Bonin sees new biodiesel plant before summer.

The Greater Sudbury-based proponents of Canada's first commercial biodiesel manufacturing plant are expectant their vision will become reality this year.

Nickel Belt MP Ray Bonin expects $1.8 million in federal funding will be released by spring to subsidize a private alternative fuel producer--Topia Energy of Ottawa--in their efforts to build Canada's first commercial biodiesel manufacturing plant in Sudbury.

Bonin emerged from a Dec. 8 Liberal caucus meeting in Ottawa "100-per-cent sure" the project has the approval of Natural Resources Minister John Efford, whose department oversees funding for renewable fuel projects.

Bonin remains "very" confident a plant will be up and running by summer.

Topia Energy wants to build a 20-million-litre-a-year biodiesel manufacturing plant in Sudbury as the first tenant in the city's proposed eco-industrial park on The Kingsway.

Biodiesel is touted as a lubricity agent that prolongs diesel engine life, cleans fuel systems and creates fewer harmful emissions. It's a clean and renewable resource using canola, soy and other agriculture feedstock that may create a new market for crop farmers in Northern Ontario.

Bonin wants an official letter of approval for the project from Efford. That could fast-track the project and allow Topia to start construction sooner rather than later.

"We know in the spring it will be approved, but we're pushing government to do it now," says Bonin.

He wants agricultural groups in northeastern Ontario to think biodiesel in planning their crops for the upcoming season.

After months of lobbying, Bonin says the biodiesel project has the personal support of Prime Minister Paul Martin as well as approvals from the Ministers of Industry, Finance and Environment, and FedNor Minister of State Joe Comuzzi.

In last spring's federal budget, the Liberals unveiled a $1-billion plan to cut greenhouse gas emissions with a green energy investment fund for renewable energy technologies. The initiative was funded through Ottawa's sale of its shares of Petro Canada.

About $200 million from the sale was earmarked for a Winnipeg environmental foundation with $800 million to support emerging environmental technologies over seven years.

Bonin says money is available to build ethanol plants but cabinet must modify program rules to permit Sudbury's biodiesel plant to be subsidized.

But such an agreement is not without precedent. Ottawa has provided dollar-for-dollar funding for alternative fuel manufacturing projects including $22 million for Suncor Energy to build an ethanol plant near Sarnia.

Topia president Govindh Jayaraman is encouraged by the project's momentum and expects to be in full operation early this year, if city zoning and permits are approved, but was mum on the details and declined to give a specific date.

"All levels of government really understand the importance and time sensitivity and are really excited about running after this opportunity."

Topia sells biodiesel at the pumps at two stations in Toronto and has contracts to supply fleet vehicles for the Toronto and Ottawa Transit Commissions, using fuel imported from the United States.

Jayaraman says Canada has fallen behind in recognizing biodiesel's potential and points out the U.S. government offers tax incentives and subsidizes manufacturers.

"Let's face it: Canada is the only G8 country without commercial biodiesel (production). Toronto Hydro has been using the fuel for three years ... but it has taken a long time for people to raise their heads and understand the opportunity around it."

Jayaraman says the American government provides "huge" production tax incentives and offers "gigantic" subsidies for the sale and distribution of biodiesel fuels to the tune of 85 cents per litre, over four times the 18.5 cents Ottawa chips in here.

www.aboutbiodiesel.com

By IAN ROSS

Northern Ontario Business