2014 CanBio Report

2014
CanBio
Report
on the
Status of
Bioenergy
in Canada
December 2014
by Kendal Bradburn
Renewed Energies
kbradburn@renewedenergies.com
on behalf of CanBio
A
2014 CanBio Report on the
Status of Bioenergy in Canada
2014 CanBio Report on

the Status ofBioenergy in Canada
December 2014
by Kendal Bradburn
Renewed Energies
kbradburn@renewedenergies.com
on behalf of CanBio
This report was produced with support from Natural Resources Canada.
Its contents do not necessarily reflect the opinions of the Government of Canada.
The Forest Products Association of Canada provided support in consideration
oftheCanadian Bioenergy Association.
CONTENTS
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.0 Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Federal Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.1 Renewable Heat and Power . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.2 Renewable Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Provincial Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
British Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Ontario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Manitoba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Alberta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
2.3 International biofuel developments . . . . . . . . . . . . . . . . . . . . . . 16
3.0 Users of Biomass/Bioenergy Producers . . . . . . . . . . . 17

3.1
Cogeneration Industrial Heat and Power Producers (PPs & IPPs) . . 18

3.1.1 Cogeneration Pulp & Paper . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.2 Cogeneration Independent Heat & Power Producers . . . . . . . .21
4.0 Biogas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1 Feedstocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.0 Community Heating in Canada . . . . . . . . . . . . . . . . . . . . 31

5.1 Provincial Leaders Policies driving growth in biomass heat . . . . 35
5.1.1 British Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1.2 Northwest Territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1.3 Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.1.4 Prince Edward Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.0 Wood Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

6.1
Canada and Beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.2 Pellet Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

6.3 Pellet Feedstocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.4 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
i
contents (continued)
7.0 Torrefied Wood (Pellets) . . . . . . . . . . . . . . . . . . . . . . . . 57
8.0 Greenhouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.0 Liquid Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.1 Ethanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.2 Biodiesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.3 Pyrolysis Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.2 Current Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.3 Industrial Production . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
72
73
73
10.0 Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.1 Wood Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.2 Ethanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.3 Biodiesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.o Supply Chains (Pellets) . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

12.0 Feedstocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.1 P&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.2 IPPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.3 Biogas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.4 Community Heating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.5 Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.6 Ethanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
12.7 Biodiesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
13.0 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
List of Figures
Figure 3.1 Energy Use from Biomass p19
Figure 6.1 Pellet Export Destination 2013 p50
Figure 6.2 Sawmill Lumber Production, 20032012 p52
Figure 6.3 Source of Feedstock for BC Wood Pellets, 2013 p53
Figure 9.1 1st Generation Ethanol Capacity p66
Figure 10.1 Canada Exports vs. Capacity p76
ii
List of Tables
Table 6.3 Pellet Capacity
by Province (tonnes) p45
Table 2.1 Federal Policies

to Support Renewable Heat
and Power p9
Table 6.4 Average Size of

Plant 2013 p46
Table 2.2 Federal Policies

to Support Renewable Fuels p11
Table 6.5 Pellet Production

Table 3.1 Number of Pulp and

Paper Mills with Cogen p18
Table 6.6 2013 Capacity

Utilization by Province (tonnes) p48
Table 3.2 New Renewable

Energy Capacity Due
to PPGTP p20
Table 6.7 2013 Pellet Exports p49

Table 6.8 Pellet Exports
by Province p51
Table 3.3 Power Production

by Feedstock p21
Table 6.9 Pellet Feedstocks

Table 3.4 2013 Bioenergy

Capacity by IPPs p21
Table 6.10 Direct Jobs in

Pellet Plants by Province 2013 p55
Table 3.5 Capacity of Future

IPP Plants p22
Table 9.1 Provincial Renewable

Fuel Standards p64
Table 3.6 2013 Power Generation

Capacity by Fuel (MWe) p22
Table 3.7 Employment by IPPs p23
Table 9.2 1st Generation Ethanol

Capacity and Production in 2013 p66
Table 4.1 Biogas Systems in

Operation in Canada 2013 p26
Table 9.3 2nd Generation

Ethanol Capacity p68
Table 4.2 Biogas Systems in

Development in Canada 2013 p28
Table 9.4 Consumption of

Diesel in Canada p69
Table 5.1 Community Heat

Installations in Operation
by Province p32
Table 9.5 BiodieselCapacity 201113 p70

Table 9.6 Canada Biodiesel Capacity
& Production by Region 2013 p71
Table 5.2 Number of Buildings

Connected to Bio-heat Systems p33
Table 9.7 Estimated

Biodiesel Consumption p72
Table 5.3 Community Heating

PlantCapacities (kW) p34
Table 10.1 Canadian Pellet Exports p77
Table 5.4 Feedstock of

Heating Plants p35
Table 10.2 Ethanol Imports p78
Table 5.5 Provincial Programs

Supporting Bioheat Development
in Canada p36
Table 12.1 Pulp and Paper

Cogen Feedstock p82
Table 10.3 Biodiesel Exports p78
Table 12.2 IPP Feedstock p83
Table 6.1 European Demand

for Wood Pellets p44
Table 12.3 Biogas Feedstocks p84

Table 12.4 Biodiesel Feedstocks p85
Table 6.2 Canada Wood

Pellet Capacity (tonnes) p45
iii
List of Abbreviations:
NRCan Natural Resources Canada
EC Environment Canada
CFS
Canadian Forest Sector
NRC National Research Council
Canada
AAFC Agriculture & AgriFood Canada
GNWT Government of the Northwest
Territories
IEA International Energy Agency
EU European Union
SDTC Sustainable Development
Technology Canada
OPG Ontario Power Generation
CanBio Previously known as
Canadian Bioenergy Association
CRFA Canadian Renewable Fuels
Association
BA
Biogas Association
WW2RH Wood Waste 2 Rural Heat
BCBN
BC Bioenergy Network
AEA Arctic Energy Alliance
AGE Arctic Green Energy
CRE Conseil rgionale de
lenvironnmente
RNG
CO2
Renewable Natural Gas

Carbon dioxide
SO2
Sulfur dioxide
NOx Nitrogen oxide
BC
British Columbia
AB Alberta
SK Saskatchewan
MB Manitoba
ON Ontario
QC Quebec
NS Nova Scotia
NB New Brunswick
PEI Prince Edward Island
NL Newfoundland & Labrador
NWT Northwest Territories
US United States
P&P Pulp and Paper
IPP Independent Power Producers
CHP
Combined heat & power
MSW Municipal Solid Waste
MPB Mountain Pine Beetle
GHG Greenhouse Gas emissions
GH Greenhouses
AD Anaerobic digestion
N/A Not available
PPGTP Pulp & Paper Green

Transformation Program
PERD Program of Energy Research &
Development
BOPI Biofuels Opportunities for
Producers Initiative
AFI Aboriginal Forestry Initiative
ecoABC ecoAgricultural Biofuels Capital
Initiative
FIP Farm Innovation Program
CAAP Canadian Agricultural
Adaptation Program
FIT Feed-in-tariffs
MicroFIT Micro Feed-in-tariff
RFS
Renewable Fuel Standards
RED
Renewable Energy Directive
GPHH Growing Power Hairy Hill
ADM Archer Daniels Midland
GLB Great Lakes Biodiesel
R&D
Research and development
E5
5% Ethanol in gasoline
B2
2% Biodiesel in diesel fuel
MWe
megawatt electric
MWth
megawatt thermal
Mt Million tonnes
Bl
Billion litres
Ml Million litres
MMly Million liters per year
tpa
tonnes per annum
tpd
tonnes per day
Mm3
million meters cubed
m3
meters cubed
3
t/m
tons per meters cubed
kWh
kilowatt hour
BDt
Bone Dry tonnes
GWh Gigawatt hours
GJ/t Gigajoule/tonne
km kilometers
iv

Executive
Summary
Canada is in the privileged position of having substantial biomass
from wood, forest debris, crop residues, municipal waste, and waste
materials from renewable resources. These carbon-based materials
are fueling a growing bioenergy industry in Canada that is creating
new jobs at every skill level and replacing many jobs lost in small
communities formerly dependent on traditional forest products.
1
In 2013, CanBio, with the financial support of Natural Resources Canada

(NRCan), commissioned a nationwide survey of Canadian bioenergy facilities
to understand the growth and structure of the bioenergy industry, and its
socio-economic benefits. The survey, carried out by Kendal Bradburn of
Renewed Energies, was targeted chiefly at production facilities including
ethanol, biodiesel, pellets, bio-heat, bio-power, biogas, and cogeneration.
This survey builds on the results of past surveys in 201112.

Policy: Both federal and provincial governments have implemented various policies
and initiatives to promote bioenergy. British Columbia (BC), Quebec, Prince Edward
Island (PEI) and the Northwest Territories (NWT) have implemented initiatives aimed
at increasing biomass heat in communities. Ontario policy initiatives positioned it as
a leader in biogas to power, while federal programs have played a large role in the
development of bio-fuels.
Pellets: Installed capacity grew by 1.3 million tonnes (Mt) or 61% in 201012, but
uncertain markets led to the closure of three plants in 2013. The pellet industry
leader is BC, with 61% of Canadian pellet capacity and the six largest plants.
Competitive plants and efficient supply chains have resulted in an 85% rate of
capacity utilization. Quebec, the second largest producer with small local markets
and plants, has been operating at 63% capacity.
Community Heat: Until 2000, only five biomass heat projects existed in Canada.
By 2013 the number of systems had grown to 109, led by BC and the NWT. Both
regions leveraged effective government initiatives and local champions. The idea
is catching on elsewhere in Canada as well. For example, Ontario had only three
systems operating in 2012, but that grew to 11 by 2013. Nationwide 33 bio-heat
systems are under construction.
Heat and Power from Cogeneration: Thirty nine biomass cogeneration plants
at pulp and paper (P&P) mills operated in Canada in 2013, generating 1,579 MW
electric (MWe). In 2009, the Government of Canada created the $1B Pulp and Paper
Green Transformation Program (PPGTP) that resulted in mills producing an additional
195 MWe of power. There are 23 operating Independent Power Producers (IPPs) with
another two plants at the commissioning stage and seven under construction.
Bio-ethanol: Capacity in 1st generation ethanol made from corn and grain
increased significantly from 411 million litres (Ml) in 2005 to 1,735 Ml in 2008. Growth
slowed between 200911 after the end of government support programs and debate
about the environmental benefits of 1st generation ethanol. By 2013, capacity reached
1,826Ml from 14 plants. Second generation ethanol from lingo-cellulosic feedstocks
is now transitioning from the research and development (R&D) stage to commercial
development. Four pilots and four commercial demonstration plants are now
operating or coming on stream. In 201416, new 2nd generation ethanol plants
willstartup in Edmonton, Alberta and Varennes, Quebec.
2
Biodiesel: Capacity grew from 2009 through 2012 to 235 Ml. The industry lost three
plants because of a fire and the rising cost of feedstocks. However biodiesel is again
experiencing a resurgence with the start-up of Canadas largest plant in 2013 and
three plants either commissioned or under construction. Capacity is expected to
grow to 760 Ml in 2014.
Biogas: By 2013, Ontario had become the leader in Canada for operational
anaerobic digestion installations on farms with 37 of Canadas 77 operating biogas
facilities. Quebec is second with 14 plants, but with several large facilities, has twice
as much capacity as Ontario, at 63 MW.
Greenhouses: There are 52 known greenhouse growers with biomass energy

