Continued Opposition

Canadian Trucking Alliance persists with biodiesel resistance
By Erin Voegele | August 16, 2011

A petroleum pricing expert working with the Canadian Trucking Alliance is disputing the cost-saving benefits of biofuels. Michael Ervin, vice president and director of consulting services with Kent Marking Services Ltd., recently completed an analysis for the CTA that asserts renewable fuels could actually increase the price consumers pay at the pump.

“It is entirely likely that a more robust ethanol renewable fuel standard (10 percent, for example) might lead to higher gasoline prices, particularly if existing incentive and tax exemptions were removed, since ethanol is a relatively expensive gasoline additive,” Ervin says. “The same may very well hold true for biodiesel, once better price/cost transparency is established for this product.”

A 2 percent biodiesel mandate established by the Canadian federal government went into effect July 1, prompting criticism from some groups, including the CTA. While the CTA’s analysis questions the cost benefits of biofuels, a Regulatory Impact Analysis Statement published by the Canadian government claims the estimated average price increase of the biodiesel mandate over the next 25 years would equate to approximately one-third of a cent per liter, which would be unnoticeable when compared to daily fuel price fluctuations. A review of the RIAS commissioned by the Canadian Renewable Fuels Association further determined that consumers are likely to pay less at the pump for biodiesel blended fuel as production costs drop.

—Erin Voegele

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