lhere are
narkeLing differences beLween nenbers. While nany counLries narkeL biodiesel
as an addiLive Lo diesel fuel, Cernany and AusLria narkeL 8100. However, wiLh new
policies LhaL elininaLe nineral Laxes on biodiesel blends, Lhis has changed.
lron Lhe early 10s, Lhe nineral oil Lax was increased Lo finance Lhe sLaLe
pension plan. 1his was Lhe highesL oil excise Lax in Europe. ln |anuary 2004,
8100 was sold by perniLLed nanufacLurers aL Lhe punp well under Lhe price
of peLroleun diesel. 1his legislaLion will expire in 200. 1he iniLial legislaLion
allowed for only 8100, buL was anended on |anuary 2005 Lo include a biofuel
porLion of blended fuel. CurrenLly, Lhe exenpLions work ouL Lo be 0.47}liLre
($CDN0.}liLre).
Cernany
has been Lhe leader in biodiesel developnenL wiLh Lhe creaLion of

a sLable invesLnenL clinaLe. WiLh Lhe 2003 DirecLive by Lhe E, Lhe Cernan
governnenL decided Lo use subsidies raLher Lhan quoLas Lo supporL Lhe biodiesel
indusLry. 1he prograns developed were so successful LhaL Lhe Cernan governnenL
is currenLly looking aL reducing Lhese biodiesel subsidies. OLher nenber counLries
used quoLas which were noL as effecLive in aLLracLing invesLnenL.
1he key farn organizaLion lobbying for biodiesel in Cernany is Lhe Cernan
nion for Lhe PronoLion of Oil and ProLein PlanLs (lOP), a group wiLhin Lhe
Cernan larner's AssociaLion. 1heir goal is Lo ensure LhaL Cernan prinary
producers parLicipaLe in Lhe producLion of biofuels. 1he Lax exenpLion ensured
rapeseed was noL cosL-prohibiLive and LhaL biodiesel sLandards which favoured
rapeseed neLhyl-esLer (kME) deLerred accepLance of oLher feedsLocks.
A new challenge for Lhe Cernan governnenL arose when Lhe E required Lhe
Cernan linance MinisLry Lo supply a reporL on Lhe level of subsidizaLion of
biofuels. 1his reporL was conpleLed in March of 200. lL was deLernined LhaL
Lhe subsidies were in excess and LhaL anendnenLs should be nade. 1here have
been considerable lobbying efforLs by prinary producers Lo nainLain Lhe currenL
level of subsidies.
ln April 200, Lhe price of biodiesel aL Lhe wholesale level ranged fron 0.71}liLre
Lo 0.74}liLre and reLailed for approxinaLely 1.03}liLre. 8100 Lypically sells for
0.10}liLre less Lhan diesel fuel. 1wo-Lhirds of Lhe wholesale price is seL by Lhe
feed sLock price.
leed sLock supply is Lhe liniLing facLor for Lhe conLinued developnenL of Lhe
biodiesel indusLry in Lhe E. ln Lhe firsL quarLer of 200, iL is esLinaLed LhaL
Cernany alone inporLed 0,000 Lonnes of canola oil fron Canada Lo nake
biodiesel and a furLher 150,000 Lonnes of oil fron Lhe .S.
Canadian crushers Archer Daniels Midland (ADM), 8unge, and Cargill are all
involved in Lhe producLion of biodiesel in Europe. Canada will supply sone
canola oil Lo Cernany. Sone of Lhe E crushing planLs have parLnered wiLh
prinary producer groups. lor exanple, 8unge has parLnered wiLh DiesLer
lndusLrie in lrance.
Werner KoerbiLz has indicaLed LhaL Lhe biodiesel indusLry in Lhe E is in LransiLion.
1he E was using 8100, which was approved by Lhe original engine nanufacLurers
who provided warranLies for 8100 (rapeseed neLhyl esLer) in Lheir engines. WiLh Lhe
pressure Lo neeL direcLives, Lhe E is inporLing biodiesel, including soybean and
paln Lhe laLLer aL lower prices. 1his nay have an effecL on Lhe original approvals.
As well, sinilar Lo Lhe NorLh Anerican auLo indusLry, Lhe E is inLroducing a new
series of engine Lhe Euro 4. 1esLing for biodiesel use will be required.
3.3.2 United States
DevelopnenL of Lhe biodiesel narkeL and producLion capaciLy in Lhe .S. has
been Lhe resulL of a nunber of inporLanL facLors. lirsL, incenLives direcLed aL
Lhe indusLry have enabled biodiesel Lo be nore price-conpeLiLive in a high oil
price environnenL, resulLing in greaLer narkeL accepLance. Second, sone sLaLes
have adopLed, or are looking Lo adopL, biodiesel nandaLes Lo spur producLion
and consunpLion. 1hird, biodiesel has been accepLed inLo Lhe peLroleun diesel
disLribuLion sysLen. 1his is a fragnenLed sysLen wiLh a large nunber of arns-
lengLh refiners, disLribuLors, and reLailers who see biodiesel as a poLenLial neans
Lo increase narkeL share or profiLabiliLy by offering a differenLiaLed producL.
On AugusL 8, 2005, PresidenL 8ush's announcenenL of a kenewable luel SLandard
(klS) of 2 billion liLres of biofuel by 2012, along wiLh Lhe Lax crediLs, denonsLraLed
his conniLnenL Lo biofuels. 1he klS sLarLed in 200 aL 15 billion liLres. ELhanol
is Lhe prinary focus. lL is sLill unclear how biodiesel will fiL and whaL will drive Lhe
econony Lo reach Lhese LargeLs. 1ax crediLs are available and have helped Lo drive
Lhe biodiesel indusLry Lo daLe. 1he 8lender's 1ax CrediL aL S$1.00}gallon (abouL
S$0.30}liLre) for agri-biodiesel was a najor facLor LhaL spurred Lhe Lrenendous
growLh in Lhe producLion of biodiesel in 2005, as illusLraLed in ligure 3 (page 24).
lron 1 Lo 2005, Lhe denand for biodiesel in Lhe .S. expanded fron roughly
Lwo nillion liLres annually Lo approxinaLely 288 nillion liLres. However, during
Lhis period, producLion capaciLy growLh has far exceeded denand. As of May
200, 5 conpanies have builL biodiesel planLs wiLh a LoLal producLion capaciLy
of approxinaLely 1.5 billion liLres per year.
As of May 18, 200, AlLernaLive luels lndex reporLed LhaL 8100 was selling on
average aL S$3.3740}gallon, 82 was aL S$2.2057}gallon, and S$2.1814}
gallon for Nunber 1wo Diesel.
figure 3: stimated U.S. iodieseI Production
Source: NationaI iodieseI oard
AnoLher 50 conpanies reporL having biodiesel producLion planLs under consLrucLion,
expecLed Lo be conpleLed wiLhin Lhe nexL 18 nonLhs. AddiLionally, eighL exisLing
planLs reporL inLenLions Lo expand. 1hese new faciliLies and expansions would equaLe
Lo a furLher producLion capaciLy of 2.75 billion liLres annually. AnoLher 3 conpanies
reporL being in a pre-consLrucLion phase. 1hese faciliLies are esLinaLed Lo have a
conbined LoLal producLion capaciLy of approxinaLely 2. billion liLres.
Of Lhe 5 exisLing planLs, 35 reporLed producLion using soybean oil, 1 on
nulLiple feedsLocks, one on canola oil, six on recycled cooking oil, and one on
Lallow. lour faciliLies did noL reporL a feed sLock basis. Of Lhe 58 planLs under
consLrucLion or expansion, 25 will use soybean oil, 18 nulLiple feedsLocks, one
canola oil, six recycled cooking oil or Lrap grease, one yellow grease, one poulLry
faL, and one canolina oil. live planLs did noL reporL a feed sLock source. 8oLh
exisLing and proposed biodiesel planLs are concenLraLed nainly in Lhe soybean
producing regions of Lhe .S.
Civen Lhe currenL capaciLy, planLs under consLrucLion, and planLs Lo be
consLrucLed, LoLal annual biodiesel producLion capaciLy in Lhe .S. could
conceivably grow Lo nore Lhan seven billion liLres wiLhin Lhe nexL few years.
luLure supply for biodiesel nay exceed denand, and exporL narkeLs nay be
needed Lo address excess capaciLy.
Proposed canola based biodiesel planLs in Lhe norLhern .S. are of parLicular inLeresL
Lo WesLern Canadian canola producers. ADM is consLrucLing a 32 nillion liLre
planL aL velva, NorLh DakoLa, and will need one nillion acres of canola. 1hey expecL
Lo inporL canola seed fron Canada due Lo a liniLed supply of canola in Lhe .S.
3.3.3 Canada
1he biodiesel indusLry in Canada has a loL of "caLching up Lo do. ln 200, Lhere
will be approxinaLely 100 nillion liLres of biodiesel producLion capaciLy, wiLh a
nunber of biodiesel planLs announced in easLern and wesLern Canada. ln Lhe
easL, 8lOX in HanilLon and koLhsay, a division of Maple Leaf loods in ville SLe.
CaLherine, use nainly recycled cooking oil and aninal faL for biodiesel. Such
sources provide a cheaper feed sLock, which represenLs abouL 70 per cenL of Lhe
cosL of producLion.
CurrenLly, very liLLle biodiesel is produced on Lhe prairies, including SaskaLchewan.
Milligan 8io-1ech lnc. aL loan Lake, SaskaLchewan announced iL will sLarL
producing biodiesel by nid 200. 1he planL, which will use canola as feed sLock,
will have producLion capabiliLies fron 30,000 Lo 50,000 liLres of biodiesel per day.
Aside fron Lhe four cenL per liLre federal exenpLion on Lhe excise Lax on
biodiesel, SaskaLchewan does noL have biodiesel Lax incenLives. 8riLish Colunbia,
ManiLoba and OnLario have renoved provincial Laxes on biodiesel.
3.3.3.1 Saskatchewan iodieseI Producers
Milligdn 8io-Tcch |nc.
Milligan 8io-1ech lnc. (M81l), locaLed in loan Lake, SaskaLchewan, was
incorporaLed in 1. M81l sLarLed when Lhe loan Lake MarkeLing Club, a
group of local prinary producers, sponsored a public neeLing in Lhe early 10s
Lo discuss Lhe possibiliLy of a biodiesel producLion faciliLy. ApproxinaLely 15
enLrepreneurs decided Lo furLher explore Lhe poLenLial of a biodiesel indusLry.
loan Lake, like nany rural connuniLies, had felL Lhe pressures of a sluggish
agriculLural econony. 1he poLenLial Lo be on Lhe leading edge of a new indusLry
was an incenLive LhaL persuaded Lhe group Lo conLinue. PoLenLial benefiLs Lo Lhe
local connuniLy were Lhe enploynenL opporLuniLies and Lhe spin-off effecLs
for local businesses. lor Lhe agriculLural producers, Lhe faciliLy would provide
anoLher narkeLing opporLuniLy for Lheir crops.
M81l's focus has been adding value Lo canola by developing indusLrial uses for
Lhe oil Lhrough joinL efforLs wiLh AgriculLure and Agri-lood Canada (AAlC). 1hey
researched Lhe crushing and processing of off-grade canola seed, which would
poLenLially uLilize heaLed, green, and sanple seed LhaL has very liLLle Lo no value
and a liniLed narkeL.
M81l began producing biodiesel in Lheir piloL faciliLy in 2001. Since Lhen, M81l
has developed various value-added, environnenLally friendly biodiesel co-
producLs Lo furLher enhance Lhe viabiliLy of iLs business. A diesel fuel condiLioner,
peneLraLing oil, and a road dusL suppressanL have been developed. 1esLing and
research inLo all of Lhe producLs has been, and conLinues Lo be, exLensive. 1hese
producLs are now disLribuLed across Canada by a nunber of reLail ouLleLs.
