The Government of Prince Edward Island took another step forward today in efforts to establish a biodiesel facility in the province. Premier Pat Binns and Minister of Environment, Energy and Forestry Jamie Ballem released a request for expressions of interest for establishment of an oil seed extraction and biodiesel manufacturing plant in Prince Edward Island. Premier Binns said biodiesel has both environmental and economic benefits for PEI. “Each year, Islanders use 100 million litres of diesel fuel and almost 200 million litres of fuel oil to heat homes. Replacing a portion of these imported fossil fuels with biodiesel would not only provide a measure of energy self-sufficiency, it would reduce greenhouse emissions which contribute to climate change,” said Premier Binns. “Add to that the opportunities it presents for farmers to grow energy crops, and we believe there is potential for a biodiesel plant in PEI. This request for expressions of interest will help us identify how we can make this happen.” Biodiesel is a cleaner-burning alternative fuel made from natural, renewable sources such as canola, recycled vegetable oils and animal fats. Most diesel equipment and oil furnaces can use blends of up to 20 per cent biodiesel with regular diesel or fuel oil without any modification. This would reduce greenhouse gas emissions by 16 per cent. In PEI, that’s a reduction of 128 kilotonnes of greenhouse gases - the equivalent of taking about 20,000 cars off the road. Minister Ballem said the Province would like to see a biodiesel facility with an annual production of 60-100 million litres of biodiesel, with the lower production capacity meeting the needs of the PEI market and the higher capacity seeing PEI become a biodiesel supplier within the Maritime region. The facility would include an oilseed extraction plant where canola seed would be crushed and the oil pressed out and sent to the biodiesel plant to be refined. Government has set out certain other guidelines for a biodiesel facility which companies submitting expressions of interest must meet. Minister Ballem said the primary consideration is that the facility would have to use approximately 10 million litres of canola oil a year which would provide the opportunity for farmers to grow canola as part of a three-year crop rotation. As well, there would have to be an opportunity for the farmers who are producing the canola to have a share of ownership in the facility. “Study has shown the province could produce about 12,000 hectares of canola a year with potential yields of 2.5 tonnes per hectare, so Island farmers could supply 10 million litres of canola oil a year,” said Minister Ballem. “This is an opportunity for agricultural producers to grow canola in rotation, get a higher return per hectare than other rotation crops, and use the biodiesel in their operations. It’s a perfect blend between agriculture, environment and energy.” While meeting the guidelines set out by Government, the request for expressions of interest asks companies to identify and provide details on the size of a biodiesel facility and technical systems to be used, capital and operating cost estimates, and an ownership model and financing approach. Minister Ballem said the expressions of interest may come from a range of companies from those interested in providing the technical systems for a biodiesel facility, to those interested in building it and turning it over to the Province, or those interested in building, owning and operating the facility. He said Government is open to all options at this point, provided the ownership model includes PEI canola producers. Depending on the level of information received in the expressions of interest, Minister Ballem said the next step could be to issue a request for proposals or begin negotiations with one or more companies that express interest in the project. The deadline for expressions of interest is February 23, 2005. Submissions will be evaluated by the PEI Biodiesel Working Group which consists of representatives from the Departments of Environment, Energy and Forestry; Agriculture, Fisheries and Aquaculture; and Development and Technology. Exploring the potential for a biodiesel plant is part of the PEI Renewable Energy Strategy. Released last year, the strategy includes an action plan to reduce PEI’s reliance on imported fossil fuels by enhancing the role of renewable energy. The Renewable Energy Act, passed during the fall session of the Legislative Assembly, puts into effect many of the action items in the strategy. BACKGROUNDERPRINCE EDWARD ISLAND BIODIESEL INITIATIVE What is biodiesel? Biodiesel is a cleaner-burning alternative fuel, produced from renewable resources such as canola, recycled vegetable oils and animal fats. It contains no petroleum, but it can be blended with petroleum diesel or light fuel oil to create a biodiesel blend. This is most often 80 per cent petroleum diesel or light fuel to 20 per cent biodiesel which is known as B20. How is biodiesel used? Biodiesel is registered as a fuel and fuel additive with the Canadian Environmental Protection Agency and meets clean diesel standards established by Environment Canada. Most diesel equipment and oil furnaces can use blends of up to 20 per cent biodiesel with regular diesel or fuel oil without any modification.What are the environmental benefits of biodiesel? According to the US National Renewable Energy Laboratory, the use of biodiesel (B20) will reduce greenhouse gas emissions by 16 per cent. Islanders use about 100 million litres of diesel fuel and almost 200 million litres of furnace oil to heat homes. In 2003, greenhouse gas emissions from these sources totalled 778 kilotonnes or roughly 35 per cent of all emissions in Prince Edward Island. Using a B20 blend in diesel and fuel oil would result in a reduction of 128 kilotonnes of greenhouse gas emissions annually. This is more than half the emission reduction target which PEI committed to in the Climate Change Action Plan signed by New England Governors and Eastern Canadian Premiers.What are the economic benefits of biodiesel? The Agricultural Crop Rotation Act provides for mandatory three-year rotation for certain row crops including potatoes, in order to maintain and improve water quality, and to preserve soil quality and productivity. A biodiesel industry in Prince Edward Island would provide an opportunity for Island farmers to grow oilseed crops such as canola in rotation. Preliminary study has shown that farmers could produce about 12,000 hectares of canola a year with potential yields of 2.5 tonnes per hectare. This translates into 10 million litres of canola oil a year. The request for expressions of interest for establishment of an oil seed extraction and biodiesel manufacturing plant in Prince Edward Island stipulates that canola producers have an opportunity to have a share of ownership in a PEI biodiesel plant. Agricultural operations would also be one of the primary users of the biodiesel that is produced as they use about 40 million litres of diesel fuel annually.