http://www.planetark.org/dailynewsstory.cfm/newsid/19967/story.htm Canadian ethanol needs subsidy boost - industry
CANADA: February 26, 2003 WINNIPEG, Manitoba - Canada's fledgling ethanol industry needs an injection of federal subsidies to fuel its growth and reach federal environmental targets, analysts and lobbyists said yesterday. Ethanol costs 20 to 30 Canadian cents (13 to 20 cents) per liter more than the gasoline it displaces, said Dave Tupper, an economist with Agriculture and Agri-Food Canada. "We know that ethanol does not compete in economic terms: it requires public intervention wherever it is used in the world," Tupper told an audience at Grain World, a major agricultural market outlook conference. The Canadian government wants to see 35 percent of gasoline contain 10 percent ethanol by 2010 as part of its commitments to reduce greenhouse gas emissions under the Kyoto Protocol, Tupper said. That would represent a market for 1.4 million liters of ethanol - seven times what Canada currently produces - and extra costs of C$350 million for Canadians through tax exemptions, direct industry subsidies or increased fuel prices, Tupper said. Canada ratified the Kyoto accord on global warming in December. It requires Canada to reduce greenhouse gas emissions by 6 percent below 1990 levels by 2012. Currently, the ethanol portion of fuel is exempt from a 10-cent per liter federal tax, as well as most provincial road taxes. Ethanol lobbyists are hopeful the federal government will provide C$400 million to ethanol producers, although a recent federal budget did not earmark cash for that purpose. "I don't believe we will reach 1.3 billion liters in the current climate," said Bliss Baker, president of the Canadian Renewable Fuels Association. "Energy sources around the world receive subsidies," he said. The U.S. Congress is considering regulations and incentives that would see the market for alternative fuels zoom to 5 billion U.S. gallons (20 billion liters) over the next decade from the current 2 billion gallons, said Brian Kelly, a Canadian consultant who has studied the industry. More than 100 Canadian towns are interested in attracting ethanol plants, Baker said, noting a 150 million liter plant provides C$140 million to its immediate economy per year. There are more than 20 business plans in the works representing more than 1 billion liters of production, he said. "This is telling me we have a wave, or a pent-up supply of ethanol on the horizon," Tupper said. Four Canadian ethanol plants currently produce about 175 million liters of fuel ethanol, Tupper said. Canada imports more than 100 million liters from the United States each year. A fifth plant, producing about 26 million liters a year, went bankrupt in December. Tupper said a 150-million liter plant employs about 40 people. He said 400 to 500 people could eventually be employed by the Canadian ethanol industry, while Baker pegged the number at 1,000 to 2,000. But a prominent agricultural economist said more ethanol plants on the Canadian prairies could stall growth in the livestock industry, which holds more economic potential. Daryl Kraft of the University of Manitoba said ethanol plants would eat up feed grain supplies and require more imports of U.S. corn in some years, raising feed costs. "If this industry is going to thrive here, it's going to require more subsidies than the U.S. (industry)," Kraft said. Story by Roberta Rampton REUTERS NEWS SERVICE Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuels list archives: http://archive.nnytech.net/ Please do NOT send Unsubscribe messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