M81l has also focused on and sLressed Lhe need Lo ensure only a qualiLy biodiesel
producL reaches Lhe consuner. ExLensive noniLoring, LesLing and analysis go inLo
every baLch of producL. M81l's goal is noL jusL Lo neeL Lhe Anerican SLandard
1esLing MaLerial (AS1M) sLandard, buL Lo produce a producL LhaL also neeLs Lhe
highesL of sLandards in Lhe world Lhe European SLandard, EN 14214. AL M81l,
qualiLy conLrol is a prioriLy. 1his also needs Lo be an inporLanL conponenL of Lhe
enLire Canadian biodiesel indusLry.
1he biodiesel produced by Milligan has been LesLed by a varieLy of Lhird parLy
agencies, individuals and Provincial CovernnenL lleeLs in a varieLy of end-use
applicaLions. 1he SaskaLoon 8io-8us projecL is likely Lhe nosL widely known. 1his
has provided a wealLh of infornaLion and daLa on Lhe benefiLs of biodiesel Lo
consuners and Lhe environnenL.
ln SepLenber 2005, M81l expanded inLo a larger faciliLy. Oilseed crushing
equipnenL for non-hexane oilseed exLracLion was insLalled and connissioned.
1he engineering design work has begun on phase Lwo, and will use Lhe biodiesel
Lechnology developed wiLh AAlC.
A nunber of connuniLies fron across Canada have expressed inLeresL in
acquiring Lhe Lechnology M81l has developed. 1his has pronpLed Lhe conpany
Lo pronoLe iLs "hub and spoke design. loan Lake would be Lhe cenLral locaLion
where Lhe research, crushing and biodiesel processing would occur, and oLher
siLes would have access Lo Lhe crushing Lechnology by using local seed and local
narkeLs for Lhe neal. 1he exLracLed oil, which is 35 per cenL of Lhe seed weighL,
would be LransporLed back Lo Lhe cenLral "hub and processed inLo biodiesel and
oLher higher value producLs.
M81l's nodel will provide enploynenL and an econonic boosL for
rural connuniLies.
DSC Cdnddd
DSC Canada is a SaskaLoon based conpany specializing in developing
8ioArnour, wiLh Lhe assisLance of Lhe POS PiloL PlanL in SaskaLoon. 8ioArnour
is a fuel addiLive nade fron orienLal nusLard seed and was developed based
on Lhe reconnendaLion of indusLry specialisLs. While canola had already been
proven as a good feed sLock for conversion Lo neLhyl-esLer, nusLard had noL.
However, Lhere were perceived value-added uses of Lhe co-producLs, such as
neal for bio-pesLicides.
DSC producLs are sold LhroughouL Lhe Prairie Provinces, 8riLish Colunbia and
OnLario. DSC is currenLly researching oLher uses and narkeLs LhaL fiL wiLh iLs
producL line. Working wiLh SaskaLchewan's bio-indusLry, DSC found LhaL neLhyl-
esLers could be used for value-added bio-producLs LhaL have posiLive inplicaLions
in agriculLure, nining, foresLry and Lhe oil paLch. Early feedback fron a school
bus sLudy and cusLoners is posiLive, noLing LhaL engines run nore snooLhly,
enissions are noLiceably reduced, and in nosL cases Lhe fuel econony is
inproved.
DSC conducLed a feasibiliLy sLudy on building a piloL producLion planL which
would process neLhyl-esLers for use in iLs producL line. AfLer subsLanLial research,
iL was deLernined LhaL iL was noL feasible aL Lhis Line. DSC is exploring oLher
opLions and poLenLial parLnerships wiLh prinary producer groups Lo produce
biodiesel and oLher high value producLs.
3.3.3.2 ReIated iodieseI tndustries
lcdcock |ndu:tric:
Peacock lndusLries, a conpany siLuaLed 30 ninuLes norLh of SaskaLoon, sLarLed
in 185 wiLh an insecLicide producL called Hopper SLopper. 1he producL found
innediaLe success due Lo a high infesLaLion of grasshoppers. ln 14, Peacock
lndusLries decided Lo refornulaLe Hopper SLopper, which is nade fron nusLard
neal, and changed Lhe acLive ingredienL Lo carbaryl. 1haL year, Peacock
lndusLries conpleLed PMkA regisLraLion for Lhe producL Eco 8ran in Canada. 1wo
years laLer, Lhe conpany conpleLed EPA regisLraLion in Lhe .S. for Eco 8ran. ln
2002, Peacock lndusLries purchased Lhe "De-8ug label and nanufacLuring planL
fron van DiesL Supply Co. in McCook, Nebraska.
Peacock lndusLries is currenLly evaluaLing Lhe poLenLial of using nusLard neal
as a bio-funiganL and soil anendnenL. 1he co-producL, nusLard oil, could
poLenLially be used Lo produce biodiesel.
MCN lroduct:
MCN 8ioProducLs lnc. is a Lechnology conpany processing canola for feed,
food and cosneLics narkeLs. ApproxinaLely 40 per cenL of canola seed is oil.
1he 0 per cenL of Lhe seed renaining afLer crushing and oil exLracLion is known
as canola neal and is sold as a feed ingredienL in aninal nuLriLion narkeLs.
Canola proLein is widely accepLed as a high qualiLy planL based proLein. lL has
an excellenL balance of anino acids, low anLigeniciLy, and Lhe highesL proLein
efficiency raLio of all connercial planL-based sources.
1he naxinun poLenLial of non-oil canola can only be realized Lhrough
fracLionaLion and LargeLed processing, Lechnology MCN is enploying. 1hrough
proprieLary, paLenL-pending processing, MCN fracLionaLes Lhe canola neal inLo
separaLe bioproducL sLreans LhaL are opLinally Lailored Lo end user narkeLs.
MCN's process uLilizes aqueous exLracLion Lechniques, enzyne LreaLnenL and
sLandard filLraLion equipnenL Lo separaLe canola neal inLo various high proLein
producL sLreans. Canola neal is a najor byproducL of biodiesel producLion.
3.4 SASKATCHWAN OPPORTUNtTtS AND
CHALLNGS fOR A tODtSL tNDUSTRY
WiLh 43 per cenL of Lhe arable land in Canada, SaskaLchewan has a naLural
advanLage in providing feed sLock Lo Lhe biodiesel indusLry. While a varieLy of
feedsLocks can be used Lo produce biodiesel, canola is likely Lo be Lhe prinary
feed sLock because of Lhe nunber of acres seeded, iLs superior cold flow
properLies, and a large, developed crushing indusLry LhaL is ready Lo parLicipaLe
in Lhe producLion of biodiesel when Lhere is a renewable fuel sLandard and
incenLives conparable Lo Lhe .S.
According Lo SLaLisLics Canada, canola producLion in Canada ranged fron 4.5
Lo .7 nillion Lonnes per annun over Lhe lasL five years. SaskaLchewan canola
producLion over LhaL period has ranged fron Lwo Lo Lhree nillion Lonnes per
year wiLh Lhe excepLion of 2005, which was a record year aL 4. nillion Lonnes.
1he average for Lhe lasL five years is 2.8 nillion Lonnes.
1he conbined canola crushing capaciLy of ADM aL LloydninsLer, 8unge
aL Nipawin (where expansion will be conpleLed Lhis year) and Cargill near
SaskaLoon is esLinaLed Lo be 5,00 Lonnes per day. 1he planLs are currenLly
running aL abouL 0 per cenL capaciLy.
AnoLher feed sLock, flax, had a record year in 2005 wiLh 881,000 Lonnes
conpared Lo Lhe 355,000 Lo 500,000 Lonnes per annun in Lhe lasL five years.
Acres increased in 2005 aL 1.58 nillion acres, conpared Lo an average of one
nillion acres in Lhe lasL five years.
nlike canola and flax, nusLard did noL experience a record year in 2005. Acres
were down fron Lhe previous Lhree years, and overall producLion was down by 24
per cenL fron 2004. SaskaLchewan produced 170,000 Lonnes of nusLard in 2005.
SaskaLchewan consunes 1. billion liLres of diesel fuel per year. Prinary
producers accounL for one Lhird of Lhe consunpLion. 1he LoLal use of diesel
in Canada is 25 billion liLres. A 81 Lo 85 blend in SaskaLchewan would require
beLween 1 and 80 nillion liLres per year. kefer Lo Appendix l (page 5) for
sLaLisLics on peLroleun fuel consunpLion by provinces in Canada.
lor Canada, a 82 blend would require Lwo nillion canola acres, and a 85 blend
five nillion acres. 8ased on recenL years' daLa, five nillion acres would represenL
abouL 40 per cenL of Canadian acres, or virLually all of SaskaLchewan canola
acres. 1his would puL considerable pressure on Lhe abiliLy Lo serve Lhe preniun
food grade oil narkeL. 1he canola indusLry has seL a LargeL of 14 nillion Lonnes
by 2015, allocaLing five nillion Lonnes for food use, .5 nillion Lonnes for exporL,
and 2.5 nillion Lonnes for biodiesel, which is enough Lo supply one billion liLres
of canola oil feed sLock.
While Lhere are subsLanLial and pronising opporLuniLies for a biodiesel indusLry,
Lhere are also a nunber of barriers idenLified by sLakeholders including Lhe
peLroleun indusLry, Lhe crushing indusLry, prinary producers, and poLenLial
biodiesel users.
1hese barriers will require furLher exaninaLion:
1. lranework 8arriers:
LiniLed donesLic narkeL in SaskaLchewan
NaLional and inLerprovincial Lrade issues
se and price incenLives affecLing SaskaLchewan's conpeLiLiveness
Absence of a naLional renewable fuel sLandard LhaL would creaLe denand
kegulaLory issues
2. AgriculLure 8arriers:
leed sLock price
1echnology adapLaLion
linancial supporL
3. Prinary Producer 8arriers:
1he appropriaLe forn of business sLrucLures
linancing opLions Lo sLinulaLe prinary producer involvenenL
MarkeLing by-producLs and co-producLs
4. QualiLy 8arriers:
Cold flow properLies
QualiLy sLandards
QualiLy assurance
5. DisLribuLion 8arriers:
SLorage, blending, and disLribuLion
. Consuner 8arriers:
Awareness
ConnunicaLion
SaskaLchewan has poLenLial for biodiesel producLion, which would benefiL rural
connuniLies and Lhe environnenL, increase narkeLs for oilseeds, and provide
prinary producers wiLh Lhe opporLuniLy Lo parLicipaLe in a value-added indusLry.
However, considerable challenges sLill renain. 1he developnenL of a fruiLful
biodiesel indusLry will need Lhe conbined efforLs of indusLry, prinary producers
and all levels of governnenL.
3.4.1 iodieseI tndustry SustainabiIity in Saskatchewan
1he econonics of biodiesel producLion in Canada and in SaskaLchewan renain
Lhe subjecL of research. Canada, like oLher jurisdicLions, will require governnenL
supporL Lo develop Lhe indusLry.
1he recenL 8iocap sLudy on biodiesel producLion, called "A CriLical CosL 8enefiL
Analysis of Oilseed 8iodiesel in Canada,
10
indicaLed LhaL Lhe enLire supply
chain and processing plan nusL be considered so LhaL biodiesel developnenL
adds value Lo prinary agriculLure. leed sLock represenLs abouL 70 per cenL
of Lhe producLion cosLs, and oil prices for food have been LradiLionally nuch
higher. 1he reporL discussed ways Lo niLigaLe feed sLock cosLs. 1hese sLraLegies
include growLh of oilseed on nininun inpuLs Lo naxinize producer nargins,
Lhe producLion of biodiesel fron disLressed canola and oLher oilseeds, weed
seeds and screenings, and producLion fron planLs grown on land conLaninaLed
by heavy neLals, hydrocarbons or oLher Loxic conpounds. OLher processing
sLraLegies nay significanLly increase Lhe raLio of benefiLs Lo cosLs.
