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Manitoba to become first province to implement biodiesel mandate

WINNIPEG -- Manitoba will become the first province in Canada to mandate the use of biodiesel. Energy Minister Jim Rondeau says that beginning Nov. 1, the province will require that an average of two per cent of all diesel fuel sold in the provin...

WINNIPEG -- Manitoba will become the first province in Canada to mandate the use of biodiesel.

Energy Minister Jim Rondeau says that beginning Nov. 1, the province will require that an average of two per cent of all diesel fuel sold in the province be biodiesel.

He says forcing oil companies to sell the renewable fuel is expected to cut greenhouse gas emissions in the province by 56,000 tonnes a year.

That's the equivalent of taking 11,000 cars off the road.

In the 2007 provincial election campaign, the NDP promised to implement a five per cent biodiesel mandate by 2010.

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Rondeau says the province decided to take a gradual approach to ensure a more seamless transition for the industry.

"We will be going to a five per cent blend eventually, but we want to do it with the co-operation of the industries ...and we want to do it in a very sure-footed way."

Biodiesel is a renewable fuel that can be produced from a variety of sources, including vegetable oils made from canola, soybeans and sunflowers.

There is already a licensed biodiesel producer in Winnipeg -- Speedway International -- capable of supplying the province's entire needs under the new mandate for up to 22 million litres of biodiesel annually.

Speedway president Royce Rostecki could not be reached for comment late on Wednesday.

Manitoba may be first off the mark, but other jurisdictions won't be far behind in requiring the use of biodiesel.

British Columbia is expected to introduce its own mandate effective Jan. 1.

And the federal government has announced that it plans to implement a national mandate of at least two per cent by 2012.

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The biodiesel industry is expected to create an important new market for Canadian farm-ers, particularly those with oilseed that fails to meet food-grade standards.

Rondeau also said Wednesday that the province will help jump-start the industry by offer-ing biodiesel producers a 14-cent-a-litre subsidy. The subsidy, which is to end in five years, will replace the government's current fuel tax exemption on biodiesel.

The fuel industry will be given some flexibility in how it achieves its two per cent target, Rondeau said. Oil companies are expected to blend as much as five per cent biodiesel into diesel fuel in the warm months, with lower blends in the winter.

The minister said mandating the use of biodiesel should not drive up fuel costs for farm-ers, truckers and others who burn diesel in Manitoba, since the cost of blending is very low.

Last year, Manitoba mandated the blending of grain-based ethanol into gasoline sold in the province.

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