Grainswest Tech 2021

Tech 2021 grainswest.com 41 Shannon Sereda, senior manager, government relations and policy, Alberta Wheat Commission (AWC) and Alberta Barley, said the two groups have given provisional support to the CFS and will work to better understand the market’s potential for growth. She predicted growth will depend on the price signals farmers receive and whether or not the market can compete using premium-grade wheat such as CWSWS as feedstock. For instance, it is yet unknown how Project Wheatland will work with farmers. “It will have to be through secure contracts, I would say, for farmers to risk growing a variety that maybe isn’t marketable at the same cost premium as other varieties,” she said. DRAFT REGULATIONS CAUSE CONCERN In December of 2020, the federal government released its long-awaited draft regulations for the CFS. It contains several changes to the proposed format introduced in 2016 that are worrying for western Canadian farmers. The most significant change is in its scope, explained Marla Orenstein, director of the Natural Resources Centre at Canada West Foundation, a public policy think tank. The CFS was initially to apply to all fuels, including liquid, gaseous and solid fuels. The draft regulations will now only apply to liquid fossil fuels, primarily gasoline, diesel and oil, used mainly in the transportation sector. Orenstein believes the move to exclude non-liquid fuels is positive. “There’s precedent for seeing whether it works or not,” she said, and pointed to jurisdictions such as California and the European Union. “And the answer is it does.” “On the gas and [solid] fuel side … because nobody had done anything like that before, it was going to be less certain what it was going to deliver and how complicated that was going to be in relation to the benefit of reduced greenhouse gas emissions,” she added. “I think there are probably better ways to tackle emissions associated with solid fuels and gaseous fuels.” The subtraction of certain types of fuel will stifle emissions reductions. The government had earlier projected a 30-megatonne (Mt) reduction. Now it anticipates a reduction between 17.5 and 20.6 Mt. Carbon intensity reduction requirements were also amended, and the CFS will now commence in December 2022, six months later than was first expected. Chris Vervaet, executive director of the Canadian Oilseed Processors Association, said the release of the draft regulations was an encouraging step in the right direction. For the most part, he likes what he sees. “But there are also significant components in the regulation that leave a lot to be desired, frankly, in terms of really sending that clear demand signal for biofuels,” he said. “There are elements in it that might prevent good uptake from the canola industry to participate in the program.” Like Orenstein, Vervaet mentioned land-use compliance and biodiversity criteria as possible problems. As described, the criteria within the CFS do not fully recognize Canadian farm practices as sustainable, he said. “Canadian farmers have demonstrated time and time again they are sustainable,” he said. “And most notably, we have aggregate compliance for our sustainable production practices for access into the U.S. biofuel market. We see every reason for Canada to accept Canadian farmers as compliant to these criteria as well on an aggregate basis.” Vervaet said the canola industry pressed hard to have zero and minimum tillage factored into the CFS lifecycle analysis. He is encouraged to see its inclusion, as these practices have a positive effect on farm carbon emissions intensity. WHAT’S THE SCORE? Carbon intensity scores are derived from the amount of greenhouse gas emissions generated by the lifecycle of a given fuel—from extraction to production, distribution and use. These scores, which will include the lifecycle analysis of various feedstocks used for biofuels is a critical component of the CFS. Carbon intensity scores will dictate the value of low-carbon fuels, such as biofuels, under the regulations. The obligated parties that must comply with the regulation, such as fossil fuel suppliers, are also eager to see where the carbon intensity scores line up. They will want to choose the most efficient feedstocks or biofuels to generate the most credits, said Vervaet. “We’re pushing for some transparency on this model,” he said. “At the moment, we don’t have clarity on any of these items. But we do hope to have a better idea on those two components before the final regulations are intended to be released in December of this year.” Read part three of our carbon series in the fall issue of GrainsWest. “I think there are probably better ways to tackle emissions associated with solid fuels and gaseous fuels.” —Marla Orenstein