One biodiesel producLion nodel involves a single connuniLy hub (biodiesel
planL) and spoke (crushing, feed nill and feeding) nodel Lo naxinize rural
developnenL. 1he concepL includes several oil exLracLion planLs LhaL focus
on producing value-added neal producLs. 1hese planLs would sell all or a
porLion of Lheir oil producL Lo a biodiesel producLion faciliLy. An exanple of
Lhis is, Milligan 8io-1ech lnc. of loan Lake. 1he 8iocap reporL also includes an
econonic assessnenL of biodiesel producLion in SaskaLchewan based on Lhe use
of lower grades of oilseed. 1he nodel shows excellenL poLenLial for econonically
susLainable biodiesel producLion.
1he Canadian oilseed crushing indusLry is doninaLed by nulLinaLional
corporaLions including ADM, 8unge and Cargill. 1hese faciliLies have large on
siLe sLorage and nay have cleaning faciliLies as well. ln recenL years, Lhe exisLing
crushing faciliLies have Lypically been operaLing aL 0 per cenL of capaciLy.
1he face of SaskaLchewan's biodiesel indusLry in Lhe long Lern renains Lo be
seen. 1he .S. biodiesel indusLry shows a varieLy of differenL sized biodiesel
planLs and various invesLors and parLicipanLs, including prinary producers, rural
connuniLies, Lhe crushing indusLry, energy conpanies and invesLnenL funds.
SLraLegic alliances anong Lhe various players ensure secure feed sLock supplies,
narkeLs, and access Lo capiLal, Lechnology and experLise. 1he biodiesel indusLry
will becone a very conpeLiLive energy secLor as Lhe indusLry evolves.
How producers parLicipaLe in Lhe value chain will be dependenL upon available
equiLy and Lhe abiliLy and}or desire Lo Lake on risk. ConnuniLy based planLs
nay well be 100 per cenL locally owned or look Lo ouLside invesLnenL Lo obLain
needed capiLal, Lechnology and access Lo local, donesLic and inLernaLional
narkeLs. Sone conpanies nay look aL value-adding Lo biodiesel and Lhe
developnenL of co-producLs and neal.
1he 1ask lorce held a neeLing in kegina wiLh 14 groups of prinary producers
who were aL various sLages of exploring Lhe feasibiliLy of a biodiesel planL. 1he
size of Lhe planLs ranged fron snall, on-farn operaLions Lo larger, connercial-
sized faciliLies. ParLicipaLion in a value-added venLure was paranounL Lo all Lhe
prinary producer parLicipanLs. 1hey wanLed supporL fron governnenL including
loan guaranLees, equiLy parLicipaLion opporLuniLies, granLs, Lax incenLives and
financing, and also enphasized LhaL Lhe planLs should be locaLed aL Lhe source of
Lhe feed sLock.
DifferenL sizes of planLs focused on differenL narkeLs will need flexibiliLy in
governnenL supporL policies and prograns. Prinary producer parLicipaLion is
inporLanL buL could be liniLed by financing and equiLy availabiliLy.
8iodiesel nusL neeL qualiLy sLandards Lo enLer Lhe narkeLplace. Poor qualiLy
creaLes a bad repuLaLion for Lhe indusLry. 1here is concern LhaL snall or on-farn
producLion of biodiesel could have difficulLies neeLing qualiLy sLandards, and
LhaL Lhe cosL of LesLing nay be prohibiLive for snaller operaLions.
lor a susLainable biodiesel indusLry in Canada, Lhere needs Lo be a naLional
renewable fuel sLraLegy wiLh seL producLion LargeLs and incenLives conpeLiLive
wiLh Lhe .S. SaskaLchewan wanLs a "Made in Canada biodiesel indusLry LhaL
Lakes regional differences inLo consideraLion. 1he feedsLocks are in SaskaLchewan,
and Lhis is where prinary producers wanL Lhe planLs Lo be locaLed. SLakeholders
wanL a level playing field where everyone knows Lhe rules. 1hese rules should noL
change nid-sLrean, regardless of Lhe provincial or federal governnenL in power.
3.4.2 fIeet ChaIIenge Saskatchewan
lleeL Challenge SaskaLchewan, a clinaLe change iniLiaLive LhaL works wiLh on-
road LransporLaLion fleeLs Lo reduce Lheir fuel consunpLion and greenhouse
gas enissions, sees growing opporLuniLies wiLh biodiesel. lleeL Challenge
SaskaLchewan iniLiaLed Lhe use of biodiesel in Lhe Prenier's Dialogue wiLh
SaskaLchewan Lour bus, and in SaskaLchewan 1ransporLaLion Conpany (S1C) buses
used for Lhe 2005 Canada Sunner Canes in kegina.
More recenLly, lleeL Challenge worked wiLh S1C Lo help inplenenL a 82
denonsLraLion in all buses originaLing fron Lhe conpany's SaskaLoon depoL.
lleeL Challenge will conLinue Lo pronoLe biodiesel Lo fleeLs in Lhe province. 1he
ulLinaLe goal is Lo esLablish sufficienL denand, enabling biodiesel blended fuels
Lo becone nore widely disLribuLed and readily available.
3.4.2.1 Surveys
1wo biodiesel surveys were conducLed by Signa AnalyLics on behalf of lleeL
Challenge SaskaLchewan, Lhe SaskaLchewan kesearch Council, SaskaLchewan
AgriculLure and lood and Lhe 1ask lorce.
1he purpose of Lhe surveys was Lo:
1. Exanine Lhe narkeL poLenLial for biodiesel fron Lwo najor narkeL segnenLs:
agriculLural producers and privaLe secLor fleeLs consisLing of Lrucking,
consLrucLion, bus, crane, concreLe, paving and oLher conpanies,
2. DeLernine Lhe level of knowledge and awareness of biodiesel,
3. ldenLify currenL fuel purchasing pracLices and recepLiveness Lo alLernaLive fuels,
4. DeLernine supporL for Lhe developnenL of biodiesel in SaskaLchewan,
5. ldenLify opLions for Lhe blending and disLribuLion of biodiesel in SaskaLchewan.
lrimdry Agriculturdl lroduccr Survcy
ln Lhis survey, 814 agriculLure producers wiLhin 80 niles of SaskaLoon and kegina
were inLerviewed in March 200. Sone of Lhe key findings include:
1. NineLy-seven per cenL had heard of biodiesel, 8 per cenL were willing Lo use
biodiesel, 57 per cenL saw no disadvanLages Lo using biodiesel, while 1 per
cenL saw cosL as Lhe najor disadvanLage.
2. Of Lhose willing Lo use biodiesel, 15 per cenL would pay nore, while 8 per
cenL would pay nore if iL offseL repair cosLs.
3. SixLy-five per cenL of diesel fuel purchased by agriculLure producers is fron
one conpany.
4. lorLy-Lwo per cenL ciLed Lhe creaLion of an addiLional narkeL for
SaskaLchewan oilseeds and aninal faLs as Lhe nosL inporLanL inpeLus Lo Lhe
developnenL of a biodiesel indusLry in SaskaLchewan, 18 per cenL saw Lhe
proLecLion of Lhe environnenL as inporLanL.
5. NineLy-six per cenL agreed LhaL Lhe provincial governnenL should proceed
wiLh biodiesel developnenL.
llcct Survcy
ln May 200, 143 privaLe secLor firns in SaskaLchewan were conLacLed by
Lelephone. Surveys were conpleLed wiLh 31 conpanies. While Lhe sanple size
is snall, Lhe survey did provide sone insighL inLo Lhe fuel purchasing pracLices
of privaLe secLor fleeLs and Lheir opinion and knowledge of biodiesel. Sone key
findings include:
1. EighLy-one per cenL of Lhe conpanies had heard of biodiesel.
2. While 50 per cenL said Lhey would use biodiesel, none indicaLed a willingness
Lo pay nore. However, if Lhe higher price could be proven Lo offseL repair
cosLs, 8 per cenL indicaLed Lhey nay pay nore.
3. NineLy-seven per cenL purchase fuel fron card lock faciliLies, and very few
have cenLral refueling faciliLies.
4. EighLy-one per cenL are saLisfied wiLh service and qualiLy of fuel buL are
unhappy wiLh Lhe prices of diesel fuel.
5. Average annual volune of diesel purchased by each conpany surveyed was
4.3 nillion liLres.
EighLy-one per cenL of Lhe conpanies had heard of biodiesel. While 50 per cenL
said Lhey would use biodiesel, none indicaLed a willingness Lo pay nore. However,
if Lhe higher price could be proven Lo offseL repair cosLs, 8 per cenL indicaLed
Lhey nay pay nore. 1hey saw reduced repair cosLs as a najor advanLage Lo using
biodiesel, while 24 per cenL saw availabiliLy as Lhe najor disadvanLage.
3.4.3 feedstocks
leed sLock consideraLion is inporLanL, as iL represenLs abouL 70 per cenL of Lhe LoLal
cosL of producLion. leed sLock supply varies by populaLion and regions in Canada.
8iodiesel can be produced fron any nunber of raw naLerials or feedsLocks,
including virgin vegeLable oils (canola, flax, nusLard, soybean, paln, and fish
algae), aninal faLs, recycled grease and used cooking oils. Cold flow properLies of
biodiesel are dependenL upon Lhe feed sLock used. Canola is considered Lo have
superior cold flow properLies.
3.4.3.1 AnimaI fat
kendered aninal faL and recycled grease have liniLed poLenLial because of
liniLed supply fron Lhe aninal rendering indusLry and Lhe resLauranL and food
service indusLry. MosL of Lhese feedsLocks are locaLed in najor cenLres and will be
Lhe firsL feedsLocks used in biodiesel largely due Lo Lheir lower cosL.
lndusLry sources suggesL LhaL, on a per capiLa basis, 1.4 Lo 1.8 kg of aninal faL and
yellow grease are generaLed each year. 1he quanLiLy being capLured for biodiesel
producLion is noL well known. 1he populaLion of SaskaLchewan, approxinaLely
one nillion, would produce up Lo 2,000 Lonnes of aninal faL and yellow grease
annually. CurrenL reLail prices are in Lhe $430 per Lonne range. Prices in Lhe wesL
are higher due Lo greaLer access Lo narkeLs and lower freighL cosLs.
3.4.3.2 CanoIa
Canola is Lhe nosL abundanL oilseed in Canada and is nainly grown on Lhe
prairies. ln 2005, canola hiL a record yield of .7 nillion Lonnes, or 13.8 nillion
acres. 1he Canadian canola indusLry has seL a goal of 14 nillion Lonnes by 2015
fron Lheir original LargeL of seven nillion Lonnes by 2007.
DeLailed producLion sLaLisLics are available on SaskaLchewan AgriculLure and
lood's websiLe aL www.agr.gov.sk.ca.
ln any given year, Lhe average anounL of off-grade canola as a resulL of
heaL danage or green seed caused by frosL danage is five per cenL of LoLal
producLion. 8ased on seven nillion Lones, producLion of 350,000 Lonnes would
be available for biodiesel producLion. sing Lhe off-grade canola would anounL
Lo abouL 14 nillion liLres of biodiesel. However, using Lhis as a source of feed
sLock for biodiesel would conpeLe wiLh Lhe crushing indusLry, which uLilizes Lhis
resource for blending purposes in Lhe producLion of oil and neal.
3.4.3.3 Mustard
lor Lhe five year period ending in 2005, Canadian growers planLed an average
of 50,000 acres of nusLard per year, wiLh an average producLion of abouL
200,000 neLric Lonnes per year. SaskaLchewan produces abouL 80 per cenL of
Lhe nusLard in Canada, growing an average of 520,000 acres per year over Lhe
lasL five years. MusLard is nainly used as a condinenL, spice or food addiLive.
Canada only processes and donesLically uses abouL 13 per cenL of Lhe nusLard
produced, wiLh Lhe renaining 87 per cenL being exporLed as whole seed nainly
Lo Lhe .S., 8elgiun, and |apan.
1he developnenL of alLernaLe uses of nusLard, such as orienLal nusLard for a
bio-funiganL, has Lhe poLenLial Lo significanLly expand Lhe nusLard narkeL. An
alLernaLe use for nusLard neal would resulL in a supply of reasonably priced oil
LhaL could be uLilized for biodiesel producLion. AlLernaLe narkeLs for nusLard
could expand seeded acres in SaskaLchewan fron Lhe presenL 1. per cenL of
seeded acres Lo over 10 per cenL. 1he najor area for poLenLial expansion is in Lhe
brown and Lhin black soil zones.
