The increase in demand for biofuels coming from the federal government’s Clean Fuel Standard should be a cause for celebration for farmers, but there’s concerning fine print in the regulations.
It can be argued that ethanol policy over the past 20 years has been the most successful farm support program in history. It created a market demand for corn and to a lesser extent oilseeds, which has helped put a floor in corn pricing in Ontario and across North America. Ethanol uses at least 30 per cent of the corn produced in Ontario.
Most of it ends up in vehicle fuel.
The Clean Fuel Standard extends the need for cleaner-burning fuel to areas like home and business heat.
That will mean more demand for ethanol and other biofuels.
However, Grain Farmers of Ontario spotted concerning details that include a strange requirement that biofuels not be produced on land that has been cleared in the past eight years.
There’s nothing wrong with encouraging buffers and the maintenance of forest and wetlands. Programs like Alternative Land Use Services (ALUS) are a good model to use to encourage, and reimburse, people who maintain or enhance biodiversity on their farms. We need more of it with species in serious decline.
However, a retroactive clause in a fuel bill seems punitive and counterproductive. Why just eight years? Why not for land that was cleared 20 or 50 or 100 years ago?
I expect it has to do with the math that’s being done around sustainability programs by governments and especially large companies. They don’t want to create impacts when a new program is introduced to reduce them. In other words: Reducing carbon sinks and releasing carbon by clearing land will negate gains made by using cleaner-burning fuel.
That doesn’t mean a policy that intends to change the makeup of a commodity market (like changing fuel standards) should be hampered by add-ons that could significantly impinge on the original goal.
The land-clearing exemption is unworkable at this point. Say a farmer cleared six per cent of their land (which could be cleaning up around the edges of forests or fence rows). How do you segregate that six per cent of crop? No one’s going to build a separate bin. You could run to the elevator with just that six per cent of corn, but that also makes little sense. The elevators aren’t going to want to segregate biofuel and non-biofuel corn.
Or maybe you can just not ship six per cent of your corn for biofuel. That would be a bit more workable as there’s lots of market for corn other than biofuel, but that still makes little sense logistically.
Who’s going to police whether the corn you sell for ethanol comes from land cleared in the past eight years?
Of our priorities, this shouldn’t be very high on the list for public expenditure or paperwork creation. I expect that farmers will just have to sign a form that says they are meeting the letter of the criteria, but the best outcome would be for this proviso to go away.
The potential benefits versus costs of the Clean Fuel Standard mean different messages coming from different farm groups across the country. GFO expressed concern about the unworkable added bureaucracy in the bill. Canola farmers in the West lauded the program and look forward to new markets.
The Clean Fuel Standard will stretch into areas like natural gas, and that sector of the energy industry claims that it will dramatically increase costs. Farmers make use of a lot of natural gas for barn heating and grain drying, so this could have an effect on farmer incomes.
Two provisos on the concerns about natural gas: We heard the same thing from refineries about the adoption of ethanol, but over the years the process has become streamlined and efficient.
There also will be opportunity in natural gas for some farmers, especially those with livestock. Some Ontario farms are already working to move methane into the natural gas system, with some decent contracts available to do so.
This could also drive more community management of manure to collect methane, as has happened in Europe.