systems, 37 using biomass for energy, and six in the planning stages. While many
greenhouses in BC use natural gas, in 2013 at least 20 used biomass for heat. In
Ontario, at least 14 growers are using biomass, with five anticipated to come online
in 2014. Greenhouse growers using biomass also exist in Alberta, Quebec, Manitoba,
New Brunswick and Nova Scotia.
Torrefied Wood: There has been considerable interest in torrefaction, the

treatment of biomass with high heat, and in the potential for torrefied pellets as a
superior version of wood pellets. The technology has not yet established itself in
the market. While no significant production exists, two commercial demonstration
plants are being built.
Pyrolysis Oil: Canada was an early innovator in the development of pyrolysis

oil.One company is now expanding to commercial scale and it has a joint venture
to develop pyrolysis oil asan intermediate to drop-in fuels.
While the industry is growing and our understanding of the most appropriate applications
for Canadian biomass residual or waste streams increasing, continued support at research,
industry, and government levels is necessary to encourage further innovation, supportive
policy environments, and growth of the sector.
3
4
1.0
Introduction
This annual report has its origins in a collaboration between CanBio
and Climate Change Solutions, an Ottawa consulting firm, which
provided Canadian bioenergy development input for the International
Energy Agency Bioenergy Task on Bio-trade (2006, 2008, and 2009).
5
Starting in 2010, CanBio undertook national surveys of the industry

to better understand the growth and structure of Canadas bioenergy
industry and determine its socio-economic benefits. With the support of
NRCan, this survey is the most comprehensive thus far, covering ethanol,
biodiesel, pellets, bio-heat, bio-power, biogas, and cogeneration sectors.
Tomaintain confidentiality, all sensitive information has been aggregated
atthe regional level.
Biomass is a vast sustainable resource comprised of a variety of organic
feedstocks, including forest mill and harvest residues, agricultural residues, and
municipal solid waste, that are increasingly utilized to fuel energy production.
The opportunities for transformation of biomass to energy and bio-products
are numerous and have great potential to contribute to energy needs in the
forest, agricultural and transportation sectors as well as in residential heating.
Collaborations between government and industry are working to develop
biofuels(2nd generation and pyrolysis), biogas (gasification & anaerobic
digestion), biomass resources (biomass densification, biomass to gas, and
catalytic conversion), and combined heat and power.1
Bioenergy has been part of the Canadian energy scene for more than 25years,
primarily in the pulp and paper sector. Canada was built on the forest industry,
which is now a $58 Billion industry that accounts for 11% of Canadas manufacturing
GDP. About 200 communities depend on forest-related activities and about
235,000 people are employed in the sector. Many Canadian pulp and paper plants
shut down over the last 20 years after a steep downturn in the industry. The
industry needed to look for new opportunities for both cost reduction and growth.
Early bioenergy development was chiefly about renewable heat and power produced
in cogeneration facilities built by pulp companies or independent power producers.
Beginning in 2000, the wood pellet industry began to grow significantly to supply
regulation driven offshore markets, primarily in Europe. A number of ethanol
and biodiesel plants were built to help achieve domestic targets for renewable
transportation fuels.
NRCan. (2013) Bioenergy Systems. Retrieved from:

https://www.nrcan.gc.ca/energy/renewable-electricity/bioenergy-systems/7311
6
2.0
Policy
7
2.1 Federal Initiatives

Federal and provincial governments are helping the bioenergy industry based on
sustainably managed renewable resources with initiatives and programs targeting
R&D and innovation, greenhouse gas (GHG) reductions, energy efficiency, and tax
incentives.Programs support the development of biotechnologies at the R&D stage,
and also help move demonstration projects through to commercialization. Federal
departments have numerous initiatives and programs aimed at supporting the
development of biomassinto bio-heat, power and bio-fuels from agricultural waste
products, municipal solid waste, and forestry sectors, as well as other value-added
bio-products such as chemicals. The following sections highlight some of the programs
that have made key contributions to the development of bioenergy in Canada.
2.1.1
Renewable Heat and Power
While government policies and incentives were initially focused on biofuels, there has
been increased focus on policy development supporting bio-heat and power. Through
the NRCan Program of Energy Research and Development (PERD), research work is
being done on the development of tools and knowledge for an in-depth understanding
of the availability of Canadas renewable resources, including biomass from forestry,
agriculture and municipal sources, as well as for developing improvements in biomass
conversion technologies. NRCan has been working with external proponents on
responsibly developing renewable energy demonstration projects involving bio-refinery
processes to convert wood fibre into pulp and paper products and biochemical and
energy products such as heat, power and transportation fuels. Through the development
of strategic frameworks and partnerships, NRCan, among other departments, is
supporting sector transformation through innovation and market diversification.
8
Table 2.1
Federal Policies to Support Renewable Heat and Power from Forest, Agriculture and
Municipal Sectors
Organization(s)
Initiative
Description
Implemented
Natural
Resources
Canada
(NRCan)/
Canadian
Forest Sector
(CFS)
Pulp &
Paper Green
Transformation
Program
(PPGTP)
$1 billion in funding support to improve

the environmental performance of
CDN pulp & paper mills while helping
to improve the economic sustainability
ofpaper mills
20092013
Investments in
Forest Industry
Transformation
(IFIT)
$100 million aimed at first-in-kind

technologies in the area of bioenergy
as well as biomaterials and biochemical.
Renewed with another $90.4 million
in2014
2010
ongoing
Aboriginal
Forestry
Initiative (AFI)
Focused on fostering Aboriginal

participation in transformation of
Canadas forest sector. Bioenergy
is apriority area and $2 million has
beenprovided for 5 projects in remote
& northern Aboriginal communities
2011
Program
of Energy
Research &
Development
(PERD)
Supports R&D that develops

sustainable biomass supply chains,
improves feedstock logistics,
&advances biomass conversion
20132015
PERD
Supports R&D that optimizes the

biomass feedstock supply including
sustainability considerations, advances
biomass processing technologies,
&develops advanced liquid biofuels
20152019
ecoEnergy
Innovation
Initiative
Support a suite of demo projects

focused on clean energy & efficiency:
modular combined heat and power
(CHP) systems using local woody
biomass & waste, energy via anaerobic
digestion, & biomass gasification
2011
Clean
EnergyFund
Smaller-Scale
Demonstration
Funds smaller-scale demo projects

including high efficiency high-solid
anaerobic digestion system from
organics; 5-bioenergy systems
(biogas, bio-oil, waste heat, syngas,
&biocarbon); biomass gasification
withintegrated internal combustion
system, CHP suited for multiple
industrial & community applications
2009
NRCan/
Officeof
Energy
Research &
Development
9
Organization(s)
Initiative
Description
Implemented
Aboriginal
Affairs &
Northern
Development
(AANDC)
ecoEnergy
for Aboriginal
& Northern
Communities
Program
To reduce GHG emissions from

electricity and heat generation in
Aboriginal & northern communities
by supporting the development &
implementation of renewable energy
projects. (bioenergy utilizing direct
combustion of woody biomass)
2011
First Nation
Infrastructure
Fund
Provided $234 million between

20072013 in support of on-reserve
public infrastructure, including
energysystems
20072013
Bioenergy
Systems
for Viable
Stationary
Applications
Program
The NRC bioenergy program will

channel a critical mass of expertise into
projects to optimize biofuel production
and upgrading, resolve biofuel-power
plant compatibility issues, & lower
the capital and operating costs for
bioenergy systems and components
2013
National
Research
Council
Canada
(NRC)
2.1.2 Renewable Fuels

In 2006, Environment Canada (EC) issued a Notice of Intent for the impending
biofuel regulation and renewable fuel standard (RFS). The Federal Renewable Fuel
Regulations, finalized and established in September 2010, specified that an annual
average renewable content of 5% bio-ethanol was required in the gasoline pool as
of December15th 2010. A 2% requirement for renewable content in diesel fuel and
heatingoil began on July 1st 2011, with a compliance period ending December 31st 2012.
EC is responsible for overseeing the regulations related to the RFS and also plays an
important role conducting science and research related to air quality, vehicle emissions
and climate change.
In addition to the RFS, the federal government furthered its commitment to developing
renewable fuels and other valuable co-products through a variety of programs and
grants working with industry in research, technology and feedstock development, as
well as demonstration projects. Several of the federal programs have now expired.
10
Table 2.2
Federal Policies to Support Renewable Fuels
Organization
Initiative
Description
Start/End
Natural
Resources
Canada
(NRCan)
ecoEnergy for
Biofuels
Financial Support: $1.5 billion,

operating incentive to facilities that
produce renewable alternatives
togasoline & diesel
20082017
Ethanol
Expansion
Program
Financial contributions with

repayment terms towards the
construction of new or expansion
ethanol fuel production facilities.
20032007
National
Renewable Diesel
Demonstration
Initiative
Supported projects that demonstrate

how renewable dieselwill perform under
Canadian conditions. Contributions
were made to projects designed to
demonstrate cold weather operation,
long term storage, impacts on engines
&equipment &distribution of the fuel.
20082010
Biofuels
Opportunities
for Producers
Initiative (BOPI)
Designed to help farmers & rural

communities hire experts to
help develop business proposals
to expandbiofuels production
capacityby agricultural producers
20062008
Agricultural
Bioproducts
Innovation
Program
Funded networks promoting R&D,

technology transfer & commercialization
in areas such asbiofuels, other forms
of bioenergy, industrial chemicals,
biomaterials, & health products
20062011
ecoAgricultural
Biofuels Capital
Initiative
(ecoABC)
Financial Support: $159 million

(upto$25 million per project)
tobuildor expand transportation
biofuel production facilities
20032012
AAFC Growing
Forward 2s
Programs
Financial Support: $3 billion

focused on research & innovation,
competitiveness & market development,
adaptability & industry capacity
20132018
Agriculture
& Agri-Food
Canada
(AAFC)
11
Organization
Initiative
Description
Start/End
Sustainable
Development
Technology
Canada
SD Tech FundTM
Financial Support: Over $500 million

towards late-stage development &
pilot, pre-commercial clean tech,
likeadvanced renewable fuels, heat
and power
20022015
Sustainable
Development
Technology
Canada
Next Gen
BiofuelsFundTM
Financial Support: $500 million

towards bridging the gap between
technology & market development.
Aimed at 1st-of-kind commercial
scale demo facilities for advanced
renewable fuels & co-products
20072017
2.2 Provincial Initiatives

Provinces have also undertaken measures to encourage investment in bioenergy
capacity to reduce reliance on fossil fuels, support renewable energy standards where
they exist and create value-added opportunities. Several provinces have mandated
renewable fuel content and announced infrastructure grants. Key provincial initiatives
are summarized below:
British Columbia:

The mountain pine beetle (MPB) infestation had killed 51% of lodgepole pine
volumes in British Columbias interior by 2010. The provincial government raised the
annual allowable cut (AAC) from a 50 Mm3 to 80 Mm3 in 2010 to harvest this dead
pine for wood products and bioenergy before it decayed or burned in natural fires.2
In the 1990s sawmills were required to incinerate unused mill residue, thus wasting
the biomass and emitting dangerous particulate matter. The closure of beehive
burners was legislated in 1995, but life extensions left many still running. All
remaining beehive burners must be closed as of December 31, 2016.3
BC Ministry of Forests, Lands & Natural Resources. Mountain Pine Beetle Epidemic presentation
2012. Retrieved from: http://www.leg.bc.ca/cmt/39thparl/session-4/timber/presentations/
MoFLNRO_Mountain_Pine_Beetle_Current_Status_and_Projections_2012Jun4.pdf
Government of BC. (2013) Wood Residue Burner and Incinerator Regulation. Retrieved from:
http://www.bclaws.ca/Recon/document/ID/freeside/51_519_95
12
The BC Bioenergy Network was set up in 2008 to deploy near-term bioenergy

technology capital for pilot and demonstration plants, and to support education
and advocacy for the sector. By the end of 2013 it will have spent $16.1 million to
advance bioenergy developments in BC.
Other initiatives include the introduction of the 2008 carbon tax, which imposed a price
on the use of carbon-based fuels (e.g. gasoline, diesel, propane, natural gas and coal);
the carbon neutral public sector policy, which required all public sector organizations to
measure, reduce and offset GHG emissions from buildings, vehicles and paper use; and
the innovative clean energy (ice) fund, which approved over $77 million for 62 projects
developing clean energy and technologies in the province.
Quebec:

The Quebec government took an approach unique in Canada. Rather than

keep wood allocation decisions at the upper echelons of government, Quebec
allowed regional economic development groups, or CREs (Conseil rgionale
de lenvironnmente) to examine local bioenergy proposals and allocate wood
where it would best help communities. CREs are comprised of mayors, economic
development organizations, and local stakeholders.
In 2008, the Quebec government allocated $150 million to promote the conversion
of municipal and institutional heavy oil heating to biomass through direct grants.
In 2013, the Quebec government introduced a cap and trade system for GHG
emissions. Businesses operating in Quebec that emit more than 25,000 tonnes or
more of CO2 equivalent each year are subject to the cap and trade system. These
businesses require emission allowances to operate. Each emission allowance is
equal to one tonne of C02 equivalent and is issued exclusively by the Quebec
government. For the first compliance period of 20132014, only industrial and
electricity sectors are subject to the system. The second and third compliance
periods (20152017 and 20182020) includes fossil fuel distributors. The cap
and trade system is also open to other individuals and entities that would like
toparticipate in the carbon market. In 2011, the Quebec government established
a program under Hydro Quebec for the purchase of 150 MW, later amended to
300MW of electricity produced in Quebec from cogeneration plants burning
residual forest biomass.
13
Ontario:

Ontario learned from European experience that feed-in-tariffs (FIT) were the
most effective incentive for renewable energy. However the FIT programs were
much better subscribed in the wind and solar power sectors than in bioenergy.
The Ontario Power Authority Standard Offer Program in 2007 yielded 262 power
contracts: 69 for wind, 158 for solar, and only four for biomass heat and power.
Under a second program in 2009, 184 projects were approved: 77 solar, 48 wind,
and two biomass.4 The 2009 Green Energy and Economy Act led to the creation
of a two-year FIT Program starting October 2011, where 99% of contracts executed
were for solar. The FIT programs did not take into consideration that one of the
great benefits of bioenergy is renewable heat. The process of allocating provincial
wood resources also held up many potential bio-energy projects.
A major policy success was for on-farm biogas where Ontario is a leader. The Farm
Innovation Program (FIP), the Canadian Agricultural Adaptation Program (CAAP),
and the Ontario FIT/MicroFIT Programs, made funding and tax incentives available
for initial planning, building, and implementing of farm biogas projects.
In August 2007, the Ontario Government introduced the Environmental Protection

Act: Ontario Regulation 496/07 Cessation of Coal Use. The regulation required that
the Ontario Power Generation (OPG) phase out the use of coal to produce electricity
after December 31, 2014. This regulation was fulfilled on April 8, 2014, when Ontario
stopped burning coal at its Thunder Bay Generating Station. In August 2014, the OPG
completed its conversion of the Atikokan Generating Station, which now burns wood
pellets for peak load power production. The OPG is currently converting the Thunder
Bay Generating Station to burn torrefied pellets, an advanced biomass fuel that
exhibits coal like properties and has similar heat content to coal. In September, 2014
the OPG signed a supply agreement with Arbaflame, a Norwegian company.
OPA. (2014) FIT Program Updates, 2014. Retrieved from: http://fit.powerauthority.on.ca/

program-updates/past-updates/bi-weekly-fit-and-microfit-program-reports-version-1
14
Manitoba:

In 2011, Manitoba announced an emissions tax on coal in anticipation of a pending

ban on coal heating, thereby giving many small coal users time to make the switch to
alternatives. As of January 1st 2014, Manitobas Conservation and Water Stewardship
introduced North Americas first petroleum coke and coal heating ban with a grace
period up to July 1st, 2017 given approved conversion plans are filed by June 30th,
2014.5 Fines will be charged to those who do not comply or implement the submitted
conversion plans. The ban is designed to reduce the GHG emissions associated with
burning coal.
Manitoba has introduced the $400,000 Biomass Energy Support Program to help
users of coal and biomass processors make the transition from coal towards bio-based
energy systems and supply chains. This program will help the development of a
renewable industry, create jobs and use the three to five million tonnes of biomass
available annually in Manitoba.6
ALBERTA

In 2006, the Alberta government introduced the Nine Point Bioenergy Plan
that included a variety of policy measures that encouraged the development of
biofuelsand bioenergy infrastructure; facilitated the establishment of bio-industrial
networks; established micro-generation standards for bioenergy; improved
taxation and investments instruments for the bioenergy sector; and established
therenewable fuel standard,
In 2008, the Alberta government implemented the Climate Change Strategy

andintroduced the Specified Gas Emitters Regulation. This regulation targets
theGHG emissions of large industrial emitters, whose emissions intensities
exceed100 kt CO2e annually. These large emitters are given the following three
options: make improvements to their operations to secure emissions reductions,
purchase offsets or emissions performance credits or pay into the Climate Change
Emissions Management Fund at a rate of $15 per tonne for any emissions exceeding
the target. The fund is earmarked for the development of new technologies for
reducing GHG emissions and has collected $398 million since 2008. The fund
hasallocated $213million to 51 clean technology projects.
Government of Manitoba. News release, Ban Designed to Cut Greenhouse-gas Emissions,

December23, 2013. Retrieved from: http://news.gov.mb.ca/news/index.html?archive=&item=20070
Government of Manitoba. (2013) Manitoba Biomass Energy Support Program Q&A Report, Retrieved from:
http://www.gov.mb.ca/agriculture/innovation-and-research/biomass-energy-support-program.html
15
2.3 International biofuel developments

European Union (EU) leaders enacted a climate and energy package in 2009
committing Europe to become an energy-efficient, low carbon economy via the
legally-binding 20-20-20 targets for 2020:7

A 20% reduction in EU GHG emissions from 1990 levels;
A 20% share of EU energy consumption produced from renewable resources;
A 20% improvement in the EUs energy efficiency.
However the targets are being adjusted because of the slow recovery from the recent
economic downturn and the different paths to renewable energy being chosen by
various EU countries. The legally binding obligation to reduce emissions 20% by 2020
is now being negotiated by EU leaders. A main piece of the framework is the target to
reduce domestic GHG emissions by 40% below 1990 levels by 2030. The commission
also proposes to increase the share of renewable energy to at least 27% of energy
consumption by 2030.
Specific to biofuels, the EU Renewable Energy Directive (RED) adopted in 2009, made
a commitment to source 10% of transport fuel from renewable sources by 2020. The
European Commission then revealed proposals to change its biofuels policy to limit
theamount of food crop-based biofuels and bio-liquids that can be counted towards
the 10% target. The EU has proposed a 5%8 cap on first-generation biofuels but member
states are in disagreement over what the cap should eventually be. Negotiations
continue, but the EU intends to develop second-generation biofuels made from
non-food feedstock, such as waste materials or algae to meet the 10% target.
EU. (2013) European Commission 2020 Climate & Energy Package. Retrieved from:
http://ec.europa.eu/clima/policies/package/
EU. (2013) European Commission, RE Targets by 2020. Retrieved from:

http://ec.europa.eu/energy/renewables/targets_en.htm
16
3.0
Users of
Biomass/
Bioenergy
Producers
17
3.1 Cogeneration Industrial Heat and

PowerProducers (PPs & IPPs)
3.1.1
Cogeneration Pulp & Paper
The 2013 Canadian Bioenergy Data Survey showed 39 P&P mills operated cogeneration
facilities. Thirty-six reported power-generating capacity, totaling 1,579 MW, with 46% of
this generation is in BC.
Table 3.1
Number of Pulp and Paper Mills with Cogen
MWe
Operating
Reporting
BC
726.5
46.0%
14
14
AB
275.0
17.4%
NB
147.7
9.4%
ON
184.0
11.7%
QC
144.0
9.1%
SK
40.0
2.5%
MB
22.0
1.4%
NS
25.0
1.6%
NF
15.0
0.9%
1,579.2
100%
39
36
Total
Source: 2013 Canadian Bioenergy Data Survey.
The pulp and paper sector is one of Canadas most energy-intensive sectors, with
energy typically accounting for more than 25% of total production costs. To reduce
costs in an increasingly competitive world, the sector turned to on-site mill residues,
pulping liquor, and residues from nearby sawmills to generate the combined heat
and power (CHP) needed for operations. Other manufacturers also began using
biomass over fossil fuels as a cleaner, more economic option for heat and power
production. However after a 2005 peak, there was a decline in biomass produced
energy. A long-term structural weakening in the paper sector ingeneral and the
18
newsprint sector in particular reduced domestic demand for pulp. Inaddition, with
increased globalization of the pulp and paper industry, many Canadian mills became
uncompetitive and were forced to shut down, thereby necessitating the shutdown of
adjacent cogeneration facilities as well.
In 200406 the US housing industry became super-heated and the demand for
Canadian lumber peaked, with the availability of mill residue reaching an all-time
high of approximately 21.2 million bone dry tonnes (BDt).9 The 2007 US housing
market collapsed, touching off a worldwide financial crisis, and the demand for
Canadian lumber declined rapidly, reducing mill residue availability in 2010 to only
50% of what itwas in 2005. The resulting decline in energy produced from biomass
isillustratedbelow.
Figure 3.1
Energy Use from Biomass10
ENERGY USE IN THE CANADIAN INDUSTRIAL SECTOR: PRODUCED FROM WOOD WASTE & PULPING LIQUOR
700
Energy produced from