3.4.3.4 fIax
Canada is Lhe world's largesL flax exporLer, and flax is wesLern Canada's second
largesL oilseed crop. SaskaLchewan is Canada's najor flax producer, wiLh nore
Lhan one nillion acres planLed Lo Lhe crop annually, Lhe najoriLy of which is
exporLed Lo Europe.
lndusLrial flax oil is a niche player in Lhe indusLrial oils narkeL because of iLs
polyunsaLuraLed faLLy acid levels. 1radiLional uses include painLs, coaLings,
prinLing inks (declining narkeL) and linoleun. llax oil is also used as a secondary
plasLicizer in flexible PvC (polyvinyl chloride) producLs.
Linseed oil as an indusLrial oil represenLs 0.8 per cenL of Lhe world's faLs and oil
producLion. 1oLal annual producLion is 104 nillion Lonnes of faLs and oils.
Linseed oil is highly unsaLuraLed and is a drying oil (absorbs oxygen and hardens
in air) used in vegeLable based polyureLhanes. lf flax oil was used in five per cenL
of Lhe polyureLhane narkeL, 500,000 Lonnes would be uLilized. lL is also used
in Lhe nanufacLure of hard board and brake linings, wood, cenenL and asphalL
LreaLnenLs.
llax could be unsuiLable for use as a feed sLock for biodiesel because iL has a
high conLenL of linolenic acid in Lhe oil, naking iL relaLively unsLable. However, a
specialLy flax called Solin could prove Lo be a viable feed sLock for biodiesel. Solin
flax can also produce valuable co-producLs for Lhe fibre narkeL and nuLraceuLical
indusLry.
3.4.3.5 Soybeans
While soybean is Lhe nain feed sLock for biodiesel in Lhe .S., acreage dedicaLed
Lo Lhe producLion of Lhis crop is very snall in WesLern Canada.
3.4.3.6 Long Term feedstocks
A nunber of longer Lern feedsLocks have been idenLified, such as chokecherry
and "false flax or canolina. 1hese Lwo poLenLial feedsLocks require long Lern,
high risk research iniLiaLives.
ln Lhe shorL and nediun Lern, oilseeds will play an inporLanL role in Lhe
developnenL of Lhe biodiesel indusLry in Canada. Each of Lhe oilseeds discussed
has iLs advanLages and disadvanLages including oil yield, conposiLion,
producLion, qualiLy and by-producLs.
3.4.4 Co-Products from iodieseI Production
(Thc lollowing inlormdtion i: rcprintcd with pcrmi::ion lrom thc Covcrnmcnt ol
Mdnitobd': 8iodic:cl Advi:ory Council.)
1he nain producLs of Lhe LransesLerificaLion process are biodiesel and glycerol.
1he co-producL (glycerol) can be refined inLo glycerine, which is used for a
varieLy of producLs fron cosneLics Lo pharnaceuLicals.
GIycerine Markets
Clycerine is a clear, odourless, gel-like subsLance connonly used in a nunber of
indusLry secLors including food and beverage, pharnaceuLical, LexLile, cosneLic,
and pulp and paper. AlLhough glycerol is used in Lhe producLion of liLerally
Lhousands of producLs, Lhose uses can change wiLh pricing and new Lechnology
developnenL. Clycerol can be produced synLheLically as well as naLurally, as a co-
producL of faLLy acid, faLLy alcohol or biodiesel producLion.
1he denand, supply and pricing of glycerine is deLernined by naLional and
inLernaLional narkeL forces, which are boLh conplex and unpredicLable. 8ecause
iL's a co-producL, Lhe denand for glycerine will be largely influenced by Lhe
denand for Lhe prinary producLs, such a biodiesel. As biodiesel producLion
capaciLy grows Lo neeL Lhe rising denand, Lhe anounL of glycerine available
for sale will also increase. 1he increased supply will likely reduce Lhe price of
glycerine.
3.4.4.1 iodieseI ~ More Than a fueI
One way Lo address Lhe cosL of producing biodiesel as a fuel is Lo invesLigaLe
opporLuniLies for higher value uses for biodiesel, or neLhyl esLers. ldenLifying
addiLional or alLernaLive narkeL opporLuniLies will allow nanufacLurers Lo
disLribuLe Lhe LoLal cosLs of neLhyl esLer producLion beLween Lhe fuel and non-
fuel narkeLs.
1he poLenLial narkeL for non-fuel, biodiesel esLers in Lhe .S. is esLinaLed Lo be
as high as $53 billion.
1he rising denand for environnenLally friendly chenicals is one of Lhe driving
forces behind narkeL opporLuniLies for neLhyl esLers. 1hey can be used as a
plaLforn chenical wiLh a nunber of indusLrial producLs. 1he narkeL segnenLs
are ouLlined below.
PlasLics and plasLicizers 5.1 billion kg
Agrochenicals 5.4 billion kg
SolvenLs and painL sLrippers 2.7 billion kg
lndusLrial chenicals 2.2 billion kg
Adhesives 3.4 billion kg
LubricanLs 1. billion kg
SurfacLanLs 2.7 billion kg
3.4.4.2 Lubricating OiIs
LubricanL producLs, including chainsaw oil, gear oil, hydraulic fluid and
Lransnission fluid, can be nade wiLh boLh canola neLhyl esLer and unnodified
canola oil. 1he najoriLy of lubricanLs sold in Canada are peLroleun-based.
However, because of environnenLal concerns and healLh problens associaLed
wiLh using peLroleun lubricanLs for sone applicaLions, nore environnenLally
friendly lubricanLs have been developed.
AlLhough vegeLable oil lubricanLs currenLly cosL approxinaLely Lwice as nuch as
convenLional peLroleun lubricanLs, Canadian conpanies seen Lo be willing Lo
pay higher prices for Lhese vegeLable oil lubricanLs in environnenLally sensiLive
areas. CurrenLly, Lhere are several conpanies disLribuLing vegeLable oil lubricanLs
in Canada. 1ypical cusLoners include logging conpanies, nunicipaliLies, parks
and golf courses.
3.4.4.3 SoIvents
SolvenL is a generic Lern, referring Lo a liquid subsLance capable of dissolving
oLher subsLances. MeLhylene chloride is a solvenL being phased ouL in Lhe
.S. and Canada due Lo environnenLal and healLh regulaLions. lL is a prinary
conponenL in painL renover, plasLics, adhesives and ureLhane foans. 8iodiesel
represenLs a significanL opporLuniLy Lo replace neLhylene chloride as a nore
environnenLally friendly solvenL.
3.4.4.4 MetaI Working OiI
MeLal working}cuLLing oils are used Lo reduce heaL when cuLLing or forning
neLal. As well, Lhey lubricaLe Lhe cuLLing area, renove conLaninanLs and prevenL
corrosion. 1here are Lwo broad caLegories of convenLional neLal working oils:
neaL and waLer-based. NeaL oils, used for heavy-duLy operaLions, can be derived
fron aninal, peLroleun, vegeLable or synLheLic sources, alLhough nosL are
peLroleun-based. WaLer-based or aqueous neLal working oils conLain waLer or
nusL be nixed wiLh waLer afLer purchase. 1here are Lhree Lypes of aqueous oils:
soluble, seni-synLheLic and synLheLic.
8ecause vegeLable oil cuLLing fluids are nore environnenLally friendly, less
of a healLh hazard, and superior in perfornance, vegeLable oil is increasingly
beconing Lhe oil of choice.
4.0 TASK fORC RCOMMNDATtONS
4. 1 NationaI RenewabIe fueI Strategy
ln 2000, Lhe CovernnenL of Canada announced a LargeL of 500 nillion liLres of
biodiesel producLion in Canada as parL of Lheir ClinaLe Change Plan. Six years
laLer, biodiesel is sLill very nuch in Lhe early sLages of developnenL, wiLh 200
producLion projecLed aL 100 nillion liLres. 8iodiesel is a well accepLed biofuel
in a well developed indusLry in Europe. ln Lhe .S., biodiesel producLion has
expanded significanLly in Lhe lasL decade. Clobally, Canada is far behind in Lhe
developnenL of Lhis indusLry.
ln 2005, Lhe CovernnenL of SaskaLchewan underLook a consulLaLion process
wiLh SaskaLchewan sLakeholders on Lhe fuLure direcLion of environnenLal
susLainabiliLy in Lhe province. 1he resulLing "Creen SLraLegy lranework for
SaskaLchewan confirned LhaL Lhe sLewardship of SaskaLchewan's abundanL
naLural resources has always been inporLanL Lo iLs people, who have a long
hisLory in undersLanding Lhe role LhaL Lhese resources have in Lheir lives and
livelihood. 1he reporL sLaLes, "1here is evidence LhaL benefiLs realized fron
susLainable pracLices can LranslaLe inLo a posiLive inpacL on Lhe financial boLLon
line. 1his is evidenced by Lhe pasL 10 years where Lhe Dow |ones SusLainabiliLy
lndex (D|Sl) has ouLperforned Lhe Dow |ones Clobal lndex (D|Cl).
ln Lhe 200 lederal 8udgeL, biofuels were nenLioned as parL of Lhe
governnenL's ongoing neasures Lo supporL Lhe fuLure conpeLiLiveness and
prosperiLy of Lhe agriculLure indusLry. 1he developnenL of a susLainable biodiesel
indusLry would bring benefiLs Lo Lhe environnenL and rural econonies.
lncreased use of biodiesel is one of a nunber of soluLions Lo reduce CHC
enissions wiLhin Lhe LransporLaLion secLor. Conpared Lo peLroleun diesel
fuel, producLion and use of biodiesel resulL in a 78 per cenL reducLion of
carbon dioxide enissions. 1here is also a posiLive energy balance of nore Lhan
Lhree uniLs of energy produced for every uniL needed Lo produce iL. 8iodiesel
reduces nosL regulaLed enissions, including parLiculaLe naLLer, carbon
dioxide and sulphur dioxide. OLher environnenLal benefiLs of biodiesel are iLs
biodegradabiliLy and non-LoxiciLy. vehicle enissions odour also inproved over
convenLional diesel enissions.
1o build a susLainable renewable fuel indusLry in Canada, iL will be necessary Lo
develop a sLraLegy LhaL provides harnonizaLion anong Lhe differenL regions.
1his will ensure free and fair Lrade anong Lhe provinces. 1his could include, for
exanple, Lhe renoval of Lhe federal and all provincial fuel Laxes across Canada
on biodiesel. HarnonizaLion would also allow for easier novenenL of blended
diesel fuels across Lhe counLry, wiLh easier access for consuners. ln addiLion, Lhe
.S. is noving forward wiLh a kenewable luel SLandard (klS). 1he absence of a
sinilar klS in Canada nay becone an issue wiLh regards Lo Lhe conLinenLal Lrade
of peLroleun producLs.
Canada's biodiesel indusLry sLakeholders need Lo have a clear nessage fron all
levels of governnenL regarding supporL for Lhe developnenL of Lhis indusLry.
Recommendation #1
The Task force recommends that the Government of Saskatchewan request
and support a RenewabIe fueI Strategy for Canada by 2010. The strategy
shouId be initiated by the Government of Canada in consuItation with aII
provinciaI and territoriaI governments. The RenewabIe fueI Strategy shouId
faciIitate the deveIopment of renewabIe fueI production capacity in a way
that encourages deveIopment according to regionaI advantages.
4.2 NationaI RenewabIe fueI Standard
During Lhe lasL elecLion canpaign, all parLies were supporLive of a conbined five
per cenL eLhanol}biodiesel kenewable luel SLandard for Canada. 1he original
LargeL for biodiesel in Lhe ClinaLe Change Plan was 500 nillion liLres, which
is approxinaLely a 82 blend (Lwo per cenL biodiesel, 8 per cenL diesel blend)
based on 25 billion liLres of diesel fuel used annually across Canada.
ln developing a naLional klS, Lhe 1ask lorce discussed Lhe following four issues:
1. A conbined eLhanol}biodiesel kenewable luel SLandard.
2. leed sLock supply and capaciLy for biodiesel producLion.
