By Brian Roberts, Adam Kreek And Chris McDowell, Vancouver Sun September 27, 2011
Environmentally friendly products taxed as if they were derived from the fossil fuels they aim to replace
When it comes to climate leadership, British Columbia has earned an enviable reputation. With our carbon tax, ban on coalfired electricity production and commitment to join a regional greenhouse-gas reduction agreement early next year, our province is doing more to address global warming than many jurisdictions in Canada and the United States.
With this leadership comes benefits. B.C.'s pollution-fighting policies have helped stimulate one of the more vibrant new-economy sectors on the continent. According to a recent KPMG report, there are now 202 dedicated clean-tech companies in this province, employing about 8,400 people, and bringing in some $2.5 billion in revenue.
The growing sector includes a number of green co-operatives and startups dedicated to supplying renewable biofuels like B100 (100-per-cent biodiesel), which packs the greatest pollution-fighting punch of any liquid vehicle fuel available. In doing so, these innovators are helping our province meet its carbonreduction goals, and fulfilling the B.C. Energy Plan's objective to "reduce emissions and advance the domestic renewable fuel industry."
At least, they're trying. Unfortunately, due to what appears to be a series of legislative oversights, the same government that calls biofuels a key solution is taxing them as if they were part of the problem.
In B.C., drivers going out of their way to purchase carbon-neutral biodiesel made from recycled waste cooking oils are charged the same carbon tax rate (6.39 cents per litre) at the pump as those tanking up with regular diesel. The carbon tax - an otherwise sound policy that the Economist magazine recently declared "a winner" - has a slight glitch.
There's more. In early 2010, the proincial government removed a longtanding exemption for biofuels from he Motor Fuels Tax. As a result, anyne purchasing 100-per-cent renewble vehicle fuel from the Vancouver iodiesel Co-op now coughs up an dditional 24 cents per litre. Taken ogether, Victoria is now taxing these dedicated biodiesel buyers 30 cents per litre - for doing the right thing. In fact, while petroleum companies benefit from a five-percent tax reduction on regular fuel sales - to account for recent standards that mandate renewable-fuel content in motor fuels - small but dedicated B.C. producers of pure renewable biofuels now find their products taxed the same as if they were almost entirely derived from the polluting fossil fuels they aim to replace.
Surprised? So is the biofuel sector. These flaws - in what would otherwise be supportive legislation - are inadvertently undercutting B.C.'s biofuels industry. It is pricing domestic producers out of their own market and driving B.C.-made renewable fuels south of the border. There, the industry is supported with significant incentives, including a federal government blending credit equal to about 26 cents per litre and a renewable fuel credit of 66 cents per litre paid for by the petroleum industry.
With current credits totalling about 92 cents per litre, it's no wonder the United States biodiesel industry is having a record year. With a level playing field, our own domestic renewable fuels industry could be duplicating that success while achieving significant reductions in greenhouse gas emissions for the province.
Ironically, almost every drop of British Columbia's renewable fuel production is now being sold to the U.S., forcing the province to import the biofuels it needs to meet its own carbon-reduction goals. Clearly, there are still some kinks that need to be worked out in B.C.'s ambitious new system.
Worldwide, the transportation sector is one of the leading sources of greenhouse gas emissions. It is a key source of our growing thirst for declining fossil fuel resources - driving further expansion of the Alberta oilsands and pushing drilling activities into increasingly sensitive and risky environments.
Biofuels can play a critical role in reducing these risks by helping us transition our transportation sector to renewable, low-carbon energy sources. It is not difficult to imagine this province's nascent renewable fuels sector one day forming the backbone of a thriving low-carbon economy. We already have the policy foundations in place to make this happen. Now we just need to align B.C.'s tax policy with the stated intent of the legislation, and ensure we have a level playing field with Americans.
The B.C. biofuel sector is not asking for a handout, just fair treatment. Removing these roadblocks to a homegrown low-carbon economy won't just be a win for the domestic renewable fuels industry, it will be a win for the province and the planet.
Brian Roberts is the president of the Cowichan Biodiesel Co-op; Adam Kreek is a board member of the Island Biodiesel Co-op; and Christine McDowell is a board member of the Vancouver Biodiesel Co-op.
© Copyright (c) The Vancouver Sun
