The head of a national foundation that funds sustainable technologies says Canada needs to boost spending in research and development of “clean” air and energy innovations to maintain a competitive advantage in the international market.

“I believe if Canada does not move quickly to get up to speed on technological innovation, we will not benefit from all the (developments) surrounding climate change,” said Vicky Sharpe, president and CEO for Sustainable Development Technology Canada (SDTC), a not-for-profit corporation set up by the federal government two years ago.

Sharpe was in Calgary last week as part of a public lecture series sponsored by the Macleod Institute, an independent environmental research group based at the University of Calgary.

She said several areas of sustainable technologies related to climate change are ripe for further development, including so-called “clean” energies using fuel cells, wind, solar and biomass sources.

But she added there still is a “disconnection” in funding opportunities as new, unproven technologies begin their move through the innovation chain – the path from research to commercialization. The weakest link for funding in the chain occurs prior to commercialization in what Sharpe called the pre-venture capital gap.

SDTC chief Vicky Sharpe expects positive response to latest funding round.

Attracting the attention of venture capital at this pre-market stage “is a serious structural issue for any technology developer in this country,” Sharpe said, as many VCs stung by the last tech crash are sitting on their resources or investing only in familiar companies and technologies.

In addition, sustainable development technologies are considered by many to be more capital intensive with longer development cycles. Within Canada’s venture capital community, an estimated $17.3 billion was spent on deals between 1996 and 2000, according to figures provided by SDTC. Of this, energy and environment deals were valued at $435 million, representing about 2.5 per cent of the deals.That amount has risen recently to about four per cent as interest in clean technologies continues to grow.

The Ottawa-based SDTC, backed by $100 million in federal money over a five-year period, launched its third round of funding last week to help bridge the gap in the innovation chain. “We’re looking forward to another really large response from the community,” Sharpe said.

SDTC acts a go-between to attract funding from the public and private sectors, particularly the venture capital community, to promote technologies related to climate change and air quality. It helps companies strengthen their applications at the proposal stage, and takes a partnership approach to commercialization by introducing technologies developed by the academic community and private sector to potential manufacturers and end users.

Previous rounds have attracted more than 500 groups, or consortia, representing more than 2,000 Canadian companies and institutions, who requested a total of $876 million.

Proposals are judged primarily on the potential impacts the technology can bring to bear on GHG emissions.

Eight projects totalling $6.61 million, plus $42.4 million in leveraged funding from the private sector, have been approved by the foundation. Another 24 applications from the last round are still under consideration.

The approved projects include:

* Bio-Terre Systems (Quebec): A process designed to produce energy from hog manure and to manage nutrients from intensive pig farming in a sustainable manner.

* Carmanah Technologies (Victoria): An adaptation of solar-powered LED technology to edge-lit signage.

* The Conserval Group (Toronto): A project to enable greater utilization of building surfaces to capture solar energy and convert it to warm air.

* CO2 Solutions Inc. (Quebec): An enzyme bioreactor designed to operate in an aqueous environment to sequester CO2 in the form of inert compounds.

* Mabarex Inc. (Quebec): A two-step wet granular drying process that dries paper mill biomass at lower temperatures than conventional processes, saving energy.

* Nova Chemicals Corp. (Calgary): New membrane technology for olefin-paraffin separation, used in many industrial processes. This technology could reduce the capital cost of equipment while minimizing energy consumption.

* Suncor Energy (Calgary): A closed-cycle sequestration project designed to capture CO2 emissions and inject them into local subsurface coal reservoirs to produce enhanced volumes of coal bed methane.

* Westport Innovations (Vancouver): A truck fuel efficiency project to demonstrate the feasibility of operating heavy-duty trucks using liquefied natural gas as the primary fuel.

Sharpe said if all the technologies from the first round of funding applications were successful, they would reduce greenhouse gas (GHG) emissions in Canada by about 11.2 mega-tonnes within 2008-2012, the first commitment period under the Kyoto Protocol. While those reductions are likely not achievable, she added, they still represent a significant opportunity.

Yet, as it works to leverage public and private sector funding for research and development into sustainable technologies, the SDTC in itself is not a sustainable fund, Sharpe said. “We have every hope that you don’t just put in place something like SDTC and just leave it with $100 million,” she said, adding she hopes additional funding will be forthcoming to allow the program to continue.

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