3. 8iodiesel incenLives.
The combined ethanoI/biodieseI RenewabIe fueI Standard
A naLional klS of five per cenL could be filled by eLhanol alone. ELhanol is furLher
developed Lhan biodiesel, wiLh sone 20 nillion liLres of annual producLion
in Canada. SaskaLchewan has Lhe poLenLial Lo produce 15 nillion liLres in
200. 1he consunpLion of 25 billion liLres of diesel fuel could be lefL wiLhouL a
renewable fuel opLion unless Lhere is a specified biodiesel allocaLion.
WiLh Lhe planned CovernnenL of SaskaLchewan eLhanol nandaLe of 7.5 per cenL
in OcLober 200, Lhere is Lhe poLenLial for fuel disLribuLors Lo narkeL eLhanol only.
feed stock suppIy and capacity for biodieseI production
ln Lhe S&1 2004 reporL connissioned by NaLural kesources Canada
3
, Lhe
firsL wave of biodiesel planLs will produce biodiesel fron Lhe less expensive
feedsLocks, such as aninal faLs and recycled cooking oil. MosL of Lhese planLs will
be cenLred in larger ciLies where Lhere are rendering planLs and large anounLs of
recycled cooking oil available. ln Novenber 2005, koLhsay, a division of Maple
Leaf loods lnc., announced Lheir plans Lo produce 35 nillion liLres of biodiesel
annually aL Lheir faciliLy in ville SLe. CaLherine. 8lOX, locaLed in HanilLon, will
have capaciLy Lo produce 0 nillion liLres of biodiesel nade fron aninal faLs and
recycled cooking oil, as well as sone canola, Lhis year.
1he resL could cone fron virgin vegeLable oils, prinarily canola, wiLh soybean,
nusLard and solin flax as oLher oilseed alLernaLives. Canola leads oilseed
producLion in Canada. lL is prinarily grown in wesLern Canada, wiLh half of
Lhe producLion acres in SaskaLchewan. 8ased on long-Lern average yields, one
nillion acres of canola would be required Lo produce enough biodiesel Lo neeL
a 81 blend in Canada. 1wo nillion acres would be required for a 82 blend.
1he Canola Council of Canada has announced Lheir goal Lo produce 14 nillion
Lonnes of canola by 2015. 1his goal will allow boLh Lhe food and indusLrial
narkeLs Lo expand.
1here are Lwo crushing planLs in SaskaLchewan: 8unge Canada aL Nipawin and
Cargill LiniLed aL ClaveL. Archer Daniels Midland Co. (ADM) has a crushing planL
in LloydninsLer, AlberLa, and 8unge Canada has one aL Harrowby, ManiLoba.
ADM is building a 32 nillion liLre producLion planL in velva, NorLh DakoLa. A
planL of Lhis size in Canada would alnosL neeL Lhe 500 nillion liLre LargeL.
SaskaLchewan uses abouL 1. billion liLres of diesel annually. A five per cenL klS
would require 80 nillion liLres. A Lwo per cenL klS would require 32 nillion liLres.
iodieseI incentives
lncenLives, along wiLh Lhe klS, are required Lo nake biodiesel conpeLiLive
wiLh peLroleun diesel fuels. 1hese incenLives would ensure Lhe consuner price
of a biodiesel blend is conparable Lo Lhe peLroleun diesel fuel prices. 1hese
incenLives should be conpeLiLive wiLh Lhe incenLives offered by Lhe .S.
Recommendation #2
The Task force recommends that the Government of Saskatchewan caII
upon the Government of Canada to impIement a RenewabIe fueI Standard
(RfS) with separate aIIocations for biodieseI and ethanoI in on and off-road
fueIs. The Task force suggests a biodieseI RfS target of two per cent by
2010, increasing to five per cent by 2015.
4.3 tncentives
8oLh Europe and Lhe .S. have provided incenLives Lo develop Lheir biodiesel
indusLries. WiLhouL Lhese incenLives, public consunpLion would be liniLed and
Lhe econonics of biodiesel producLion would noL be profiLable, because Lhe cosL
of biodiesel was greaLer Lhan peLroleun diesel. Europe is nuch farLher ahead
Lhan Lhe .S. However, Lhe 1ask lorce looked prinarily aL .S. prograns because
Canada and Lhe .S. have a nore inLegraLed econony, and Lhe .S. is Canada's
largesL conpeLiLor. 1o develop and be conpeLiLive wiLh Lhe .S., Canada will
need sinilar incenLives.
UNtTD STATS
1he 8lenders 1ax CrediL, Lhe 8ioenergy Progran and Lhe 8iodiesel luel EducaLion
Progran are Lhe Lhree nain federal policies sLinulaLing biodiesel producLion in
Lhe .S.
Tax Credit for Ienders
1he biodiesel blenders Lax crediL was legislaLed in 2004 under Lhe resLrucLured
voluneLric ELhanol Excise 1ax CrediL, or vEE1C legislaLion, under Lhe |O8S AcL.
1he new blender's Lax crediL cane inLo effecL in |anuary 2005 under Lhe lederal
Energy 8ill. lL was Lhe prinary sLinulanL in 2005 for Lhe dranaLic increase in
new planL consLrucLion in rural and urban areas. 1his Lax crediL will end in 2008.
However, legislaLion is currenLly pending Lo exLend Lhis crediL Lhrough Lo 2010.
1he blenders Lax crediL provides one dollar per .S. gallon for agri-biodiesel
($0.30}liLre) and $0.50 per .S. gallon for recycled oils ($0.15}liLre).
1here is also a snall agri-biodiesel producer crediL LhaL pays 10 cenLs per gallon
on Lhe firsL 15 nillion gallons if annual producLion is less Lhan 0 nillion gallons
per year, or a naxinun of $1.5 nillion per biodiesel producer. 1he Lax crediL
can be passed on Lo individual shareholders.
ioenergy Program
1he 8ioenergy Progran provides funding Lo expand indusLrial consunpLion of
agriculLural connodiLies by pronoLing Lheir use in producLion of eLhanol and
biodiesel. 1he SDA ConnodiLy CrediL CorporaLion progran offers up Lo $7.5
nillion in cash paynenLs Lo individual producers who increase purchases of
connodiLies Lo expand producLion of biofuels.
8iodiesel producers nusL produce and sell biodiesel connercially, and be
regisLered and in good sLanding wiLh EnvironnenLal ProLecLion Agency. 1he
progran will subsidize Lhose biodiesel producers producing less Lhan 5
nillion gallons aL 40 per cenL or one bushel for every 2.5 bushels of addiLional
connodiLies for biodiesel. 1hose producing nore Lhan 5 nillion gallons will
receive 28. per cenL or one bushel for every 3.5 bushels.
iodieseI fueI ducation Program
1his progran, also adninisLered by Lhe SDA, provides educaLional funding
Lo supporL increased fuel qualiLy neasures, increased accepLance of biodiesel
by engine and equipnenL nanufacLurers, Lhe peLroleun indusLry, biodiesel
users and Lhe general public. 1his includes LargeLing governnenL and privaLe
fleeL operaLors and poLenLial users of biodiesel. 1he progran also addresses Lhe
need Lo balance Lhe posiLive environnenLal, social and hunan healLh effecLs of
biodiesel consunpLion wiLh Lhe increased cosL per gallon.
ln addiLion Lo Lhese Lhree nain federal policies, Lhe .S. also has a nunber of
oLher federal prograns.
AIternative Motor VehicIe Credit
1he 2005 Energy Policy AcL (EPAC1) provides a Lax crediL Lo buyers of new
dedicaLed alLernaLive fuel vehicles beginning |anuary 200. 1he Lax crediL equals
50 per cenL of Lhe increnenLal cosL of Lhe vehicle plus an addiLional 30 per cenL
of Lhe increnenLal cosL for vehicles wiLh near zero enissions. 1his progran will
expire aL Lhe end of 2010.
AIternative fueI tnfrastructure Tax Credit
Also under Lhe 2005 Energy Policy AcL is a provision for a Lax crediL equal Lo
30 per cenL of Lhe cosL for an alLernaLive refueling properLy, up Lo $30,000 for
business properLy. 1his progran expires aL Lhe end of 200.
federaI fIeet Requirements
nder EPAC1 (12), 75 per cenL of new lighL duLy federal fleeL vehicles were
required Lo be alLernaLive fuel vehicles. nder EPAC1 (2005), federal fleeLs are
required Lo use alLernaLive fuels in dual fuel vehicles (wiLh sone excepLions),
including Lhe excessively high cosL of Lhe alLernaLive fuel.
VaIue Added Producer Grants
1he 2002 larn 8ill conLained legislaLion Lo fund a six year progran aL Lhe raLe
of $40 nillion annually. 1he progran is designed Lo encourage independenL
producers (or groups of producers wiLh nore Lhan 50 per cenL producer
ownership and conLrol) of agriculLural connodiLies Lo process Lheir raw producLs
inLo narkeLable goods, Lhereby increasing farn incone. 1he funds are divided
inLo Lwo areas: liniLs of $100,000 for planning granLs and $150,000 for working
capiLal granLs.
usiness and tndustry Guarantee Loans
1his progran guaranLees up Lo 80 per cenL of a loan nade by a connercial
lender. 1he loan nay be used for working capiLal, nachinery and equipnenL,
buildings, real esLaLe and cerLain Lypes of debL financing. 1he progran applies
Lo any legally organized enLiLy. 1he naxinun aggregaLe anounL by any one
borrower is $25 nillion. A naxinun of 10 per cenL of progran funding is
available Lo value-added co-operaLive organizaLions for loans above $25 nillion,
Lo a naxinun aggregaLe of $40 nillion.
RuraI Co-operative Stock Purchase Program
1his progran works in conjuncLion wiLh Lhe above progran Lo allow producers
Lo join new co-operaLives LhaL produce value-added goods. 1he naxinun
guaranLee is 80 per cenL wiLh a naxinun loan anounL of $400,000. lnLeresL
raLes are Lo be negoLiaLed wiLh Lhe producer's lender over a seven year Lern. 1he
guaranLee fee is Lwo per cenL of Lhe guaranLeed porLion of Lhe loan.
CANADA
1here are a nunber of Canadian prograns and Lax crediLs LhaL could poLenLially
be adapLed Lo Lhe biodiesel indusLry.
Canadian Ruminant SIaughter quity Assistance Program
1his 2005 larn CrediL Canada-adninisLered progran supporLs Canadian
producer invesLnenL in new runinanL slaughLer faciliLies Lo encourage and build
capaciLy in Lhe livesLock indusLry. 1his progran, under Lhe EquiLy AssisLance
Progran, nade $10 nillion available. 1he progran required a nininun of
$1,000 invesLnenL by Lhe producer which would Lrigger a $500 conLribuLion
by Lhe governnenL. 1he naxinun governnenL conLribuLion was $20,000 per
producer, and $5 nillion per slaughLer faciliLy.
1here is a kuninanL SlaughLer laciliLy AssessnenL AssisLance Progran Lo assisL
in Lhe feasibiliLy of esLablishing a runinanL slaughLer faciliLy. 1his progran is
available for eligible producer-led projecLs and has a federal conLribuLion of up
Lo half of a group's invesLnenL, Lo a naxinun of $,0. 1his naxinun nay
include Lhe $25,000 available Lhrough Lhe exisLing Planning and AssessnenL
for value-Added EnLerprises (PAvE) progran. 1here is no nininun invesLnenL,
and parLicipanLs can access funds for several eligible acLiviLies unLil Lhe group's
approved naxinun funding level is reached.
CIass 43.1 CapitaI Cost AIIowance
Class 43.1, as iL relaLes Lo Lhe depreciaLion of asseLs, already applies Lo
several renewable indusLries and could be adapLed for Lhe biodiesel indusLry.
AcceleraLing depreciaLion of Lhe capiLal asseLs Lo producers of biodiesel planLs
lowers Lhe risk of capiLal invesLnenLs.
