Biofuel producer wants a level playing field.
Published Tuesday March 25th, 2008
By RICHARD DUPLAIN
duplain.richard@dailygleaner.com
New Brunswick's only producer of biofuels wants tax incentives for biofuel use and production.
"All we need is a level playing field," said Ray Carmichael, the business development manager for Eastern Greenway Oils Inc. of Waterville.
A level playing field means an equal chance with competitors from south of the border and that means a reduction in taxes, Carmichael said.
Speaking this week at public forums in Charlottetown and Summerside, P.E.I., Carmichael said the price for raw materials from which biofuels are made is skyrocketing.
"We're lucky in Waterville because we produce our own raw materials for production, but that inventory will run out this summer," he said.
A tonne of raw fibre to be used in biofuel production costs between $500 and $700. A little more than a year ago the same tonne cost $350, Carmichael said.
He said reducing or eliminating the tax on the biofuel portion of diesel fuel would be a big help for his company and others to compete with biofuel products made in the United States from Canadian raw materials and sold here.
He said biofuel products in the U.S. are subsidized by 26 cents per litre.
"If we removed the 13-16 cent per litre of fuel tax, it would be a big help."
Some provincial governments have agreed to set a single standard to encourage the use of biofuels in the region similar to standards in central and western Canada.
P.E.I.'s Development Minister Richard Brown recently said any biofuel policy has to be good for farmers, the environment and consumers.
The policy director for the New Brunswick Conservation Council believes tax incentives should be considered rather than a biofuel policy.
David Coon said Atlantic Canadian governments should agree to eliminate the provincial portion of the harmonized sales tax on fuel-efficient vehicles.
Taxes should be eliminated to encourage people to conserve fuel, he said.
Coon said there are two primary drawbacks to the biofuel production and use.
"We can't grow enough to feed all the automobiles on the roads today. It's almost immoral to even think of doing that when you consider all the hungry people in the world today," he said. "What we need to do is drive less."
Coon said the production of crops for biofuel production creates more greenhouse gases than it eliminates.
"When applied the nitrogen-based fertilizers give off a nitrous oxide gas that's more harmful than carbon dioxide," Coon said.
"That could be resolved if we used waste products like wood and crop residues and it wouldn't compete with food supplies."