Fuelling the Future
Canada’s renewable fuels industry is growing and creating jobs in regional communities that desperately need employment opportunities. Biofuels, the most sustainable sources of fuel available, burn cleaner than either petroleum or diesel.
Increasing biofuel use reduces greenhouse gases while supporting local economies. Atlantic Biodiesel recently opened its state of the art biodiesel plant in Welland, Ontario. We spoke with its Chief Operating Officer, Michael Paszti, to learn more.
The Atlantic Biodiesel site was previously Great Lakes Biodiesel which fell into receivership and closed in 2014. Luxembourg-based company Heridge SaRL had invested in the $50 million plant, and established Atlantic Biodiesel, becoming the official owner in February 2015.
“Now it’s 2015, and the new owner has to make a go of this plant that he never intended to have to manage when the original investment was made. I came in as of February 2015 from another biodiesel producer in Canada and had to start from scratch.”
From 2013 to 2015 the plant was in operation for only a couple of weeks, so to get things up and running was a huge undertaking. Maintenance had been let go and a few million dollars was needed to revive the operation.
From February until the present the plant has been undergoing non-stop overhauling, maintenance and upgrades. However, the team has also needed to rebuild relationships outside of the company with local suppliers, fabricators, service contractors as well as the multinationals to which the company would sell.
“It’s as if we were a greenfield business back in February. We had no feedstock, no chemical supplies, no customers and no contractors to actually work on the plant because nobody wanted to talk to us. They thought we were the old crew, the old company.”
When the new owners took over, the receiver handling the company suggested that all the workers be laid off and rehired in a few months since nothing was being processed at the time. Instead, seeing the quality of the employees, Atlantic hired them to stay throughout the winter.
“Even though we were not producing anything, we hired them back because we knew they would be a critical part of getting the operation up and running again. So, you don’t lay them off in November and over the winter! What are they going to do for five months? How are they going to feed their families and keep their homes? We kept them fully paid and employed throughout the holidays. That really tells you what we stand for as a company.”
Atlantic Biodiesel’s Dain City facility is the second-largest plant of its kind in Canada. Biodiesel is the most sustainable commercially available fuel in the world and it is an important part of Canada’s greenhouse gas reduction targets. Atlantic Biodiesel’s production will support agriculture by using feedstock that is grown in Canada and parts of the US in a highly efficient process.
“We use very little water and very little energy. What you get out of it is a low cloud point fuel. Cloud point is the temperature at which crystallization starts occurring, and the lower that number is, the better the fuel is in cold weather.” A low cloud point fuel is better suited to the Canadian climate.
Given that biodiesel has a greenhouse gas reduction of roughly 80% or more compared to conventional petroleum fuels, why is it not more widely adopted as an alternative?
“There are many reasons given by some for why you can’t use renewable fuels, and, of course, none of them have been proven. In fact, they have been disproven. However, it takes a long time for that message to get through to politicians. The biofuels industry has an uphill battle to break into the marketplace because of our relatively small scale and influence. We are tiny specks compared to the petroleum infrastructure that exists.”
While Canada does have a renewable fuels mandate, the requirements are low. Michael’s feeling is that it might, unfortunately, take increasing environmental damage and catastrophic weather events to wake people up to the need for alternative fuel sources.
“For the renewable industry, you need government support and mandates to ensure the uptake of renewable fuels. On their own, they can’t compete against conventional fuels because they get to pollute for free. When you run conventional fuels, carbon dioxide and other toxic emissions are thrown in the air, and you don’t have to pay for that pollution. If you did, however, renewable fuels would be that much more affordable in relation, and they would be able to compete.”
In the absence of any type of carbon trading mechanisms, government mandates are needed. Atlantic Biodiesel needs the government to force producers of petroleum products and fuel distributors to incorporate more renewable content. This is occurring to some extent, but higher mandates are needed. “The average blend rate of biodiesel in Canada and renewable content in our fuels is under 2% or lower, which is miserable.”
Michael says that part of the issue lies in the fact that the government needs to balance the needs of many parties. We are a resource-driven economy, and there are larger interests at play than the biofuels industry. In terms of influence, the petroleum producers control the entire supply chain from exploration to distribution. It is difficult for the little guy in a young industry to make inroads.
Michael genuinely believes that Atlantic Biodiesel is poised to be competitive. In the Niagara region, it will be able to take advantage of the US market as well as the Canadian. It has the scale, the logistics and the right technology. It is in a part of the country where there is little bio-fuel competition and there are large consumption bases in Ontario and the northern bordering states.
“In the coming months and years, I hope that we will have some serious renewable fuel content and, therefore, demand in Ontario. Our goal is to be supplying Ontario. That’s where we live, and our largest market is just around the lake.”
There are many challenges ahead for Atlantic Biodiesel, and one of the biggest is that it does not have the subsidies in Canada that it does in the US. This necessitates selling product to the US to take advantage of subsidies that exist there. ”It’s a real pity that we are in this situation.”
Low oil prices have not helped either. Raw materials are expensive and the price of the finished product cannot compete when faced with falling oil prices. Michael believes that, for the government, this is the perfect time to be making people use more renewable fuels before crude oil costs rise. “You’re not going to be getting better value for your money than you will now!”
The new life of the plant is, in part, due to the support of the local community. Atlantic Biodiesel intends to use locally grown raw materials and hire students from Niagara College and Brock University.
“We have great operators, suppliers, fabricators, service providers, etc., but to procure feed locally makes ecological sense because transportation is a huge part of making biofuels – or any fuel – work. Your costs and profits will evaporate if you have to ship it far. It eats into your profits and greenhouse gas benefits.”
Its cutting-edge Dain City plant was designed by a company that has vast experience with this type of plant and has produced dozens of plants and other varieties of oil processing facilities around the world. Atlantic Biodiesel plans to expand this plant with related products in the future.
“It’s a good news story all around. We are good neighbours; environmentally friendly in terms of emissions and energy use; the whole community and local politicians support us; we have letters of support on our wall from provincial and federal governments, the mayor, regional chair, and academia. The community is enthralled and thrilled with us being back here as well as the employees.”