Rebecca Tan Policy Advisor…

Rebecca Tan Policy Advisor Ministry of the Environment and Climate Change Climate Change and Environmental Policy Division Air Policy Instruments and Programs Design Branch 77 Wellesley Street West, Floor 10 Ferguson Block Toronto Ontario M7A2T5
Subject: Enerkem comments on the amendments to the Ethanol in Gasoline (O. Reg. 535/05) and Greener Diesel (O. Reg. 97/14) Regulations.
Dear Ms. Tan,
Enerkem appreciates the opportunity to comment on the recently proposed amendments to the Ethanol in Gasoline (O. Reg. 535/05) and Greener Diesel (O. Reg. 97/14) Regulations.
Enerkem is a Canadian cleantech company that uses its proprietary clean technology to convert non-recyclable municipal solid waste (MSW) into low carbon transportation fuels and green chemicals such as cellulosic ethanol and methanol. Enerkem’s advanced biorefineries significantly reduce greenhouse gas (GHG) emissions through displacement of gasoline use in transportation and through avoidance of methane emissions from landfill. In 2016, Enerkem's facility in Edmonton became the first ISCC (International Sustainability and Carbon Certification) certified plant in the world to convert municipal solid waste into biomethanol. In addition, Enerkem’s ethanol obtained the lowest carbon intensity ever from the British Columbia government for the province’s Low Carbon Fuel Standard.
Enerkem congratulates the Ministry of Environment and Climate Change on the vision and leadership demonstrated by the recently proposed amendments. We believe that these amendments will significantly reduce GHG emissions in Ontario and help offer consumers more low carbon choices at the pump. Our comments and recommendations that follow seek to support the successful implementation of these amendments and build upon them to maximize GHG emissions reductions in the medium and long-term in Ontario.
A) The proposed increase in ethanol mandate to 10% is timely and realistic
Enerkem strongly supports the proposed increase in the ethanol mandate to 10% ethanol in regular grade gasoline starting in 2020 and believes that this level is realistic and achievable in the proposed time frame.
Renewable content in gasoline-class fuels in Ontario was estimated at ~7.8% (92% fossil) in 2014 (Clean Energy Canada, 2016) and is believed to have remained at that level until now. It is therefore realistic to increase the minimum volumetric requirement to 10% as new production capacity is expected to come online and higher blends such as E15 (mix of 15% ethanol with 85% gasoline) can be offered to consumers. Most vehicles purchased since 2012 are compatible with E15 and more than 800 service stations in the United States offer this low carbon fuel blend. E15 is expected to be approved for use in Canada in 2018.
B) Provide an additional incentive for cellulosic ethanol and other fuels produced through innovative technologies and with non-conventional feedstocks
The proposed amendments would extend the existing 2.5 X multiplier for cellulosic ethanol to other innovative low carbon fuels. It is important to have a measure that differentiates and provides an additional inventive to fuels produced through innovative technologies and with non-conventional feedstocks in recognition of the higher capital costs associated with these levels of technology innovation. Such incentives are important for attracting capital for the expansion of production capacity of these innovative fuels.
C) Consider a gradually increasing sub-mandate for cellulosic biofuels (and other advanced biofuels produced through innovative technologies and with non-conventional feedstocks)
In Ontario, where grain ethanol is abundantly available, obligated parties in the province are not offering a significant price premium for cellulosic ethanol in spite of the 2.5X multiplier. As such, prices offered for cellulosic biofuels in Ontario cannot compete with other jurisdictions that enable the producer to monetize the additional benefits of the fuel, such as the United States through cellulosic RINs and in Alberta with a 14 cent production credit. To attract cellulosic biofuels to Ontario, we recommend that the Ministry consider, as part of the increased mandate, putting in place a gradually increasing sub-mandate (or “carve-out”) for cellulosic ethanol/other multiple-counted fuels. This carve-out could start at 0.5% in 2020 and increase to 2% in 2030. Incorporating a specific requirement for cellulosic biofuels has proven highly effective in the United States, where demand is very strong for cellulosic biofuels. Europe is also taking advantage of this policy tool for the renewal of its Renewable Energy Directive (RED). A blending requirement for advanced biofuels that increases over time will replace the non-binding advanced biofuel target in the current RED.
D) Use sound science and best practices for calculation of carbon intensity (CI) of fuels
In order to ensure a robust lifecycle analysis, Enerkem recommends that Ontario favour the use of site-specific emission factors for the project and the baseline scenario. The use of site-specific emission factors ensures that the CI of the fuel reflects the real-life impact that its production and use has on GHG emissions rather than a theoretical value, and is considered international best practice. The ISO 14064-2 International Standard for quantification, monitoring and reporting of greenhouse gas emission reductions recommends that bias be reduced as far as is practical and that the GHG emissions factors used should be current at the time of quantification and appropriate for the GHG source or sink concerned. The GHG Protocol for Project Accounting from the World Resources Institute also mentions that the emission factors used for the project and the baseline scenario must be project specific.
E) Recommendations for a possible Blenders Support Program (BSP) to encourage the long-term use of higher biofuel blends
The use of higher biofuel blends is an effective solution for decreasing GHG emissions from transport, but the need for upgrades to infrastructure for blending and distributing higher biofuel blends can slow the achievement of these benefits. A Blenders Support Program to encourage fuel refiners to make infrastructure upgrades for blending higher biofuel blends is a step in the right direction, but should also focus on providing support for investments in retail infrastructure to offer higher blends at the pump. In the United States, many state grant programs as well as grants from the United States Department of Agriculture have helped fuel retailers put in the pumps to dispense E15, and the U.S. is now seeing significant increases in sales of this fuel blend. As mentioned previously, more than 800 service stations in the United States offer E15 and over 2900 service stations offer E85. With a relatively modest investment, Ontario can encourage the use of these lower-carbon blends at service stations across the province. The Renewable Fuels Association reported in 2013 that service stations that chose to offer E15 in the United States had made an investment of $10 000 USD on average (Lane, 2015).
About Enerkem
Enerkem is a Canadian cleantech company that uses its proprietary clean technology to convert non-recyclable municipal solid waste (MSW) and other residues into low carbon transportation fuels and green chemicals such as cellulosic ethanol and methanol. Enerkem’s advanced biorefineries significantly reduce GHG emissions through displacement of gasoline use in transportation and through avoidance of methane emissions from landfill.
Enerkem currently operates the world’s first commercial scale MSW-to-biofuels and chemicals plant in Edmonton as well as an innovation centre in Quebec. Enerkem will soon begin construction of its next commercial plant in Varennes, Quebec, and is launching several initiatives to export its clean technology around the world in addition to its domestic growth initiatives.
Each Enerkem waste-to-biofuels and chemicals facility creates high quality green jobs and brings value to communities, while helping solve some of today’s most pressing environmental issues. It is estimated that each Enerkem facility generates 610 direct and indirect jobs and increases spending across Canada by $200 million during the construction phase. Once in operation, the plants are estimated to generate 152 direct and indirect jobs and to increase net economic spending in the local area by $65 million annually.

References
Clean Energy Canada, 2016. Accessed December 12, 2017 from: http://cleanenergycanada.org/wp-content/uploads/2016/03/FINAL-Report-Bi…
Lane, J. 2015. USDA invests $100M in renewable fuel pumps. Biofuels Digest, 2015. Accessed December 12, 2017 from: http://www.biofuelsdigest.com/bdigest/2015/09/13/usda-invests-100m-in-r…

[Original Comment ID: 212237]