Manitoba Subsidizes BioDiesel

WINNIPEG - Apr 8/10 - SNS -- The Manitoba government will subsidize up to 20 million liters per year of biodiesel production for the next five years under amendments to the Biofuels Act tabled in the legislature by Energy and Mines Minister Dave Chomiak.

"We will replace the fuel-tax exemption for Manitoba biodiesel with a production grant, payable directly to provincial producers," said Chomiak. "We expect paying a grant to provincial producers, rather than a fuel-tax exemption, will be more effective in making producers competitive and thus encourage the local production of biofuels."

The program would offer a grant of 14 cents per liter to biodiesel producers over a five-year period, beginning immediately. The grant will be capped at 20 million liters per year, which represents roughly the amount of biodiesel required to meet Manitoba's biodiesel sales mandate.

Manitoba currently has one licensed commercial biodiesel producer, Speedway International in Winnipeg, with the capacity to produce 20 million liters annually. Two other plants in rural Manitoba, Bifrost Bio-Blends in Arborg and Eastman Bio Fuels in Beausejour, are also expected to become licensed commercial facilities this month and add another 15 million liters of biodiesel production capacity.

Other amendments to the act focus on measures that would support compliance by fuel suppliers with the province's biofuels mandates including:

- taking into account unique fuel-distribution patterns in northern Manitoba and providing flexibility to deal with emergencies such as shortages of biofuels or petroleum-based fuels; and

- making exemptions for fuel sales in certain areas of the province, such as northern Manitoba, where the distribution and storage of fuel in remote communities can be difficult.