Wood & Pulping liqour (PJ)
600
500
400
300
200
100
0
1990
1995
2000
2005
2010
Year
Total Industrial
P&P
Other Manufacturing
Statistics Canada. Canadian Sawmill Data, 2013. Retrieved from: http://cansim2.statcan.ca/cgi-win/

cnsmcgi.pgm?Lang=E&SP_Action=Result&SP_ID=3416&SP_TYP=2&SP_Sort=-0
OEE. (2013) Comprehensive Energy Use Database, Retrieved from: http://oee.nrcan.gc.ca/corporate/
statistics/neud/dpa/showTable.cfm?type=CP&sector=egen&juris=ca&rn=1&page=4&CFID=29285441&
CFTOKEN=d1f50966c5498ff6-64197223-D655-9180-4F0209D76EB1DB7E
10
19
Despite the decline, about 5,380 gigawatt hours (GWh) of electricity was generated
using woody biomass and spent pulping liquor as fuel in 2010, representing about 1% of
the electricity produced in Canada.11 In addition to sourcing almost 60% of their energy
needs from by-products including hog fuel, sludge, and spent pulping liquor,12 the
sector has found a solution to disposing a majority of their waste products. By pursuing
efficiency gains in energy generation, pulp and paper manufacturers have reduced their
energy use by 1% p.a. since 1990.13 As of Q3, 2012 11 pulp and paper mills in Canada met
or exceeded their internal electricity demand by self-generation.14 Though biomass is
increasingly being used for community heat, the majority of wood-derived fuels are
used by the industrial sector.
In 2009, the federal government announced the Pulp and Paper Green Transformation
Program, a $1 billion fund to improve the environmental performance of Canadas
pulp and paper mills and renew the industrys position in the global marketplace.
In total, 24companies received credits based on black liquor production, and
98project proposals were approved in 38 communities nationwide.15 Funding ranged
from $80 000to over $100 million per project. Projects undertaken included boiler
and turbineupgrades, installation of energy-efficient motors and emission-control
equipmentand renewable energy production. The program helped to support more
than14,000 jobs and resulted in 195 MW of new renewable energy capacity.
Table 3.2
New Renewable Energy Capacity due to PPGTP
New Capacity
2010
2011
2012
2013
2014
Pending
Total
27.4
19.0
66.0
51.5
2.0
29.1
195.0
Of 39 cogeneration plants, 34 reported feedstock data. Overall, 857 MW, or 59% was
produced from pulping liquor, 325 MW from wood waste, and 165 MW from hog fuel.
Inall 39 plants, 92% is biomass-based capacity and 8% is from fossil fuels.
Ibid
11
NRCan. (2006). Benchmarking Energy Use in Canadian Pulp and Paper Mills. Retrieved from:
http://www.nrcan.gc.ca/sites/oee.nrcan.gc.ca/files/pdf/industrial/technical-info/benchmarking/
pulp-paper/pdf/benchmark-pulp-paper-e.pdf
12
NRCan, (2006). Benchmarking Energy Use in Canadian Pulp and Paper Mills.
13
Fisher International. FisherSolve, Norwalk, CT, (2012). Annual Power Usage. Retrieved from:
http://www.fisheri.com/
14
NRCan. (2012) Pulp & Paper Green Transformation Program, Report on Results. Retrieved from:
http://cfs.nrcan.gc.ca/pubwarehouse/pdfs/34045.pdf
15
20
Table 3.3
Power Production by Feedstock
Hog
Fuel
Pulping
Liquor
Wood
Waste
Natural
Gas
Heavy
FuelOil
Total
Capacity
165.3
857.0
324.9
107.7
7.3
1,462.2
Percentage of
total capacity
11.3%
58.6%
22.2%
7.4%
0.5%
3.1.2 Cogeneration Independent Heat & Power Producers:

Large heat and power is not only found at pulp and companies. In Canada there are
23 IPPs, including eight in BC. Of these, four have an adjacent industrial operation that
purchases heat enabling the IPPs to produce both heat and power at a higher efficiency
than if they produced only power. Combined capacity is 540 MWe and 148 MWth for a
total of 688MW.
Table 3.4
2013 Bioenergy Capacity by IPPs
MWe
MWth
MW
BC
138.3
147.8
286.1
AB
78.5
0.0
78.5
ON
191.2
0.0
191.2
QC
70.6
0.0
70.6
NS
61.2
0.0
61.2
539.8
147.8
687.6
23
Total
21
Two more plants with a combined capacity 241 MWe are in the commissioning stage,
seven are under construction, and three more are planned.
Table 3.5
Capacity of Future IPP Plants
MWe
Commissioning
241
Under Construction
135
92
468
12
Planned
Total
IPPs that use biomass draw on a combination of wood waste and hog fuel, sourced
onsite and from local sawmills. A few plants also use natural gas to ensure sufficient
fuel to run the power generation facility. In 2013, Ontario IPPs generated 70.7 MWe from
biomass and 120.5 MWe from natural gas.
Table 3.6
2013 Power Generation Capacity by Fuel (MWe)
Biomass
N.Gas
Total
BC
138.3
138.3
AB
78.5
78.5
ON
70.7
QC
70.6
NS
61.2
Total
%
120.5
191.2
70.6
61.2
419.3
120.5
539.8
78%
22%
100%
22
In 2013, 16 of the 23 operating IPP cogeneration plants reported a total of 510 workers
or an average of 32 employees per plant. That may appear low, but cogeneration plants
are often in small communities where that number of jobs is significant. The majority
of plants either received biomass feedstock onsite or from local sawmills. However,
with mill residues now increasingly scarce in some localities, some plants are sourcing
feedstock from a wider area requiring more indirect employees such as truck drivers.
Three plants reported employment of 80, or an average of 27 per plant. Three plants
reported indirect employment at an average of three persons per plant.
Table 3.7
Employment by IPPs
Plants
Feedstock
Indirect
510
80
# Plants
16
Average
32
27
Employment
23
24
4.0
Biogas
The biological process of breaking down organic material in an
oxygen-free environment is referred to as anaerobic digestion (AD).
This process produces a combination of methane and carbon dioxide
called biogas, and other nutrient-rich byproducts.16 Furthermore,
the key element resulting from this process is methane that if
compressed, can be used as a replacement renewable natural
gas(RNG) to fuel motor vehicles.
25
16
Biogas systems can create energy from a variety of waste streams, including onsite
organic farm waste and industrial, commercial, and institutional waste streams from
food processing plants, slaughterhouses, schools and hospitals. The primary feedstock
in farm-based biogas systems is manure but many other materials may be digested
including energy crops (corn silage, hay and grasses), other agricultural inputs, oils and
greases from urban centers, and beef and potato renderings. All regions of Canada have
significant agricultural activity and institutional waste streams that could be utilized
to generate energy and revenue while reducing waste, and to extend landfill capacity
and lifetime, among other environmental benefits. According to the Ontario Biogas
Association (BA), there are multiple applications and benefits for biogas, such as:17

Fueling combustion engines to run a generator, producing electricity and heat (CHP)
Upgrading to RNG for injection into the natural gas grid, delivering green renewable
energy through existing infrastructure
Compressing biogas-sourced RNG for use as a transportation fuel, or as a direct

replacement of fossil-sourced natural gas in household heating, or industrial,
commercial and institutional processes.
Data on biogas installations is not widely publicized or available. The biogas category was
new to the 2012 Data Survey, which identified 43 biogas systems in operation in Canada.
The 2013 Data Survey identified 77 biogas systems, some of which were newly started.
Table 4.1
Biogas Systems in Operation in Canada 2013
Region
Operating
Capacity (kW)
BC
2,400
AB
10
SK
Region
Operating
Capacity (kW)
QC
14
63,096
9,075
NB
1,500
4,030
PEI
1,200
MB
70
NFL
ON
37
27,223
77
108,594
Total:
OMAFRA. (2013) Bioenergy: Biogas (Anaerobic Digestion). Retrieved from:

http://www.omafra.gov.on.ca/english/engineer/ge_bib/biogas.htm#1
16
Biogas Association (2013) About Biogas. Retrieved from:

http://www.biogasassociation.ca/bioExp/index.php/infopage/about_biogas
17
26
Ontario is the clear leader in on-farm AD installations with 37 operational biogas

facilities. Quebec has 14 and Alberta 10. Quebec has fewer than half the installations
asOntario, but the total capacity of 63 MW doubles that in Ontario because of the
output of five large Quebec plants.
Ontarios development was driven by various provincial incentive programs including
the Ontario Biogas Systems Financial Assistance Program that invested $11.2 million
into 27 biogas systems. Also implemented were FIP, CAAP, and Ontario FIT/MicroFIT
Programs, whereby funding and tax incentives became available for initial planning,
building, and implementing on farm biogas projects.
However, Ontarios microFIT program did not prove successful in supporting
bioenergygrowth. A March 2014 program update showed no successful applicants
inbiogas, biomass and landfill focused projects and the number of bioenergy
applications is declining. For the FIT program, 57 biogas applications were under
reviewas of January 2014. To promote greater growth in the biogas sector,
necessarychanges to the FIT programs are needed. This could include a more
streamlined renewable environmental approval process, and priority access to
thegridsince biogas generates reliable, flexible and dispatchable power.
In Quebec, the provincial government implemented a regulation in 2005 aimed at
minimizing the environmental impact of biogas in landfills, and requiring those that
bury more than 50,000 tonnes of waste annually to capture or properly dispose of
the biogas. The Quebec government created the Biogas Programme committing
$38million over six years in financial support to projects focused on the capture or
disposal of biogas to reduce GHG emissions. Alberta leads the west with ten known
operational biogas installations, while BC is catching up with three biogas projects
indevelopment.
There are now 51 known biogas projects that are currently in development, either under
construction, in the feasibility stage or proposed. Ontario, with 44 of the projects, clearly
exhibits a strong commitment to biogas heat and power development on farms.
27
Table 4.2
Biogas Systems in Development in Canada 2013
Operating
Commissioning &
Construction
Stage
Feasibility
Stage
Proposed
BC
AB
10
SK
MB
ON
37
28
16
QC
14
NB
PEI
NFL
77
13
32
19
Region
Total:
In BC, biogas development was limited because of regulatory challenges and low
natural gas prices. The Ministry of Environment in BC had an on-farm AD Waste
Discharge Authorization that put a limit of 25% on the allowable volume of nonagricultural feedstocks that an on-farm anaerobic digestion system can use. This
type of regulation significantly impacts economic viability and restricts biogas
projectdevelopment to sites with an ideal combination of farm size, access to
desirablefeedstocks and good proximity to interconnection sites. A higher electricity
tariff and funding are needed to help make biogas projects economical for farm
developments in BC.
Biogas in Alberta has started to gain attention in the agriculture industry due to its
energy potential and environmental benefits. The Alberta Bioenergy Producer Credit
Program offers incentives for commercial bioenergy production that should increase
the number of biogas systems.
28
Renewable energy plans in Atlantic Canada are emerging and two regional solid waste
projects are being developed in New Brunswick. Laforge, the first on-farm anaerobic
digestion system, became operational in 2011. Nova Scotia introduced a Feed-In Tariff
program in 2010 and to-date has approved 85 projects, including six biomass projects
and two biogas projects (on-farm & landfill).18
4.1 Feedstocks:
The primary feedstock in farm-based biogas systems is manure, but many other
materials may be used including energy crops (corn silage, hay and grasses), other
agricultural inputs, oils and greases from urban centers, and institutional waste streams
from food processing plants, slaughterhouses, schools and hospitals. The methane
captured from the process can run a generator producing electricity and heat,be
upgraded to RNG for injection into the natural gas grid, or be compressed for use
as a transportation fuel or to replace natural gas in household heating, industrial,
commercial and institutional processes.
The three largest systems by far, with combined capacity of 44.9 MW, are in Quebec.
However these facilities did not report the source of their feedstock. Overall, there are
18other large systems over 1 MW with combined capacity of 48.5 MW, with eight of
these systems not reporting the source of their feedstock. Of the remaining 10 large
systems, three used MSW as a feedstock and the rest used a variety of agricultural
wastes including manure.
According to the Ontario BA, there are 3,000 food-processing plants, 140 slaughterhouses,
and numerous schools, cafeterias, and hospitals that generate and separate organics that
could supply organic wastes to between 400 to 500 anaerobic digesters.19
4.2 Employment
The 2013 Data Survey did not retrieve information on employment in the biogas sector.
However the Biogas Association (BA) commissioned a Canadian Biogas Study released
in 2013 highlighting the sectors job potential.
Government of Nova Scotia. (2014) Report on the Review of the Community Feed-In-Tariff
Program, March 2014. Retrieved from: http://energy.novascotia.ca/sites/default/
files/a_comfit_review_report_march_2014.pdf
18
Biogas Association. (2013) FIT Program Two-Year Review. Retrieved from:

