Biofuel law a diesel-user’s soar point

TORONTO – – Spiking fuel prices makes for interesting bedfellows.

This week, a coalition of the Canadian Trucking Alliance (CTA); Motor Coach Canada (MCC) and the Owner-Operator’s Business Association of Canada (OBAC) joined forces to raise an alarm about the price impact that a federal government-imposed biodiesel mandate scheduled to come into force on July 1st of this year will have on their members.

The mandate, the coalition argues, must be amended to protect diesel-fuel consumers from prices that exceed those of regular diesel as well as possible supply shortages and other operational issues.

As it is, the government’s own regulatory impact analysis statement (RIAS) said the biodiesel mandate will cost taxpayers $2 billion over the next 25 years and increase pump prices for diesel fuel and reduce the fuel efficiency of commercial vehicles while generating little in the way of GHG reductions

The coalition points out that in some U.S. states (Massachusetts and New Mexico), the biofuel mandates can be suspended if the price of biofuel exceeds that of regular diesel.

According to the coalition, "consumer concerns have received short shrift from politicians eager to curry favour with and harvest votes from big agribusiness at the expense of the people and businesses that operate the vehicles that will have to use the fuel."

They argue that the price of canola — expected to be the prime feedstock for biodiesel in Canada — is already at record prices and volumes. Moreover, prices will be vulnerable to all those things that impact on agricultural commodity prices that no one has any control over, such as the weather, floods, etc.

“The biodiesel mandate is going to exacerbate the problem of higher fuel costs through increased prices at the pump and through reduced fuel content of biodiesel,” said David Bradley, president and CEO of the 4,500 member trucking alliance. “The only question is by how much. We can’t control some of the things that are currently impacting fuel prices, but we can avoid introducing policies domestically that could make things worse."

Joanne Ritchie, OBAC’s executive director, says the cost increases associated with biodiesel will hurt her members — mostly single-truck operators.

“Fuel is the largest single cost component for these small businesses; a few cents either way can be the difference of whether they survive or not. Even the most conservative estimates suggest this regulation will take $4,000 to $6,000 out of my members’ pockets with no opportunity for a payback."