The Scientific Research and xperimentaI DeveIopment (SR&D) Program.
1he Sk&ED progran was esLablished by Lhe federal governnenL as a Lax
incenLive progran Lo encourage Canadian businesses of all sizes Lo conducL
research and developnenL LhaL will lead Lo new or inproved Lechnologically
advanced producLs or processes. lL is Lhe largesL single source of federal
governnenL supporL for indusLrial research and developnenL.
SASKATCHWAN
The Saskatchewan Research and DeveIopment Tax Credit
1his is a non-refundable incone Lax crediL for corporaLions Lo encourage invesLnenL
in research and developnenL and Lhe expansion of knowledge based indusLries in
Lhe province. 1his Lax crediL is available Lo all corporaLions filing a 12 CorporaLion
lncone 1ax reLurn and having a pernanenL esLablishnenL in SaskaLchewan.
tnvest in Saskatchewan Program
1he lnvesL in SaskaLchewan Progran encourages SaskaLchewan enployees and
individuals Lo invesL in funds or pools of capiLal, called Labour-Sponsored venLure
CapiLal CorporaLions (LSvCC). 1hese corporaLions invesL in SaskaLchewan-based
snall and nediun-sized businesses. 1hese invesLnenLs assisL wiLh job creaLion
and nainLenance, and also provide a greaLer sense of conLrol for enployee
groups, labour associaLions and oLher worker groups.
lndividuals invesLing in Lhe shares of a provincially regisLered Labour-Sponsored
venLure CapiLal CorporaLion will be eligible for boLh a provincial Lax crediL, equal
Lo 20 per cenL of Lhe cosL of Lheir invesLnenL, and a 15 per cenL federal Lax
crediL on Lhe firsL $5,000 invesLed in each year. 1here are Lwo Lypes of funds LhaL
nay be regisLered under Lhe AcL: Lhe Enployee lunds and Lhe broad-based Pool
lunds, which are open Lo all residenLs of Lhe province.
Recommendation #3
The Task force recommends that the Government of Saskatchewan, in co-
operation with the Government of Canada and aII provinciaI and territoriaI
governments, deveIop programs and poIicies for a biodieseI industry that
encourage production, consumption, and technoIogy deveIopment. These
programs and poIicies shouId consider inter-provinciaI and internationaI
trade requirements.
Program and poIicy considerations shouId be given the foIIowing goaIs
and objectives:
1. ncourage and enabIe primary producer participation in
biodieseI projects.
2. ncourage and enabIe ruraI community based biodieseI projects.
3. ncourage aII government fIeets to use biodieseI.
4. ncourage aII contracts tendered by aII IeveIs of federaI, provinciaI and
municipaI governments to incIude the use of biodieseI.
5. ncourage tax credits for investments into a biodieseI industry.
Recommendation #4
The Task force recommends that the Government of Saskatchewan, with the
support of the Government of Canada, support communication and pubIic
awareness targeted at the production, distribution and consumption of
biodieseI through conferences, workshops, demonstrations, media activities
and pubIications.
4.4 tODtSL fUL UALtTY
Concerns of Lhe peLroleun indusLry relaLe Lo Lhe qualiLy of biodiesel LhaL would
be produced, Lhe cosL of disLribuLion and Lhe inLroducLion of lLra Low Sulphur
Diesel (LSD) in 200. Original engine nanufacLurers (OEMs) are also concerned
abouL qualiLy of Lhe biodiesel, parLicularly wiLh Lhe inLroducLion of new diesel
engine Lechnology in 2007.
ln 2005, Lhe Canadian Ceneral SLandards 8oard (CCS8) seL Lhe biodiesel
sLandard for 81 Lo 85 blends using Low Sulphur Diesel (LSD) (500 ppn) under
CCS8 3.520. 1his sLandard is sinilar Lo Lhe Anerican SLandard 1esLing MaLerial
(AS1M) D751 sLandard esLablished for 81 Lo 85 blends for LSD, wiLh Lhe
excepLion LhaL CCS8 Look inLo consideraLion Lhe cold flow properLies due Lo our
colder LenperaLures. 1he European SLandard is EN14214. lL is nore rigorous
Lhan Lhe Anerican sLandard, and Lhe Anerican sLandard is noving Lowards iL,
especially aL higher blends. ln Canada, biodiesel blends higher Lhan 85 will need
Lo have nore rigorous sLandards due Lo our cold clinaLe. Higher blends for
exanple 820 will likely be only in conLracLual arrangenenLs.
1he CCS8 is a federal governnenL organizaLion LhaL offers clienL-cenLred,
conprehensive sLandard developnenL and conforniLy assessnenL services
in supporL of Lhe econonic, regulaLory, procurenenL, healLh, safeLy and
environnenLal inLeresLs of sLakeholders, including governnenL, indusLry and
consuners. While Lhe CCS8 seLs Lhe sLandards, Lhese sane sLandards are noL
enforced unless Lhe province legislaLes iL as Lhe sLandard. Sone provinces have
done Lhis, including OnLario and Quebec.
1he 1ask lorce considered Lhe following issues on fuel qualiLy:
1. WhaL is Lhe sLandard besL suiLed for Canada's cold clinaLe7
2. How do we ensure a consisLenL qualiLy sLandard for biodiesel sold in Canada7
3. How do we ensure Lhe sLandards would neeL original engine nanufacLurer's
(OEMs) requirenenL for Lheir warranLies on engines7
What is the standard best suited for Canadas coId cIimate?
1he use of biodiesel in Canada's cold condiLions is dependenL upon Lhe feed
sLock and Lhe anounL of biodiesel blended inLo Lhe diesel fuel. Low anounLs of
less Lhan five per cenL biodiesel show liLLle difference wiLh regards Lo cold flow
properLies when conpared Lo using 100 per cenL regular peLroleun diesel fuel.
Canola has superior cold flow properLies Lo oLher feedsLocks, naking iL a
suiLable feed sLock in colder clinaLes. lL is Lhe nain feed sLock for European
biodiesel producLion. 8lends could vary fron sunner Lo winLer depending
on cold flow requirenenLs.
How do we ensure a consistent quaIity standard for biodieseI
soId in Canada?
CurrenLly, all biodiesel sold nusL be cerLified and neeL CCS8 3.520 sLandards.
1his LesLing is expensive (abouL $3,000 per LesL) and will be a narkeL barrier
for snall biodiesel conpanies. 1o daLe, Lhe AlberLa kesearch Council has been
Lhe only LesLing agency in WesLern Canada. However, boLh ManiLoba and
SaskaLchewan are seLLing up laboraLories. 1he SaskaLchewan kesearch Council
(SkC) in kegina is in Lhe process of seLLing up LesLing faciliLies for all fuels Lhis year.
How do we ensure the standards wouId meet OriginaI
ngine Manufacturers (OMs) requirement
for their warranties on engines?
All OEMs are currenLly developing new clean engine Lechnology for Lhe new
generaLion of diesel engines which will enLer Lhe narkeLplace in 2007. 1esLing in Lhe
.S. has been iniLiaLed wiLh supporL and funding fron Lhe Canadian governnenL.
Recommendation #5
The Task force recommends that the Government of Saskatchewan caII
upon the Government of Canada to fund research and testing in support
of biodieseI standard deveIopment for 1 to 5 and 6 to 20 bIends of
biodieseI with uItra Iow suIphur dieseI (ULSD). This wouId incIude:
Oxidation stabiIity
CoId fIow properties
fIeet testing
Additive interaction
PetroIeum species interactions
The Task force aIso recommends the deveIopment of performance
based standards that are feed stock neutraI, faciIitate Ieast cost biodieseI
production and distribution, and protect the reIiabiIity and warranty
requirements of the consumer.
Recommendation #6
The Task force recommends that aII biodieseI soId meets approved
Canadian biodieseI standards and is certified. The Task force aIso
recommends that the Government of Saskatchewan ask the Government of
Canada to estabIish a muIti-year program that heIps biodieseI production
and distribution companies meet standards by providing funding or testing
of biodieseI and biodieseI bIends.
4.5 UStNSS STRUCTURS
1here are various business sLrucLures available in Canada, including corporaLions,
parLnerships, liniLed parLnerships, co-operaLive corporaLions, new generaLion
co-operaLives and joinL venLures. linding Lhe righL business sLrucLure will depend
upon Lhe requirenenLs of Lhe business and iLs principals.
AlLhough New CeneraLion Co-operaLives (NCC) are available in Canada for
prinary producers only, four NCCs have been used across Canada. According
Lo Myers Norris Penny, Lhere are 35 NCCs in Lhe .S. 1he .S. biofuel secLor is
largely using Lhe business sLrucLure referred Lo as a LiniLed LiabiliLy CorporaLion
(LLC), which is noL available in Canada. An LLC provides sinilar conponenLs Lo a
NCC wiLh delivering of feed sLock based on Lhe invesLnenL.
A LLC provides Lhe following benefiLs:
1. LiniLed liabiliLy and nore flexibiliLy for owners.
2. lncone losses can be passed Lo owners if Lhe LLC chooses Lo be classified as
a parLnership.
3. lncone losses can be passed along.
Recommendation #7
The Task force recommends that both the Government of Saskatchewan
and Government of Canada evaIuate and support Limited LiabiIity
Corporations and other potentiaI business structures that may faciIitate
primary producers investment.
4.6 SASKATCHWAN ~ TH tO-PRODUCTS
CNTR fOR CANADA
1he biodiesel indusLry will provide Lhe plaLforn fron which Lo build furLher
opporLuniLies. Co-producLs wiLh higher nargins, such as solvenLs, dusL conLrol
agenLs, de-icers, greases, LoLal loss oils, pharnaceuLicals, proLein concenLraLes
and bioconLrol producLs are being developed. 1he eLhanol indusLry will also be
a plaLforn for nany indusLrial producLs and chenicals, such as polylacLic acid,
aceLic acid, and succinic acid, as well as chenicals fron Lhe eLhyl group including
esLers, aceLaLe and lacLaLe.
SaskaLchewan, parLicularly SaskaLoon, has a leading bioscience clusLer of
research and Leaching insLiLuLions, seed and bioLechnology conpanies, producer
organizaLions, and piloL planLs LhaL offer proven research, processing and
connercializaLion capabiliLies. 1he Canadian LighL Source SynchroLron adds
conprehensive analyLical capabiliLies Lo Lhe already exLensive experLise. SaskaLoon
is cenLral Lo Lhe Prairies and Lhe abundanL naLural resources including farn land,
foresLry and waLer. SaskaLoon is recognized globally as Lhe Canola kesearch CenLre
and a renowned "CenLre of 8ioScience acLiviLy LhaL spans nany disciplines.
Recommendation #8
The Task force recommends that the Government of Saskatchewan, with
the support of the Government of Canada, deveIop a NationaI io-Products
Centre Iocated in Saskatoon, Saskatchewan. This centre wouId conduct
and assist in the co-ordination of aII bio-product research across Canada to
advance biofueIs and bio-products deveIopment.
4.7 RSARCH AND DVLOPMNT
1he building of any indusLry requires considerable research and developnenL.
A nunber of areas were considered by Lhe 1ask lorce:
1. leedsLocks
2. Co-ProducLs
3. 8y-ProducLs
4. value-added uses of Lhe esLers
feedstocks
lor a biodiesel indusLry Lo have long Lern susLainabiliLy Lhere will be a need
Lo inprove feedsLocks and develop new crops. kesearch conLinues on various
nusLard varieLies and oLher crops, such as canolina. 1here nay also be poLenLial
for perennial feedsLocks in Lhe long Lern.
Co-Products
1he prinary co-producL fron biodiesel producLion is glycerine. 1here are nore
Lhan 1,500 uses
3
which can be divided inLo oral care, food, Lobacco, ureLhane
foans, and pharnaceuLical producLs. kesearch nusL conLinue inLo all poLenLial
producL developnenLs.
y-Products
1he developnenL of Lhe biofuels indusLry in SaskaLchewan will increase Lhe
supply of oilseed neal fron biodiesel producLion and disLiller's grain fron
eLhanol producLion. kesearch is required Lo evaluaLe and develop alLernaLe uses
and processing of Lhese by-producLs for poLenLial food, feed and non-food uses.