http://www.biogasassociation.ca/bioExp/images/uploads/documents/2012/singlePosts/
APAO_Briefing_Note_FIT_Program.pdf
19
29
The BA study findings related to employment in the biogas sector:20

Biogas can create 2,500 technical, manufacturing and construction/trades jobs

inOntario
Biogas can generate $1 to $1.5 billion dollars of investment in rural economic

development, as proven in Germany with its similar agricultural base
Realizing the full potential of biogas development would lead to up to 1,800separate

construction projects with a capital investment of $7 billion and an economic spin-off
of $21 billion to the Canadian economy.
Construction projects would create 16,700 construction jobs for a period of one
year and 2,650 on-going long-term operational jobs.
Finally, the biogas sector could positively affect and support over 100 new and
expanded companies, including biogas system designers and developers, equipment
suppliers, and laboratories.
Biogas Association. (2013) Canadian Biogas Study 2013. Retrieved from: http://www.biogasassociation.ca/
bioExp/images/uploads/documents/2013/resources/Canadian_Biogas_Study_Summary.pdf
20
30
5.0
Community
Heating
in Canada
Fuel wood is a local, economical, and renewable energy resource
that is used in more than three million Canadian homes as a source
of heat. 22 The rising cost of fossil fuel in the last 1020 years and
a growing awareness of biomass energy gave rise to the use of
efficient multi-building biomass boilers, particularly in areas not
connected to a natural gas pipeline.
31
21
Over the last three years, the survey discovered that the most notable growth in bioenergy
installations in Canada has been in bio-heat. Before 2000, there were only five community
bio-heat systems in Canada; a municipal building heating system in Charlottetown; a
hospital in Montague, PEI; a Nova Scotia Agricultural College; the Cree First Nation Plant
in Oujebougamou, Quebec, and Opeongo Forestry in Renfrew, Ontario. Until 2006, there
was only a smattering of bio-heat developments, yet in the last five to six years there has
been a proliferation of development, primarily in BC, the NWT and in Quebec.
The 2013 survey revealed 74 installations operating in 2012 which further grew to
109 in2013. Another 33 were under construction or being commissioned, 15 were
infeasibility studies, and 41 planned. BC and the NWT are clear leaders with 30 and
29installations respectively. Ontario and Quebec have 11 operating, but Quebec is on
the verge of serious growth based on the number under construction or in planning.
Anew initiative in PEI is spurring development, with nine systems operating and
14under construction. When those projects under construction are complete, Canada
willhave 142 operating systems compared with the five systems that existed in 2000.
Table 5.1
Community Heat Installations in Operation by Province
2000
2011
2012
2013
U.Constr.
Feasibility
Planned
BC
22
22
30
20
AB
SK
MB
ON
11
QC
10
10
11
15
18
NB
NS
PEI
14
NL
NWT
19
20
29
70
74
109
33
15
41
YK
Total
NRCan. Forest Communities Program, 2013. Retrieved from: https://www.nrcan.gc.ca/forests/

federal-programs/13135
21
32
The number of buildings connected to the 109 operating systems indicates the
extenttowhich biomass has displaced fossil fuels. In 2012, 443 buildings were connected
to community bio-heat systems, and that grew to 581 by 2013. The number of connected
buildings does not indicate the number of residences that are a part of any complex, such
as large apartment buildings or a University campus such as UNBCsNexterra Gasification
system. A large majority of the installations connected large residential complexes and
buildings such as schools, hospitals, businesses, publicand municipal buildings.
Table 5.2
Number of Buildings Connected to Bio-heat Systems
Province
2012
2013
Ch.
BC
57
79
22
AB
SK
ON
28
37
QC
177
172
-5
NB
NS
PEI
127
140
13
NWT
43
131
88
443
581
138
YK
Total
Of the 109 operating community-heating plants, 92 reported plant capacity. The

largestby far is PEI Energy Corp at 35 MW, an enterprise that has expanded and
improved since its 1986 inception. The three largest systems comprise 48.2 MW, or
halfof all heat capacity. Eleven systems are in the range 14.9 MW, 65 are 100kW1MW,
and 17 are less than 100 kW. Seventeen installations did not report.
33
Table 5.3
Community Heating Plant Capacities (kW)
Capacity kW
PEI Energy Corp.
PEI
35,000
CF Matapedia CSSSMont Joli
QC
8,200
La Cit Verte
QC
5,000
Large >5MW
48,200
Medium 14.9 MW
11
21,504
Small 100 kW1 MW
65
26,916
Very Small (< 100 kW)
13
477
Not Reported
17
109
97,097
Total
Heating plants use various raw materials. In the NWT, wood pellets feed almost all of the
systems. In BC, 15 use wood pellets while 20 use either wood waste or hog fuel. Quebec
did not report, but it is known that some of the heat plants use harvest residues.
34
Table 5.4
Feedstock of Heating Plants
Cord
Wood
Hog Fuel
MSW
Willow
Chips
Wood
Pellets
Wood
waste
Not
Available
AB
BC
12
15
NB
NS
NWT
25
ON
PEI
QC
18
SK
44
12
23
YK
Total
34
In Canada, there are many remote and semi-remote Aboriginal communities that use
fuel oil for heat. These communities are surrounded by wood resources and are obvious
candidates for biomass heat especially from wood chip boilers. However pellet boilers
may not be ideal because there is no nearby source of pellets and many of these
communities lack rail and road access.
5.1 Provincial Leaders Policies driving

growth in biomass heat
Provincial governments are promoting biomass heat development by developing and
implementing supportive policies and programs focused around a greater utilization
of biomass for energy. By doing so, provinces are reducing their dependence on fossil
fuels and reducing GHG emissions from energy production while developing a local,
renewable industry.
35
Table 5.5
Provincial Programs Supporting Bioheat Development in Canada
Province
British
Columbia
Northwest
Territories
Initiative/
Program
Objectives/Description
Implemented
BC Bioenergy
Strategy (Agri/
Forestry/Energy)
$25M into Bioenergy Network, for

investment & innovation in bioenergy
projects & technologies. Develop minimum
of 10 community energy projects that
convert local biomass into energy by 2020.
2008
Innovative Clean
Energy Fund
encouraging the development of new

sources of clean energy and technologies
to help support local economies. Since
2008 $77 million approved for 62 projects
20082013
Wood Waste
2Rural Heat
helps rural communities turn wood waste

into heat for buildings and homes is being
expanded throughout the Interior of BC
Provincial Wood
Stove Exchange
Program
New & updated bylaws for residential

wood combustion wereenacted (CSA/EPA
certified). Program support to communities
to promote the exchange of old wood
stoves for cleaner alternatives.
20072012
GHG Strategy
Objectives: NWT Housing Corporation

Energy Conservation Initiatives
woodburning stoves offered with
homeownership packages; Biomass
Wood pellet boiler pilot project;
Researchon wood pellet heat.
20072011
NWT Biomass
Energy Strategy
Objectives: increase the use of biomass

fuels in all segments of the NWT space
heating market; Achieve measurable life
cycle GHG emission reductions by using
biomass to offset fossil fuels; Create longterm economic benefits & employment
opportunities in the supply & distribution
of biomass products &services
2010/
201215
Energy
Efficiency
Incentive
Program
Rebate program designed to help

homeowners and consumers perform
energy and water saving home
improvements, including wood
pelletandwood stoves.
2011
Alternative
Energy
Technology
Program
Community
Renewable
EnergyFund
Funding of up to one-half of the

project cost (max of $50,000/yr.) to
help community-based installations
of alternative energy systems
or the conversion of an existing
conventionalenergy system.
2011
36
Province
Initiative/
Program
Objectives/Description
Implemented
Quebec
Developing
thevalue of
forestbiomass
Action Plan/
ForestBiomass
Allocation
Program
Promote the use of 1.5M AMT of

forest biomass (22.6% of available
volume per year): Objectives: 1. Make
biomass available from public forests;
2. Encourage the replacement of fossil
fuels; 3.Support investment & innovation;
4.Stimulate demand for forest biomass/
Biomass allocation via regionally
specificbiddingprocesses.
20082013
Prince
Edward
Island
PEI Energy
Strategy
To develop the Provinces abundant

biomass resources & achieve a 50%
increase in biomass use leading to 10 MW
of new electrical generation capacity for
Island utilities.
2008
Community
Economic
Development
Investment Fund
PEI Launched Tax Credit programme

CEDBs were developed as a tax credit
program to encourage residents of P.E.I. to
support entrepreneurship in communities
to take an active rolein economic
development.
2012
5.1.1 British Columbia

In BC, bio-heat installations grew from 22 in 2012 to 30 the next year. The BCBioenergy
Network was established in 2008 as part of a bioenergy strategy. Since its inception, it
has been a facilitator for deploying near-term bioenergy technology capital at pilot and
full-scale demonstration phases, as well as providing support for bioenergy capacity
development, education and advocacy for the sector.To-date the network supported
17 capital and 12 capacity building projects, encompassing a number of biomass
technologies and applications including several heat related projects.22 Another notable
organization supporting bioenergy in BC is the Wood Waste 2 Rural Heat (WW2RH),
previously known as Community Futures North Cariboo Green Heat Initiative. WW2RH
provides project support towards the development of the bioenergy heat sector by
providing market and industry development assistance, pre-feasibility study assistance,
professional education and training. As a result of supportive policies in BC and despite
the low cost of natural gas, there are 30 new community heat projects in operation, four
under construction and another 20 in various planning stages.
Personal communications with BCBN, December 2013.
22
37
Wood Waste 2 Rural Heat

