Environmental concern is bringing diesel fuel full circle.
The original engines, invented by Rudolf Diesel in the 19th century, ran on peanut oil but problems with viscosity forced a switch to petroleum-based fuel. Now, the increasing focus on climate change and greenhouse gas emissions, along with concerns about the long-term supply of non-renewable energy, has biodiesel back in the spotlight Toronto-based Biox Corp. is preparing a new $24-million biodiesel-production facility in Hamilton that is expected to be fully operational in October.
The Biox plant will produce 60 million litres of biodiesel a year - increasing North American biodiesel production by about 50 per cent, says chief operating officer Kevin Norton.
In addition to agricultural oils such as soybean and canola that are normally used to produce biodiesel, Biox uses less expensive oils, such as rendered animal fat and cooking oil from fast-food restaurants. The result is a product that is cheaper to produce.
|Illustration courtesy Biox Corp.|
|Canadian biodiesel production will increase 16-fold with facility in Hamilton.|
David Boocock, a University of Toronto chemical engineer, developed the process. A pilot Biox plant in Oakville that opened four years ago has been producing one million litres of biodiesel annually.
The privately owned company says it has found a 40-per-cent saving in capital cost and 50-per-cent saving in operational cost compared to other biodiesel processes.
While diesel fuel made from renewable resources has been known since the diesel engine was developed, the process was slow and inefficient, making it difficult to compete with petroleum-based diesel on price. The Biox process does not require high heat, is faster to make and is capable of using a variety of oils rather than just agricultural seed oil, the company says.
"We tend, as Canadians, to think of ourselves as second fiddle, and here we are - world leaders," says Gord Surgeoner, president of Ontario Agri-Food Technologies, an organization that promotes agri-food technology and encourages investment in the sector.
He adds that Biox is the kind of company his organization wants in the province.
"The technology was developed at the University of Toronto, it is 100 per cent Canadian-owned and the financing is 100-per-cent Canadian," Surgeoner says. "In my opinion, it will be successful."
Alternative sources of fuel are especially important to strengthen the provincial economy, as Ontario has a limited number of oil wells, he says.
Ontario consumes 12 billion litres of diesel annually, a rate that is growing by one to two per cent a year, Norton says.
Last year, 100 million litres of biodiesel were produced at 18 facilities across North America, Norton says. Total Canadian production, at a small plant in Montreal and another in Western Canada, was only three million litres, he adds.
"We're the only ones tackling it on a large scale," Norton says. He does not, however, predict an immediate drop in biodiesel prices, because demand outstrips supply and overall diesel consumption is increasing.
Biodiesel has been available in the Ontario retail market since last year, when two biodiesel stations opened - one in Unionville and a second on Queen Street in downtown Toronto. Canada's first marine biodiesel station opened in Penetanguishene last June.
Topia Energy Inc. of Ottawa supplies all three stations, which are operated by retail agent Sam Goldberg of Alternate-NRG Inc. The retail stations sell B20, which is a 20-per-cent biodiesel blend, and the price is competitive with other diesel outlets, Goldberg says.
"Three years ago in the United States, there were no biodiesel stations - and now there are over 300," Goldberg says. He adds that he expects the market also will grow in Canada.
"We will be selling our product to large oil and gas companies or distributors that are already buying diesel fuel," Norton says. The 100-per-cent biodiesel will then be blended with diesel and resold to municipalities, transit authorities and retailers.
Guelph has been using biodiesel in city buses for two years and purchases two million litres of U.S.-made biodiesel annually.
A 10-per-cent biodiesel blend is used during the winter months and a 20-per-cent blend is used the rest of the year, says Derek McCaughan, director of public works for the City of Guelph. Rather than the distinctive smell of diesel, municipal buses emit an odour that is similar to popcorn.
The higher cost of biodiesel, however, nearly led Guelph city council to axe the biodiesel program and return to petroleum diesel in order to save $230,000 from the 2005 budget. The city expects to spend about $1.8 million on diesel fuel this year.
"The council's actions show they have some commitment to it," McCaughan says.
Surgeoner says biodiesel is costlier because it is imported and because generally only green, or renewable, oils are used to produce it.
Biox officials believe the company's technology can produce biodiesel more cost effectively and at a price that is competitive, compared to petroleum diesel.
Currently, biodiesel is exempt from the 14.3-cent-per-litre Ontario road tax and a four-cent-per-litre federal excise tax - a break that is intended to help build the new industry.
The tax break "definitely helps us out," Norton says.
(Janet Baine can be reached at email@example.com)