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Biodiesel plant a go: sufficient oilseed supply still a concern.

The head of the largest agricultural co-operative in northeastern Ontario says there is not enough production of canola or soya oil to support a biodiesel plant in Sudbury.

Raymond Savage, General Manager of Co-operative Regional de Nipissing-Sudbury, says about 10,000 to 15,000 acres of the combined canola and soya beans are grown in the area, not enough for the 40,000 acres required by Topia Energy.

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In late April, Liberal Nickel Belt MP Ray Bonin announced $1.8 million in federal funding for a $4 million biodiesel plant to be built by Topia Energy in Sudbury. To be completed in the fall, it will provide more than 200 jobs in agriculture and oil seed processing.

Savage says the proposed biodiesel plant will only process the oil, not crush the seeds, which will likely have to be shipped to a Windsor crushing plant. One other plant in Hamilton has the capacity to crush seeds, but they will not be crushing canola this year.

In April, the co-operative shelved the possibility of starting an oil-crushing seed plant because it was not cost effective for the region.

Bonin says he realizes there is not enough crop production in the area right now. He says once he makes the announcement, the FedNor funding will attract more farmers to oil-producing crops.

"There are a million acres of land not being farmed," Bonin says. "I will be working closely with the co-operative board to find ways to get them sufficient government money, so they can find the plant in my riding viable."

Bonin says this is an opportunity not to be lost for Northern Ontario.

BioDiesel (as trademarked by Topia) is a renewable fuel made from recycled vegetable fats and oils. BioDiesel can reduce green house gas emissions by up to 85 per cent compared to gasoline, and can be used in any diesel engine without modifications. It reduces smog and improves local air quality. There are currently over 250 BioDiesel stations in the US and four in Canada. All of the Canadian locations are operated by Topia Energy.

To support Topia Energy's proposal, the co-operative did a feasibility study for a facility that would have crushed 200 metric tonnes per day, generating enough oil to make three million litres of biodiesel annually.

However, limited local crop production would not have met that need, so they downsized the proposed facility to produce 40 metric tonnes per day.

"We looked at what was grown in the area, and there was no way we could have sourced local crops to keep a plant that size going," Savage says.

But according to Bonin, the plan now is to build a plant that can produce 20 million litres of biodiesel annually, almost seven times what the co-operative's feasibility study said wouldn't work in the first place.

"Regardless of whether we went with the crusher plant locally or not, with the size of the plant they are presumably building in Sudbury, they would have had to source outside of the area anyway," says Savage, "Ultimately, we are a very small drop in the bucket."

Canola is better for biodiesel because it produces twice as much oil as the soya bean. Soya bean meal has more of a market because it is rich in protein and can be fed to animals.

In order to meet the crop demand for the proposed plant, most of the canola and soya will either come from the western provinces or southern Ontario, as it is not cost-effective to ship crops to crushing facilities in southern Ontario and back north for processing.

Topia Energy Distribution Inc. launched Ottawa's first retail BioDiesel pump on April 22, Earth Day.

Topia's first retail pump in Ottawa will sell a blend of B20-20 per cent BioDiesel and 80 per cent petroleum diesel blend.

www.strategis.ic.gc.ca/fednor

www.aboutbiodiesel.com

By ADELLE LARMOUR

For Northern Ontario Business
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Author:Larmour, Adelle
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Date:May 1, 2005
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