In 2013, WW2RH expanded its reach throughout BCs interior. The program set out
to invest $240,000 over two years thanks to provincial support, and partnership with
the Columbia Basin Trust, the Southern Interior Beetle Action Coalition, the Omineca
Beetle Action Coalition and the Cariboo-Chilcotin Beetle Action Coalition. WW2RHs
bioenergy program will work with local governments, First Nations and not-for-profit
organizations to increase the use of local wood waste in efficient and cost-effective
heating projects that will result in the development of 9 projects in 7 regions.
5.1.2 Northwest Territories:

In the NWT, heating accounts for nearly a quarter of all energy consumed. The
extremely cold winter climate is a major contributor to high costs of living and poses
a barrier to economic growth. With no large-scale distribution of natural gas, and
imported diesel oil being the principal fuel source for most communities, the growing
pellet market in the NWT is beginning to shift the energy landscape. In 2007, cordwood
was the most common type of biomass used to produce energy, accounting for 6%
of the total energy demand for space heating. Since then, the use of cordwood has
remained stable but the consumption of wood pellets has grown considerably, now
accounting for 5% of total space heating needs.23 Where cordwood was almost entirely
used for home heating, wood pellets are dispersed throughout residential, commercial
and institutional segments of the market and are concentrated in those communities
that are connected to an all-season road system. A recent government estimate of
NWT wood pellet consumption is 15,000 tonnes per annum.
The 2010 NWT Biomass Energy Strategy introduced programs that supported the
proliferation of biomass development and community-led biomass projects. The
NWT is now a leader in the deployment and use of biomass technologies and was
recently deemed as the pellet boiler capital of Canada. There are 29 community
heat installations scattered throughout NWT. The total of about 230 pellet boilers
in operation indicates there are many single dwellings with pellet boilers. Biomass
community heating is being implemented at both the residential and institutional scale.
For example, commercial residential operations are using biomass to heat their rental
units. Inukshuk Housing Co-op generates 300 kW of bioheat for 56 apartments.
The territorys largest landlord, Northern Property REIT, with more than 1,000 rentals
including apartments and multi-bedroom homes, has a number of large pellet boilers
heating apartment buildings. It also intends to convert more of its buildings to pellet
heat. Similarly, the territorial government has been working on converting its buildings
to pellet boilers. In 2011, the city signed a memorandum of understanding with Corix
Utilities for a $60.4 million community energy project that would heat 39 downtown
GNWT. NWT Biomass Energy Strategy 20122015. Retrieved from: http://www.enr.gov.nt.ca/_live/
documents/content/Biomass_Energy_Strategy_2012-2015.pdf
23
38
Savings by The Government of the NWT

Five years ago the territorial government realized that heating with biomass pellets
could reduce costs up to 50%. A Public Works and Services (20122013) Annual
Report on Energy Conservation Projects revealed that:

In 20122013 alone the NWT reduced its consumption of fossil fuels for space
heating by over 2.5 million litres.
In 20122013, wood pellets accounted for 11% of total energy consumed, directly
contributing to reduction of imported heating oil.
By the end of 2013-2014, through the Government of NWTs energy investments,

total reduction in fossil fuel consumption for space heating in buildings is
expected to exceed 13.5 million litres with corresponding decreases in GHG
emissions of over 36,000 tonnes.
The Government of NWTs investment in energy improvements and alternative

energy such as biomass for space heating have generated savings of more than
$3.3 million since 2011.
Source: http://www.assembly.gov.nt.ca/sites/default/files/13-05-06td_92-174.pdf
buildings involving a mix of pellet boilers and geothermal heat from a redundant gold
mine. Over the next few years the NWT Housing Corporation, with 2,300 public housing
units, will work with the lead Government of the NWT agency Arctic Energy Alliance
(AEA) and other government departments to assess the potential of expanding the
use of biomass heat in public housing. A report by the AEA suggested, If every
public building within Yellowknife was heated by wood pellets, the demand would be
200,000 tonnes per year. A further 1.5 million litres of heating oil could be displaced
ingovernment buildings throughout the NWT. 24
Another organization that has made significant contributions to the development
of bioheat in the NWT is Arctic Green Energy (AGE). It was the first company
to bring in advanced European boilers to the NWT market and has been part of
developingbiomass heating solutions and energy supply contracts for their northern
clients. AGE is a major installer of pellet boilers in Yellowknife and also offers bulk
delivery of pellets, bringing in three B-trains of 129 tonnes25 of bulk pellets per week
to Yellowknife from La Crete in Alberta. In 2013, retailer Canadian Tire doubled its
bagged pellet sales and pellets from the Trebio plant in Quebec are being sold at the
local Walmart. The growing demand for pellets in Yellowknife is helping to develop a
Arctic Energy Alliance. NWT Wood Pellet Study, September 2009. Retrieved from: http://aea.nt.ca/
research/research-2
24
AGA. Inuvik Wood Pellet Infrastructure Study, 2012. Retrieved from: http://aea.nt.ca/blog/2013/03/
inuvik-biomass-infrastructure-study
25
39
local market for Canadian pellet producers and aiding those manufacturers that may
bestruggling because of their distance to major markets. Much of the demand for
pellets in the NWT is met by pellet mills in Alberta and British Columbia: La Crete,
Pinnacle and Premium Pellet. There are currently plans to build a pellet mill in the
SouthSlave Lake region, supplied by local fiber.
The NWT 2013 Energy Action Plan reported that it intends to expand use of biomass
in the NWT in 201316. It will commit a total of $8.8 million to strategic biomass
investments, funding for biomass projects and biomass promotion, community
engagement and project evaluation. This includes $1.4 million from the Federal
Government in 201314 and $0.9 million by the Government of NWT to maintain
sustainable forest resources and encourage commercial development in the forest
sector.26 As part of this work, the NWT government and its partners are also seeking
to provide economic opportunities for Aboriginal communities by expanding activity
level within the forest sector. Over the next few years, substantial growth in biomass
heating in both the residential and large-scale industrial sectors throughout NWT can
be expected. In addition, the use of biomass (e.g. pellets) for CHP projects in smaller,
remote and primarily Aboriginal communities that rely on diesel generators can
reducetheir reliance on heavy fuel oil and achieve even greater energy savings.
5.1.3 Quebec
There are 11 known community bioenergy projects in operation in Quebec and
another 28 in various stages of planning and development in 2012. This leaves
Quebec with great potential for growth in this sector. One of the first biomass
community-heating systems in Canada was built in 1991 in a Cree First Nations
Community, Ouj-Bougoumou. The system delivers heat through a system of
heatingpipes and energy transfer stations to 140 homes and 20 public buildings
inthecommunity. The system has led to a 200 tonne reduction in CO2 emissions.
In2011, Quebec built one of the largest bio-heat systems in Canada, La Cit Verte in
Quebec City, that was also the first large system in the middle of a major urban center.
The Green City is a 5MW Green community in the heart of Quebec City generating
bioenergy for a residential complex with 840 units.
The Qubec Federation of Forestry Cooperatives provided the latest update on Quebec
biomass projects under development for the 2012 Canadian Bioenergy Data Survey.
In January of 2013, the Cooprative forestire de La Matapdia reported that 11 of its
community projects had been accepted, seven projects were under consideration by
the proponent for the Office of Energy Efficiency and Innovation, and two projects
were waiting on funding for feasibility studies.27
GNWT. Energy Strategy, 2013. Retrieved from: http://www.iti.gov.nt.ca/sites/default/files/

nwt_energy_action_plan_december2013.pdf
26
Cooprative forestire de La Matapdia. Bois nergie Matapdia Laboratoire rural

20082013 prsentation. Retrieved from: http://cldnb.com/upload/cldnb/editor/asset/SM3/
Journee_ruralite_Cooperative_forestiere_Matapedia_2013-04-26.pdf
27
40
Quebec has three different initiatives aimed at maintaining the value of its forests: a
Forest Biomass Action Plan (2008), the Forest Biomass Allocation Program (200813),
and a Forest Sector Strategy (201217). Each is focused on diversifying the forest
industry and exploiting market opportunities to substitute forest biomass for fossil
fuels. In 2008, Quebec took an innovative approach to wood allocation that was unique
in Canada, allowing 17 regional economic development Boards, the CREs, to examine
bioenergy proposals and recommended five-year wood allocation contracts. Several
regions moved quickly to garner forest biomass for small community heating systems.
5.1.4 Prince Edward Island

With nine community-heating projects in 2013, PEI has been a pioneer in the use of
biomass to generate thermal energy to heat municipal buildings. In 2000, Charlottetown
housed one of the three oldest biomass energy systems in existence in Canada. The
current system in Charlottetown evolved from earlier projects. The Kings County
Memorial Hospital in Montague installed a Swede Stoker woodchip heating system that
produces 110 kW and provides heat to the hospital and local seniors home. The system
uses 1,600 tonnes of whole-tree chips per year, with a fuel oil back-up system. The district
energy system consists of a high efficiency wood boiler and cogeneration equipment
installed in 1997 that provides hot water and heat to 125 downtown buildings and
generates 1,200 kW of electricity used internally and sold to the power grid. The annual
wood fuel used is 62,000 tonnes.
Bio-heat has been a priority for PEI since 2008, when a report entitled Biomass Heat
on PEI: A Pathway Forward recommended the Government of PEI move towards
increasing bio-heat on the Island and suggested that biomass energy would be a positive
catalyst to reduce reliance on expensive heating oil and develop the Island economy and
communities while having numerous environmental benefits. In response, the province
developed an energy strategy to reduce dependence on fossil fuels and called for a
20% biomass component to the PEI energy mix by 2018. At the time, 10% of the energy
used in PEI was generated through biomass (including fuel wood, sawmill residue and
municipal waste).28 In PEI, financial incentives such as tax exemptions and low interest
loans for wood heating systems are being used to help increase the market for wood
and wood pellets. Environmental impacts are being mitigated through the development
of guidelines for biomass harvesting, which outlinesacceptable harvest practices for
bioenergy projects with public involvement.
In 2009, Wellington-based Atlantic Bioheat, a bioenergy company, led a successful
bio-heat furnace pilot demonstration project, which encouraged the PEI government
toannounce the replacement of more than 30 oil furnaces over the next five years. This
resulted in a request for proposals for 22 schools, four manors, three hospitals, and the
provincial correctional center. Contracts were awarded to two of the Islands leaders
in biomass heating and boiler installers. Atlantic Bio-Heat was awarded a contract
for two schools, a hospital and the Young Offenders Facility while Wood4Heating
Government of PEI. PEI Energy Strategy, 2008. Retrieved from: http://www.gov.pe.ca/photos/original/

env_snergystr.pdf
28
41
was awarded a contract for seven schools, a hospital, two seniors homes, and the
Provincial Correctional Centre in Charlottetown. Furthermore, Atlantic Bio-Heat formed
a PEI Bio Heat Investment Fund that will employ a community-oriented model of
financing to encourage Islanders to invest and cultivate PEIs green economy. Such
developments in PEI are paving the way for the expansion of biomass heat that will
provide opportunities for economic development and job creation while taking steps
toreducing GHG emissions.
42
6.0
Wood
Pellets
43
6.1 Canada and Beyond

