OTTAWA (CP) -- The federal government's massive investments in biofuels will be of little benefit in cutting dependence on fossil fuels or reducing greenhouse emissions, suggests a study by the Library of Parliament.
The report casts doubt on one of the biggest green initiatives in the Conservative budget - a C$1.5-billion investment over seven years to promote renewable fuels such as corn-based ethanol.
Ottawa has introduced a regulation requiring that Canadian gasoline consist of 5%renewable content by 2010. It also intends to require that diesel fuel and heating oil contain two percent renewable content by 2012.
The regulations have been couched as environmental initiatives and the Canadian Renewable Fuels Association has launched an extensive advertising campaign suggesting biofuels will clean up the nation's air.
But a study by Frederic Forge of the library's science and technology division says regulations to promote biofuels will have ''relatively minor impact'' on reducing greenhouse emissions across Canada.
''In fact, if 10% of the fuel used were corn-based ethanol (in other words, if the E-10 blend were used in all vehicles) Canada's greenhouse gas emissions would drop by approximately one percent,'' says the study, dated March 8.
Nor will biofuels have much impact in reducing dependence on oil and gas: ''Global production is still too small and the need for raw materials is still too high for biofuels to have a significant impact on the fuel market and be able to compete with fossil fuels.''
It cites an article in New Scientist as concluding that Canada would have to use 36% of its farmland to produce enough biofuels to replace 10% of the fuels now used in transportation.
The drive to increase production of biofuels is also under way in the United States and other countries, leading to concern that global food prices could rise as farmland is diverted from food to energy production.
''Some observers believe that there is already competition between the two markets: according to the United Nations Food and Agriculture Organization, the rising demand for ethanol derived from corn is the main reason for the decline in world grain stocks during the first half of 2006.''
The study calls for greater focus on biodiesel, which in Canada is manufactured mainly from canola, and which brings a better payoff than ethanol in reduced emissions.
It also underlines the potential of cellulosic ethanol, which is made of waste products like straw and wood chips, rather than from food crops. Iogen, an Ottawa-based company, is a world leader in this technology, and is currently negotiating to build its first commercial plant.
The budget provides C$500 million for ''next generation'' biofuels, and it is widely expected that this will be used in part to support the Iogen process.
The Canadian Renewable Fuels Association calls the report ''factually incorrect.''
''Canada's renewable fuel standard will reduce GHG (greenhouse gas) emissions by over 4.2 megatonnes,'' says the association. ''The equivalent of taking over one million cars off the road each and every year.''
The association says ''the use of 10% ethanol blends reduces greenhouse gas emissions by 18%-20% compared with conventional gasoline, according to Argonne National Laboratory (University of Chicago and U.S. Department of Energy).''
The association does not identify the study from which those figures are taken, but it doesn't agree with what is stated in a report by Michael Wang of the Argonne National Laboratory in September 2005.
The renewable fuels association also notes that biofuels create economic activity and jobs in Canada.
''Properly implemented, the new renewable fuels standard will lead to over 20 new world-class biofuels facilities in Canada, create over 14,000 new jobs in rural communities and provide a new market for over 200 million bushels of Canadians grains and oilseeds,'' the association said.
Many environmentalists acknolwedge the benefits of corn ethanol for the farm economy, but they say it should not be presented as a program for cleaning the air.
(c) The Canadian Press 2007