MCN ProducLs in SaskaLoon is adding value Lo canola neal by fracLioning Lhe
proLein inLo higher end narkeLs, such as Lhe aquaculLure feed narkeL.
1here is also poLenLial for nusLard neal Lo be used as bio-conLrol producLs.
Peacock lndusLries has developed a nenaLicide fron nusLard neal.
VaIue-Added Uses of the sters
MeLhyl-esLers are Lhe nosL predoninanL esLer in Lhe producLion of biodiesel,
alLhough eLhyl-esLers can be produced if eLhanol raLher Lhan neLhanol is used in
Lhe producLion. 1he poLenLial for Lhe biodiesel indusLry lies in using biodiesel as
a plaLforn for higher-value uses of Lhe esLers. 1here are currenLly Lechnologies
available LhaL can add furLher value Lo biodiesel. None of Lhe Lechnologies have
been connercialized Lo daLe, wiLh Lhe excepLion of Lhe addiLives (lubricanLs)
produced by conpanies such as Milligan 8io-1ech and DSC.
4.7.1 iodieseI Research and Demonstrations
4.7.1.1 Saskatchewan CanoIa DeveIopment Commission
1he SaskaLchewan Canola DevelopnenL Connission (SCDC) has been funding
research on biodiesel since 14. 1he research has focused on Lhe uLilizaLion of
biodiesel in diesel engines and iLs inpacL on engine operaLion, fuel econony and
engine wear. kesearch has nainly been conducLed by 8arry HerLz and MarLin
keaney aL Lhe niversiLy of SaskaLchewan. 1he research has generally shown LhaL
low levels of biodiesel added Lo peLroleun diesel fuel inproves fuel lubriciLy and
fuel econony, and reduces engine wear. A sunnary of Lhe research is available
on Lhe SCDC websiLe aL www.saskcanola.con.
A lisL of research projecLs funded is ouLlined below.
Date DetaiIs
14- CP 401, AdepL}OrLech Canola MeLhyl EsLer Enissions SLudy
14- CP 402, 8akhshi ProducLion of lsobuLylene}8uLane fron caLalyLic
conversion or canola oil
15- CP 501, HerLz Engineering- Sunner 15 engine wear sLudy
15-7 CP 552 keaney EvaluaLion of 8iodiesel fron refuse and heaLed seed
15-7 CP 553, keaney 8io Oils MarkeL kesearch
17- CP 701, HerLz}keaney WinLer 17 8iodiesel Engine Wear kesearch
18-2000 CP 822, keaney Processing blends of heaLed and #3 canola
18 CP 820 DEEP nine enission sLudy
1-2001 CP 03 Dalai ProducLion of diesel fuel lubriciLy addiLives
1-2001 CP 04, HerLz Analysis and field perfornance of canola lubriciLy
addiLives
1-2001 CP 11}-08, HerLz lield evaluaLion of direcL injecLion diesel engine
2001-2002 CP 0}01-01, HerLz Seasonal gasoline engine wear perfornances wiLh
canola lubriciLy addiLives aL nininal fuel LreaLnenL raLes
2001-2003 CP 11}01-10, HerLz Heavy duLy diesel engine wear and efficiency sLudy
2001-2003 CP 11}01-12, reaney lsolaLion of Lhe canola lubriciLy facLor
2001-2003
17- |ason Munson, MasLers Scholarship M-rocle lubriciLy bench LesL
2001-2003 Skip Munshaw, MasLers Scholarship Heavy duLy engine perfornance
wiLh canola based lubriciLy addiLives
200 Canadian Canola Crowers AssociaLion 1he econonic inpacL of
Canadian biodiesel producLion on Canadian grains, oilseeds and livesLock
producers
2005-200 SaskaLoon 1ransiL 8io-bus ProjecL
4.7.1.2 Saskatoon ious, Phase tt Research Project
WesLern Econonic DiversificaLion Canada, Lhe SaskaLchewan Canola DevelopnenL
Connission and Lhe Canadian Canola Crowers AssociaLion financially sponsored
Lhis sLudy. lLs purpose was Lo evaluaLe Lhe influences of canola biodiesel on Lhe fuel
econony and engine wear perfornance of SaskaLoon ciLy LransiL buses. 1wo older
v-2 and Lwo newer D-50 powered buses were selecLed for ciLy rouLe LesLing over
a Lwo-year period. luels were alLernaLed beLween five per cenL biodiesel (85) and
seasonal low-sulfur diesel, swiLching buses aL nid-poinL. Weekly engine oil sanples
were analyzed by lCP specLroneLry Lo obLain wear raLes, while fuel consunpLion
records provided energy efficiency daLa. luels were LesLed for lubriciLy, viscosiLy and
specific graviLy aL Lhe niversiLy of SaskaLchewan. A fifLh bus parLicipaLed in sunner
higher-precision highway fuel econony and wear conparisons of connercial diesel
fuel alone and wiLh 0.2 per cenL, one per cenL, and five per cenL biodiesel blends.
1he lubriciLy of Lhe seasonal diesel fuel was unexpecLedly found Lo be lowesL during
Lhe sunner nonLhs. 1he addiLion of Canola MeLhyl EsLer (CME) biodiesel inproved
lubriciLy by decreasing M-kOCLE* bench LesL wear areas and coefficienLs of fricLion
for all seasons. Sone decrease in Lhe lubriciLy of Lhe aged CME was noLed Lowards
Lhe end of Lhe sLudy. 1he lubriciLy of Lhe five per cenL biodiesel fuel had a good
influence on engine wear raLes and fuel econony, wiLh 7.8 per cenL Lo 23.4 per
cenL lower engine wear and 2.7 per cenL Lo 4.3 per cenL beLLer fuel econony in ciLy
driving wiLh Lhe sane inLacL engines. On Lhe highway, Lhe one per cenL biodiesel
yielded Lhe besL fuel econony gains, in Lhe Lwo Lo Lhree per cenL range, while
engine wear decreased by up Lo 44 per cenL wiLh a five per cenL CME LreaLnenL.
lerrographic, nagneLic and oil filLer analysis of larger wear parLicles indicaLed only
snall differences beLween Lhe various fuels LesLed. 1he fuel injecLors renained clean
for all fuels and no fuel relaLed problens were encounLered, even aL -44C.
1he applicaLion of five per cenL CME LreaLnenLs conserved Lhe acid neuLralizaLion
capabiliLy of Lhe used noLor oil as indicaLed by iLs higher 1oLal 8ase Nunber
(18N). 1he oil viscosiLy renained accepLable wheLher or noL biodiesel was being
burned. A cosL effecLiveness analysis indicaLed LhaL a 20 per cenL engine wear
reducLion is equivalenL Lo an approxinaLe fuel saving of $0.02}liLre when a Lypical
engine is valued aL $0.10}liLre for Lhe fuel used over iLs lifeLine. WiLh Lhe cosL of
boLh biodiesel and diesel fuels approaching one dollar per liLre, fron opposiLe
direcLions, Lhe biodiesel fuel econony benefiL of four per cenL would LranslaLe inLo
an addiLional four cenLs per liLre fuel saving, Lypically resulLing in a LoLal cosL benefiL
of sone six cenLs per liLre for a 85 fuel. 1he observed lower exhausL opaciLy fron
using biodiesel and iLs carbon-dioxide neuLraliLy, wiLh lower greenhouse gases, are
environnenLal benefiLs in addiLion Lo Lhe wear and fuel econony savings.
* rclcr: to thc Mun:on Rollcr on Cylindcr |ubricity vdludtor. Thc M-ROC| bcnch tc:t
dpplic: d con:tdnt lodd ol 24.62 N to d :tdtiondry :tccl bcdring rollcr. Thi: rollcr rub: dgdin:t d
lucl-lubricdtcd rotdting :tccl bcdring rdcc or cylindcr. Thc :itudtion thdt occur: in dic:cl injcction
pump: i: imitdtcd by cro::ing thc rollcr dnd cylindcr dxc: to dcvclop d high thcorcticdl 897 Mld
|crtzidn :trc:: dt thc point ol contdct. To dctcrminc thc cocllicicnt ol lriction dcvclopcd with thc lucl
dnd mcthyl c:tcr blcnd:, thc computcr intcrldccd :tcddy :tdtc motor lrictiondl torquc wd: mcd:urcd
during dn individudl 3 minutc run. |n ordcr to control dmbicnt tcmpcrdturc, lucl tcmpcrdturc dnd
room humidity dt 24C, 2S C, dnd 4S pcr ccnt rc:pcctivcly, dn cnvironmcntdl chdmbcr wd: u:cd.
Recommendation #9
The Task force recommends that the Government of Saskatchewan, with
support of the Government of Canada, continue research and deveIopment,
aIong with the commerciaIization of new products, deveIopment of new
pIatform crop varieties, and expansion, deveIopment and commerciaIization
of the co-products and by-products from a biodieseI industry. The Task force
aIso recommends that a Western Canadian energy and greenhouse gas Iife
cycIe anaIysis be conducted according to internationaI standards.
4.8 LNDtNG AND DtSTRtUTtON
PresenLly, diesel fuel blended wiLh biodiesel aL blends of nore Lhan 81
(one per cenL biodiesel) is noL generally available aL Lhe wholesale or reLail level
in SaskaLchewan. lleeLs, agriculLural producers or cusLoners who wish Lo Lry
biodiesel have Lo blend Lhe fuel Lhenselves. Hence, Lrials and denonsLraLions in
Lhis province have predoninanLly enLailed fleeLs wiLh cenLral refuelling faciliLies
LhaL are willing Lo invesL in blending infrasLrucLure and allocaLe resources Lo
blending. 1hese fleeLs represenL only a very snall porLion of overall diesel fuel
consunpLion in Lhe province.
1he surveys of Lwo najor diesel narkeLs in SaskaLchewan, agriculLural producers
and privaLe secLor fleeLs, denonsLraLed sLrong poLenLial denand for biodiesel if
nade available aL a price conpeLiLive Lo peLroleun diesel. EighLy-six per cenL of
agriculLural producers and fifLy per cenL of fleeLs indicaLed a willingness Lo use
biodiesel, denonsLraLing LhaL a large poLenLial narkeL for biodiesel does exisL in Lhe
province. 1herefore, Lhe issue of producL availabiliLy Lo neeL Lhe denand arises.
nlike Lhe niLed SLaLes peLroleun indusLry, Lhe refining, wholesaling and reLailing
of peLroleun fuels in SaskaLchewan is predoninanLly concenLraLed wiLhin a liniLed
nunber of large, verLically inLegraLed conpanies. ln order for blended biodiesel Lo
peneLraLe Lhe nainsLrean peLroleun diesel disLribuLion sysLen and narkeL, one of
Lhe following would be required:
1. A decision by a najor peLroleun disLribuLor Lo adopL biodiesel and nake iL
available Lo cusLoners,
2. A renewable fuels sLandard requiring peLroleun disLribuLors Lo blend biodiesel
wiLh peLroleun diesel, or
3. 1he developnenL of an alLernaLe secondary sysLen of blending and disLribuLion.
Recommendation #10
The Task force recommends that the Saskatchewan Government evaIuate
aII options for a biodieseI bIending and distribution system in Saskatchewan
that wiII ensure mass market access for IocaIIy produced biodieseI, provide the
impetus for growth of IocaIIy produced biodieseI and bring benefits to key
stakehoIders incIuding primary agricuIturaI producers, ruraI communities, the
petroIeum industry etc. This wouId incIude evaIuating incentive programs to
achieve the objective.