The EU is currently the worlds largest pellet market, although small pellet markets
in Japan and Korea are expected to surge on new renewable energy targets. Driven
by renewable energy policies, the EU demand for pellets grew from 13 MT in 2011,
to an estimated 14.3 MT in 2012, to a projected 16 MT in 2013. The United States
Department of Agriculture projects EU demand for wood pellets as 17.1 MT in 2014
whileinternational energy consulting firm Pyry projects demand of 35 MT for the
whole of Europe by 2020. Despite growing EU pellet production from Germany
and Sweden, the EU will increasingly depend on imports, as domestic production
cannotkeep up with demand.
Table 6.1
European Demand for Wood Pellets29
EU Wood Pellet Consumption (000 T)ab
2011
2012e
2013e
2014e
Productiona
9,620
10,000
10,150
10,300
Net Importsb
3,158
4,400
5,880
6,840
To inventory
222
-100
-30
-40
13,000
14,300
16,000
17,100
Consumptiona
2020c
35,000
The European Biomass Association (AEBIOM), (b)USDA Foreign Agricultural Service, (c)Pyry
(a)
Spurred by growing pellet markets worldwide, Canadian pellet producers increased

the number of plants from 33 in 2010 to 39 in 2012. This increased capacity by almost
1.3MT to reach 3.4 MT by 2012. Although long-term pellet demand is expected to
remain strong, short-term disruptions can affect the market for Canadian exports.
For example, in 2013 GDF Suez, a French power producer, decided not to convert its
Rugeley power station in the UK from coal to biomass. There were delays in EONs
Ironbridge project and delays by the Dutch government on new biomass policy. With
international developments such as these and a slow-growing domestic market,
Canadian capacity actually fell in 2013, as three smaller plants closed due to market
conditions for a net loss of 82,000 tonnes.
29 a,b,c
Retrieved from: Poyry Austria Presentation Jan 2012.
44
Table 6.2
Canada Wood Pellet Capacity (tonnes)
Capacity
2010
2011
2012
2013
2,089,499
2,987,640
3,372,000
3,290,000
898,141
384,360
-82,000
33
39
39
37
Change
Plants
Canadian pellet business is dominated by BC, with over 2 MT in capacity in 2013, 61% of
Canadas overall capacity. Quebec is second with 625,000 tonnes capacity, while New
Brunswick ranks third at 202,000 tonnes. Ontario was not on the pellet map in 2011, but
with the opening of Canadian Biofuels plant, Ontario has increased its presence. Rentech
anticipates having its 450,000 tonne plant in Wawa Ontario in production by the fall
of 2014 with its first delivery to Drax, a large utility in the UK from the Port of Quebec.
The Port has undergone significant infrastructure improvements in 2013 to ensure the
necessary storage and loading facilities are in place for efficient delivery to partners. The
port in Quebec City is the largest bulk pellet terminal in Eastern Canada. Rentech will also
start-up a 125,000 tonne plant in Atikokan, Ontario. Manitoba and Saskatchewan came
onthe pellet map in 2012 and 2013, while Newfoundland put one plant on hold in 2013.
Table 6.3
Pellet Capacity by Province (tonnes)
2011
2012
2013
BC
1,882,640
2,097,000
2,017,000
61.3%
QC
600,000
625,000
625,000
19.0%
NB
142,000
182,000
202,000
6.1%
NS
150,000
160,000
168,000
5.1%
AB
135,000
145,000
150,000
4.6%
ON
15,000
95,000
80,000
2.9%
SK
15,000
0.5%
NL
63,000
63,000
13,000
0.4%
MB
5,000
5,000
0.2%
2,987,640
3,372,000
3,290,000
Total
45
Not only does BC dominate in pellet capacity, it also has the largest plants with
the average size of about 180,000 tonnes, more than twice the average of plants in
Quebec, and more than three times the size in Alberta and New Brunswick. Plants
in Saskatchewan and Manitoba, far from ports, are meant to supply local markets
and are thus small, while BC plants were built for large export markets. Larger plants
are coming to Ontario with the 2014 start-up of the Wawa plant, and Quebec where
GreatWestern Forestry/Atlantic Fiber Resources are ready to build a 250,000 tonne
plant in Chandler, Quebec.
Table 6.4
Average Size of Plant 2013
Average
BC
11
183,364
QC
69,444
NS
56,000
NB
50,500
AB
50,000
ON
26,667
SK/MB
20,000
NL
6,500
To remain viable, capacity increases for plants must be matched by production increases
driven by market demand. In Canada, overall production rose by 236,099tonnes in
2012, or 10.5%, to 2.5 MT. Many plants ramped up production, including four in BC,
three in Quebec, and one in Ontario. However, due to unsteady markets in 2013, pellet
production actually declined driven by closures of uncompetitive plants in BC, Ontario
and Newfoundland, and by significant reductions in production at five plants inBC,
Quebec,Alberta, Newfoundland and Ontario.
46
Table 6.5
Pellet Production by Province (tonnes)
2011
2012
2013
BC
1,702,740
1,751,506
1,713,900
QC
273,729
382,000
391,000
NB
138,000
141,000
159,000
NS
25,000
25,062
60,011
AB
78,000
88,000
83,000
ON
16,000
77,000
44,000
SK
2,000
NL
14,000
14,000
500
MB
5,000
2,247,469
2,483,568
2,453,411
236,099
-30,157
Total
Change
Capacity utilization is an indicator of pellet plant health measured by production as a

percent of capacity. BC has the highest capacity utilization at 85% because of world-class
pellet plant and well-established, efficient infrastructure including tailored ports and rail
to accommodate pellet handling. New Brunswick plants, near ocean ports, are making
inroads into European markets and have the second highest capacity utilization at 78.7%.
47
Table 6.6
2013 Capacity Utilization by Province (tonnes)
Capacity
Production
BC
2,017,000
1,713,900
85.0%
QC
625,000
391,000
62.6%
NB
202,000
159,000
78.7%
NS
168,000
60,011
35.7%
AB
150,000
83,000
55.3%
ON
80,000
44,000
55.0%
SK
15,000
2,000
13.3%
NL
13,000
500
3.8%
MB
5,000
0.0%
3,275,000
2,453,411
74.9%
Total
Quebec lost most of its New England market to large pellet plants in the US South.
With a growing but limited local market, Quebec plants struggle to achieve the
competitiveness needed to sustain themselves in EU industrial markets. Quebec
capacity utilization was 63% by the end of 2013, but plants are successfully entering
high-end markets in Italy. Interior provinces Alberta, Ontario and Saskatchewan have
lower capacity utilization. Nova Scotia capacity utilization appears low, but it will
improve with the Scotia Atlantic plant coming on stream. Nationally, plants are at 75%
capacity utilization.
48
6.2 Pellet Exports

In Canada, the domestic pellet market is small, but growing. Canadian pellet producers
are currently building capacity to supply large offshore markets. In 2013, 94% of pellet
producers reported on whether or not they exported. Canada exported close to two MT,
or 86%, of production. In BC, world scale plants produce primarily industrial grade pellets
for offshore markets, with 96% of production exported. There is growing demand from
European residential heating markets. Similarly, NewBrunswick focuses on exports,
with 78% of production going offshore. The domestic market in Quebec uses only
122,350 tonnes of the provinces 625,000 tonnes capacity. The rest is available for
foreign markets but less than half of that is actually exported, because of soft markets
and a lack of cost competitiveness. Similarly Ontariohas been unable to export is
available capacity because of immature supply chains30. This will change with Rentechs
Wawa plant, which reorganized its supply chainfromAtikokan/Wawa to Quebec for
efficiency and cost effectiveness.
Table 6.7
2013 Pellet Exports
Domestic
Exports
% Exports
BC
56,368
1,549,532
96%
QC
122,350
233,650
66%
NB
34,200
124,800
78%
AB
48,500
34,500
42%
NS
31,511
28,500
47%
ON
17,000
27,000
61%
SK
2,000
0%
NL
500
0%
312,429
1,997,982
86%
Total
IEA Task 40. Low Cost Long Distance Biomass Supply Chains 2013. Retrieved from:
http://www.bioenergytrade.org/downloads/t40-low-cost-long-distance-biomass-supply-chains.pdf
30
49
Not all survey participants reported the country of export, but approximately
200,000tonnes of pellets were destined for the consumer bag market in Italy, where
prices are much higher than the European utility market but the quality of the pellet
must be correspondingly better as well. In 2013, 1.6 MT of pellets were reportedly
exported to Europe, mostly to the utility market in the UK. However, with the EU
market being supplied increasingly by the U.S. South, BC has grown its market in
Asia amounting to an estimated 155,683 tonnes exported in 2013. The US market
forCanadian pellets was 108,700 tonnes in 2013.
Figure 6.1
Pellet Export Destination 2013
155,683
108,700
201,150
Italy Bag
Europe Bulk
Asia
US
1,629,359
With large, world-class pellet plants and streamlined supply chains, BC exports the bulk
of its production to European utilities, with a substantial amount now going to Asia.
More than half of Albertas exports are to the US with some going to Europe and Asia,
but Alberta firms mostly supply the domestic market. Ontarios four current operational
plants are too small and inefficient and the supply chains are not yet sufficiently
optimized to compete in the European bulk market, but they have turned successfully
to Italy, supplying 61% of production to the residential heating market. Quebec also
appears to be targeting its EU exports for the bag marketin Italy, but also participates
successfully in the US. New Brunswick plants report 22% going to domestic buyers,
with the remainder going to Europe, but not all plants specified whether they were in
the Italian market. Canadian pellet producers must continue to follow any certification
restrictions that could restrict these markets in the future.
50
Table 6.8
Pellet Exports by Province
EU-Bulk
Italy-Bag
Asia
US
Domestic
BC
82%
3%
9%
2%
5%
AB
10%
0%
10%
22%
58%
SK
0%
0%
0%
0%
100%
ON
0%
61%
0%
0%
39%
QC
19%
30%
0%
14%
38%
NB
75%
0%
0%
3%
22%
NS
47%
0%
0%
0%
53%
NL
0%
0%
0%
0%
100%
For Canadian pellet producers, the UK is currently the largest market due to government
support of biomass heat and power. Previously Canada had exported largeamounts of
pellets to the Netherlands, Belgium and Sweden. The demand for Canadian biomass
should continue to increase with Englands most recent developments involving a
10MT rise in demand from the Drax and Eggborough power stations. If Canadas pellet
producers want to compete with the US Southeast, they must increase capacity to
develop economies of scale and develop cost-efficient supplychains.
6.3 Pellet Feedstocks

