CLEAN FUEL STANDARD IS JUST ANOTHER TAX BUT WILL IT HAVE BENEFITS FOR FARMERS?

OTTAWA — The federal government’s proposed Clean Fuel Standard could be a boost for the grain and oilseed industry. It could also be a significant problem for farmers. As usual, the devil’s in the details. In this case, those details are yet to be decided and the clock is ticking.
As far as the feds are concerned, the plan to reduce carbon emissions provides an opportunity to boost the domestic biofuel industry, which imports about 40 per cent of its required feedstock. Canadian Canola Growers’ Association’s policy manager Steve Pratte said the standard could be a big boost for farmers: about two million tonnes of canola go into biodiesel every year, and that could jump by anywhere from one to five million tonnes under the new regulations, he said. The problem is that the regulations don’t have any requirements that industries use biofuels per se, just that they reduce their carbon emissions. Using biofuels isn’t the only way to do that.
The Clean Fuel Standard has been on the agenda since fall of 2016, but the latest and biggest update came last month, when the government updated its land use requirements so that farms that cleared certain types of land after 2020 wouldn’t be allowed to supply the biofuel industry. That came after outcry from industry against the government’s initial proposal from the summer, which would’ve been retroactive to 2007.
Grain Farmers of Ontario chair Markus Haerle said the GFO supports the initiative, at least on principle, as being good for farmers by boosting demand from the biofuel industry for corn, soybeans and wheat. It’s the actual practice that has caused the organization such alarm. The initial land-use requirements from government would’ve locked 80 per cent of Ontario farms out of the biofuel industry, he said, and GFO wanted those restrictions cut out entirely.
“It could be a game-changer for grain farmers,” Haerle said, and in a good way, similar to how provincial mandates for ethanol in gasoline were a big boost for Ontario grain farmers. But the initial regulation as proposed would be a game-changer in a very bad way. “It won’t be a benefit if we can’t supply (the industry) anymore.”
Canadian Canola Growers’ Association’s policy manager Steve Pratte said that the government hasn’t said how it will monitor land-use to satisfy its requirements, which could mean creating a big bureaucracy and more paperwork for farmers.
Bottom line for growers is making sure that the proposals are implemented in a way that benefits farmers, Pratte said, without adding a bunch more work for them.
But time is running short and the regulations still need significant changes, he said. The government’s proposed schedule is to have the regs posted in the Canada Gazette by the fall (so before Dec. 21) for 75 days. Long-term, the plan is to implement the new regulations by the dawn of 2022.