5.0 CONCLUStON
A NaLional kenewable luel SLraLegy will require a differenL paLhway for biodiesel
fron eLhanol Lo encourage a nore rapid developnenL and allow Lhe indusLry
Lo "caLch up. A separaLe klS of Lwo per cenL Lo give Lhe indusLry Line Lo build
capaciLy is needed. lncenLive prograns will be a criLical conponenL of Lhis
sLraLegy for boLh Lhe developnenL of a biodiesel indusLry and Lhe abiliLy for
prinary producers Lo parLicipaLe in a value added indusLry. 1he sLandards and
qualiLy of biodiesel nusL be prioriLy Lo ensure adopLion and accepLance of Lhis
renewable fuel. 1he long Lern susLainabiliLy of a biodiesel indusLry will require
ongoing research and developnenL. 1his includes Lhe building of a bio-indusLrial
econony where biodiesel becones Lhe plaLforn for high values uses. lL will Lake
Lhe efforLs of all Lhe sLakeholders including indusLry, prinary producers and all
levels of governnenL Lo develop a harnonized "Made in Canada "biodiesel. Only
Lhen can SaskaLchewan be assured of a long-Lern, susLainable biodiesel indusLry
wiLh opporLuniLies for rural developnenL.
6.0 RfRNCS
1. SaskaLchewan Canola Crowers AssociaLion and SaskaLchewan Canola
DevelopnenL Connission 8rochure 8iodic:cl 8d:ic:
2. Canadian kenewable luels AssociaLion. LasL nodified 03}30}0
3. LevelLon Engineering LLd. and S&1 ConsulLanLs lnc., 2002. AssessnenL of
8iodiesel and ELhanol Diesel 8lends, Creenhouse Cas Enissions, ExhausL
Enissions and Policy lssues. keporL Prepared for NaLural kesources Canada.
4. van KooLen, C. C. and P. C. 8enLez, 2005. lull CosL AccounLing of Energy
SecLor ProjecLs A keview of MeLhods and ApplicaLion. keporL prepared
for SaskaLchewan EnvironnenL and SaskaLchewan lndusLry and kesources,
vicLoria, Canada.
5. NaLional 8iodiesel 8oard Life Cycle Sunnary
. 8iodiesel: Crowing a New Energy Econony. 2005. Creg Pahl
7. European 8iodiesel 8oard
8. European 8iodiesel 8oard
. Drivers and SLraLegies lnfluencing Lhe Cernan (European) 8iofuels MarkeL.
May 200. Dr. SLeffen Preusser, 1rade Connissioner, Canadian Enbassy,
Cernany
10. 8iocap Canada. A CriLical CosL 8enefiL Analysis of Oilseed 8iodiesel in
Canada. March 200. MarLin |. keaney, niversiLy of SaskaLchewan, W.
HarLley lurLan, niversiLy of SaskaLchewan, PeLrous LouLas, NorLhsLar
Engineering
7.0 APPNDtX
Appendix t: DieseI fueI SaIes by Province
M
o
t
o
r

g
a
s
o
I
i
n
e
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
C
a
n
a
d
a
3
5
,
0
5
2
,
5
7
3
5
,
4
5
,
4
3
,
2
3
,
8
2
4
3
7
,
3
5
,
3
0
5
3
8
,
3
2
2
,
4
4
4
3
8
,
3
3
8
,
0
1
3
3
8
,
8
1
1
,
5
1
,
5
,
5
8
7
4
0
,
2
2
8
,
8
3
0
4
0
,
2
,
5
1
N
f
L
D
5
8
0
,
3
7
1
5
7
1
,
2
7
5
5
8
4
5
5
5
,
2
2
5
7
7
,
1
1
5
5
8
3
,
2
1
5
5
8
3
,
,
2
7
4
0
4
,
3
2
4
5
8
4
,
5
8
5
P
t
1
1
,
4
3
5
1
,
7
4
,
1
8
2
0
,
4
2
7
2
1
8
,
7
5
2
1
3
,
5
1
2
2
1
1
,
5
2
5
2
2
3
,
7
4
1
2
2
,
2
8
1
2
3
4
,
5
3
1
N
o
v
a

S
c
o
t
i
a
1
,
1
,
3
2
0
1
,
1
5
0
,
4
2
1
,
1
4
,
1
8
3
1
,
1
8
1
,
5
1
1
1
,
2
3
8
,
0
1
7
1
,
2
1
7
,
0
0
1
,
1
,
0
2
5
1
,
2
1
4
,
8
1
1
,
2
3
,
1
1
0
1
,
2
,
3
2
8
N
e
w

r
u
n
s
w
i
c
k
5
7
,
2
4
0
3
,
5
0
,
7
5
2
1
,
0
1
8
,
4
8
1
,
0
3
4
,
7
3
1
,
0
1
8
,
0
2
1
,
0
3
1
,
3
2
5
1
,
0
0
,
3
3
4
1
,
0
7
2
,
0
4
5
1
,
0
8
1
,
8
7
4
u
e
b
e
c
7
,
5
,
0
4
2
7
,
,
8
7
8
7
,
7
0
2
2
7
,
8
,
3
0
5
8
,
0
4
1
,
4
1
2
7
,
8
4
,
1
7
8
,
0
7
0
,
4
5
8
,
3
3
2
,
3
1
8
8
,
5
7
1
,
7
8
8
,
5
4
,
5
7
O
n
t
a
r
i
o
1
2
,
7
7
3
,
5
4
1
2
,
8
8
8
,
8
4
0
1
3
,
3
5
5
,
1
5
1
3
,
7
4
5
,
3
3
1
1
4
,
3
4
7
,
3
0
1
4
,
5
5
3
,
7
8
1
4
,
7
1
,
4
7
1
1
5
,
1
3
2
,
3
5
1
5
,
4
0
,
4
4
1
5
,
7
7
4
,
3
7
M
a
n
i
t
o
b
a
1
,
4
3
0
,
0
2
3
1
,
3
,
4
3
1
1
,
3
7
4
,
1
0
1
,
3
3
,
1
,
4
3
1
,
4
2
1
1
,
4
2
5
,
4
4
2
1
,
4
1
3
,
0
5
1
,
4
3
1
,
3
5
1
,
4
5
,
2
1
8
1
,
5
0
0
,
7
1
S
a
s
k
a
t
c
h
e
w
a
n
1
,
,
1
5
2
1
,
7
2
,
2
3
1
,
5
3
,
7
3
1
,
7
2
,
7
1
8
1
,
4
,
5
5
1
,
7
1
,
1
,
8
,
1
4
1
,
8
4
,
5
0
1
,
7
5
,
7
1
,
7
4
7
,
2
3
A
I
b
e
r
t
a
4
,
3
3
2
4
,
4
0
,
3
1
2
4
,
7
0
2
,
5
5
4
,
,
8
2
0
4
,
7
0
,
5
3
1
4
,
5
3
,
7
4
5
,
2
8
7
0
5
,
3
0
2
,
8
5
,
1
8
7
,
4
3
5
,
3
2
0
,
7
4
r
i
t
i
s
h

C
o
I
u
m
b
i
a
4
,
1
8
8
,
7
1
5
4
,
2
7
5
,
3
0
4
,
4
4
,
3
5
8
4
,
0
,
2
7
4
,
7
,
4
,
2
4
,
3
0
3
4
,
5
3
4
,
5
5
4
,
5
3
7
,
0
2
7
4
,
1
7
,
3
8
4
,
8
2
,
4
4
7
D
i
e
s
e
I

f
u
e
I

o
i
I
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
C
a
n
a
d
a
1
,
1
,
3
1
3
1
5
1
,
2
5
2
1
,
2
8
0
,
3
0
7
2
1
,
4
2
,
0
0
2
2
,
2
5
,
3
0
4
2
3
,
3
8
0
,
3
3
8
2
2
,
,
8
2
2
,
5
4
2
,
8
7
2
3
,
7
1
1
,
5
7
4
2
5
,
1
5
3
,
4
4
5
N
f
L
D
4
5
8
,
0
7
4
7
,
8
0
5
4
2
,
3
2
7
5
5
5
,
3
4
7
5
8
8
,
8
4
4
3
4
,
3
0
0
3
2
,
4
3
3
4
4
,
7
1
5
0
,
8
7
3
,
8
8
7
P
t
7
8
,
2
8
5
,
0
8
8
7
,
2
1
2
,
5
7
1
0
0
,
1
1
0
,
1
4
1
0
3
,
2
5
8
,
3
3
1
0
2
,
0
8
0
1
1
2
,
3
2
1
N
o
v
a

S
c
o
t
i
a
1
7
,
8
0
5
7
3
,
4
1
1
,
1
3
3
,
1
3
5
7
2
3
,
2
1
3
7
4
7
,
3
5
7
2
1
,
2
8
8
7
4
3
,
4
0
2
7
8
,
8
5
3
8
3
1
,
7
0
N
e
w

r
u
n
s
w
i
c
k
8
0
,
0
1
1
7
1
0
,
1
5
5
7
3
4
,
5
,
2
8
8
8
8
2
,
8
1
,
3
8
5
4
5
,
4
8
2
7
,
8
7
7
1
7
,
3
7
1
,
5
4
4
u
e
b
e
c
3
,
4
1
2
,
7
0
8
3
,
3
0
4
,
2
0
1
3
,
5
5
2
,
1
7
1
3
,
7
3
5
3
3
,
8
2
7
,
8
5
7
3
,
8
0
5
,
7
8
0
3
,
4
2
,
3
8
3
3
,
5
4
5
,
7
7
3
,
8
5
1
,
0
7
4
,
0
7
7
,
2
7
O
n
t
a
r
i
o
4
,
8
7
,
4
5
0
5
,
1
3
7
,
1
8
5
,
5
0
2
,
1
4
4
5
,
7
3
,
7
,
1
3
4
,
4
4
4
0
0
,
5
5
,
2
4
,
2
1
,
3
8
,
7
3
2
,
4
8
,
5
4
5
4
,
8
8
M
a
n
i
t
o
b
a
1
7
,
4
4
7
4
3
,
7
1
8
8
8
3
3
1
8
1
7
,
8
8
8
8
4
,
4
5
8
8
3
0
,
4
8
4
8
0
,
3
8
8
8
8
5
,
0
4
5
7
1
,
8
5
0
S
a
s
k
a
t
c
h
e
w
a
n
1
,
5
0
1
,
4
0
1
1
,
0
1
,
1
8
8
1
,
5
,
8
7
1
1
,
4
8
5
,
1
7
1
1
,
5
0
2
,
4
1
,
5
5
,
3
0
1
1
,
3
5
,
1
3
1
1
,
4
1
8
,
3
8
4
1
,
5
3
2
,
5
4
2
1
,
0
4
,
7
2
1
A
I
b
e
r
t
a
3
,
3
7
2
,
3
7
5
3
,
4
8
,
5
2
4
,
1
2
,
3
1
2
4
,
2
7
4
,
5
7
5
4
,
3
1
8
,
5
5
2
4
,
8
4
,
2
8
4
,
8
0
4
,
1
8
0
4
,
4
4
8
,
4
3
4
,
2
5
,
5
7
8
5
,
2
5
7
,
8
7
r
i
t
i
s
h

C
o
I
u
m
b
i
a
3
,
0
2
,
2
3
3
,
1
3
,
1
0
3
,
1
5
,
7
5
3
,
0
8
2
,
7
5
0
3
,
1
3
3
,
8
1
3
,
1
4
,
8
4
3
,
1
5
1
,
3
5
2
3
,
2
1
0
,
5
7
3
,
2
8
1
,
5
3
,
4
7
3
,
4
2
0
8.0 tNfORMATtON RfRNCS
AIternative fueI tndex www.eere.energy.gov}afdc
AgricuIture and Agri-food Canada ww.agr.gc.ca
iocap www.biocap.ca
Canadian RenewabIe fueIs Association www.greenfuels.org}index.hLnl
CanoIa CounciI of Canada www.canola-council.org
uropean iodieseI oard www.ebb-eu.org
Manitoba Report www.gov.nb.ca}esL}energy}agri
NationaI iodieseI oard www.biodiesel.org
Saskatchewan AgricuIture and food www.agr.gov.sk.ca
Saskatchewan CanoIa DeveIopment Commission www.saskcanola.con
Saskatchewan nvironment www.se.gov.sk.ca
Saskatchewan tndustry and Resources www.ir.gov.sk.ca
US Department of AgricuIture www.usda.gov
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