Over the last decade, Canadian sawmills have suffered considerably following the
financial crisis in the US, a worldwide economic downturn, a collapse in US housing starts,
and subsequent decline in the demand for Canadian lumber. Canadian lumber production
peaked in 2004 as a result of an over-heated US housing market supported by sub-prime
mortgages, and production had fallen 50% by 2009. Small and inefficient sawmills were
forced to shut down, many permanently. This development also reduced the volume of
mill residues such as sawdust and shavings that had been used as feedstock for pellets.
BC, with the most to lose, began looking to Asian markets to sell lumber and their lumber
production increased accordingly, also increasing mill residue availability. Since 2009,
there has been a slow but steady resurgence in the US housing market. In 2012, Canada
produced 54.5 million m3 of softwood lumber, up 5% from 2011. BC and Quebec are the
top softwood producingprovinces.
51
Figure 6.2
Sawmill Lumber Production, 2003201231
900
800
Millions of
cubic metres
700
600
500
400
300
200
100
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Year
Canada
All other provinces
Qubec
Ontario
Alberta
British Columbia
Note(s): The category all other provinces refers to Newfoundland and Labrador, Prince Edward Island,
Nova Scotia, New Brunswick, Manitoba and Saskatchewan combined. While there was lumber production
in 2012 for Ontario and all other provinces, the data are not publishable because of confidentiality.
Although, this increase in lumber production is expected to continue thanks to the

improvements in housing markets and demand from China, this growth does not
necessarily imply sufficient new surpluses of mill residues for pellet manufacturers. This
is especially true in Ontario and Quebec where the lumber business has not recovered
to the same extent as in BC. Also, available mill residues are increasingly utilized by
existing sawmill operators and are traditionally utilized in the pulp and paper sector
to produce onsite energy, or sold to IPPs, board manufacturers, farmers for animal
bedding, and landscapers for garden beds. In BC, the imminent shut down and phase
out of all remaining wood residue burners in the province by the end of December
2016 is providing incentive for the use of these wood residues for biofuel and energy
production. More importantly, in BC the pellet industry has gone to the forest itself
to secure needed fibre from harvest residues. British Columbia has an advantage in
Statistics Canada. Manufacturing at a glance: The Canadian lumber industry, 2003to2012.

Retrievedfrom: http://www.statcan.gc.ca/daily-quotidien/131112/dq131112a-eng.htm
31
52
that2540% of each tree harvested is left at the roadside as harvest residue due to the
damage caused by mountain pine beetle, leaving a considerable amount of whitewood
which could be utilized for pellet production for feedstock. BC has an advantage over
eastern provinces in that MPB damaged wood causes unwanted bark to fall off of
harvest residue wood leaving better quality whitewood feedstock.
The participation of Canadian pellet manufacturers in the survey has led to a better
understanding of the type of feedstocks used, how much, the origin and how far they
are travelling to supply their production and demand. In BC, 59%of feedstock is still
residue from mills,but 22% is chipped logs and 9% isharvest residue from the forest.
Nationwide, mill residues account for 79%of feedstocks used in pellet production
and harvest residues made up 5%. Only BC uses harvest residues. In Eastern Canada
harvest residues are only 1012% of each tree and contain considerable bark, not the
best feedstock for pellets. Both New Brunswick and Ontario have been forced to use
expensive logs and chips to fill feedstock needs.
Figure 6.3
Source of Feedstock for BC Wood Pellets,2013
1% 1%
9%
22%
Bush Residual
Mill Residues
Hog Fuel
Logs (Pulp, MPB,
Other SW)
9%
59%
Waste Wood
Chips
53
Table 6.9
Pellet Feedstocks by Province (tonnes)
Harvest
Residues
Mill
Residues
Hog Fuel
Logs
Wood
Waste
Chips
Total
BC
173,750
1,185,500
174,000
435,750
22,000
1,991,000
AB
50,500
12,500
63,000
SK
2,000
2,000
ON
943,000
2,000
945,000
QC
386,000
386,000
NB
159,000
10,000
169,000
NL
500
500
NS
280,011
280,011
173,750
3,006,511
174,000
445,750
24,000
12,500
3,836,511
5%
78%
5%
12%
1%
0.3%
100%
Total
%
6.4. Employment
Out of the 39 operating plants, 38 reported actual direct full-time employment,
totaling620. There are eight plants under construction that will contribute an
additional200 direct jobs, thus resulting in a total of 820 overall once these
plantsarecompleted.
54
Table 6.10
Direct Jobs in Pellet Plants by Province 2013
Province
Operational
U. Construction
BC
315
37
AB
19
MB
SK
ON
43
QC
136
44
NB
50
20
NS
49
99
PEI
N/A
N/A
NL
N/A
N/A
Total
620
200
The actual socio-economic benefit of the above jobs is substantial. These jobs are
not in cities where the 5060 jobs per plant would be negligible but in small forest
communities. Many of them suffered from the decline in the forest products industry
in recent years and the job impact of the plant is often sufficient to ensure ongoing
survival of the community.
55
56
7.0
Torrefied
Wood
(Pellets)
There are several technologies that produce advanced biomass fuels
with coal like properties. Steam explosion and torrefaction are the two
main processes to create a wood fuel with increased energy density,
improved material handling properties and hydrophobicity. In Canada,
the most development work has been done in torrefaction, which is a
controlled carbonization process.
57
asting
ant
asthe
3
Biomass is heated with minimal to low oxygen to a temperature of approximately
250350C so that all moisture is removed, similar to roasting coffee beans, resulting
in a black char-like substance. There are significant advantages to torrefaction in
comparison to conventional wood pellets as the process results in a greater energy
content per unit volume and mass.32
There is increasing interest in torrefied biomass due to its multiple benefitsit is up to
40% more energy dense than non-torrefied biomass, it is hydrophobic and thus can be
stored and handled in outdoor conditions, it can result in lower transportation costs,
and it is comparable with coal in its heating value, grindability, and bulk energy density.
When used in a combustion application, torrefied biomass is referred to as bio-coal, or
torrefied pellets if densified. These characteristics have significant advantages in the
supply chain making logistics simpler and more cost effective. Further, it has various
applications for heat and power involving small to medium scale biomass plants and
pellet burners. It can also be co-fired with coal in pulverized coal fired power plants
and cement kilns in the coke and steel industry and in gasification processes that
wouldnormally operate on pulverized coal.
AIREX Energy is a Quebec based company that is a world leader in the manufacturing of bio-coal
production equipment. Airex has operated a pilot plant in Laval using the CarbonFX process since
March 2011. In February 2013 Airex announced that it had received $2.7 million in funding support
from the Government of Canada and SDTC for the construction of a 2 tonnes per hour biomass
torrefaction demonstration plant near Montreal
Several initiatives have been ongoing at the R&D and commercialization stages
involving research institutes, universities, and industry to assess the torrefied product
durability to withstand large-scale handling and the risks associated with dust. In
Canada, much research work has been done at the University of British Columbia,
at CanmetENERGY in the Innovation in Energy Technology Sector of NRCan, and
at the Montreal-based Centre for Energy Advancement through Technological
Innovation. Studies have also been commissioned by the Wood Pellet Association
of Canada, NRCan and the BC Bioenergy Network to gain a better understanding of
the role torrefaction could play in the production and use of advanced solid biofuel
throughoutvarious Canadian sectors. The leading global companies working on the
development and commercialization of advanced biomass fuels are Zilkha in the
UnitedStates, Arbaflame in Norway, Topell in the Netherlands and Andritz in Austria.
The market for torrefied products has not developed as quickly as anticipated in Europe.
By 2011, producers claimed they were production ready but this turned out to be an
overstatement. Some European power plants undertook test burns of torrefied pellets
some test burns went well but others were unsuccessful as some torrefied pellets
did not act like coal as promised. Furthermore, power plants wanted to run tests of
10,000tonnes before supplying off-take agreements, but no torrefied wood plant could
produce quantities close to that. Faced with pending renewable energy targets, many
European power producers chose to make the infrastructure investments necessary
to combust wood pellets instead of going with a product that is not yet produced at
commercial levels. Industry expert Pyry has suggested that a torrefied wood market in
Europe is a couple of years away, and Asia may be the better prospect for early markets.
IEA. Bioenergy Task 32 Report; Status Overview of Torrefaction Technology, 2012. Retrieved from:
http://www.ieabcc.nl/publications/IEA_Bioenergy_T32_Torrefaction_review.pdf
32
58
8.0
Greenhouses
The 20122013 data surveys sought information from provincial organizations
and industry professionals, but data was often difficult to obtain because of
member confidentiality, and in many cases was simply not known or tracked.
Government databases on energy use by greenhouses have not been updated
and recent public and private reports are dated. One exception is a 2013
report by the Government of Alberta titled, The Economics of Production
andMarketing of Greenhouse Crops in Alberta.
59
The lack of available data on greenhouses has made it difficult to accurately report
on the status of bioenergy systems in greenhouses. Successive data surveys have
uncovered data on 52 operating greenhouses with biomass energy systems, 37 of
which are currently using biomass for energy, and six that are in planning stages.
While many greenhouses in BC use natural gas, 14 were known to use biomass
in 2008. That grew to 20 by 2013. In Ontario, 14 growers are known to be using
biomass,with five anticipated to come online by 2014. Alberta was reported
to havenine growers using wood for fuel. There are three each in Quebec and
Manitobaand one in New Brunswick and Nova Scotia.
The use of biomass for heat in greenhouses can be an economical solution for
reducingfuel costs by replacing oil and natural gas with a renewable and local fuel
source. Biomass heat and power is an increasingly attractive option for greenhouse
growers as increasing oil prices, carbon taxes, and emissions targets are becoming
more prominent considerations across Canada. However, this industry is influenced by
specific regional characteristics, such as regulations, accessibility, availability and the
cost of alternative energies such as oil or natural gas.
A 2006 report by Resource Efficient Agricultural Production analyzed agri-fuel potential
for the Canadian greenhouse industry. The report stated that 2,545 Canadian greenhouses
could reduce annual fuel costs between 33%60% by switching to agricultural and woody
biomass fuels, saving greenhouse producers up to $200 million annually.33 In Canada,
approximately 90% of the total greenhouse area and sales exist in three regions: British
Columbia, Ontario and Quebec.
British Columbia
In 2012, the BC Greenhouse Growers Association reported that in the early 2000s,
manyof BCs greenhouses installed biomass boilers, as there was a considerable
availability of feedstock such as wood pellets, sawdust and hog fuel.34 More recently,
a BC carbon tax added to the cost of non-renewables such as oil and natural gas.
However, the BC government provided rebates on natural gas for greenhouse growers
until 2012 due to the added benefit of natural gas contributing to greenhouse
productivity. Carbon dioxide (CO2) is easily captured from natural gas and can be
released back into the greenhouses to improve yields, whereas CO2 is not easily
recovered from biomass. As such, some growers prefer to burn natural gas during
the summer. Some greenhouses use propane for CO2 production. However, there is
emerging technology that will extract the CO2 from flue gases of biomass boilers.
If this technology becomes affordable, the use of biomass could become a more
viableoption.
REAP Bioheat Report. Biomass Resource Options: Creating a BIOHEAT Supply for the Canadian
Greenhouse Industry, July 2006. Retrieved from: http://www.reap-canada.com/online_library/
feedstock_biomass/Biomass%20Resource%20Options%20Creating%20a%20BIOHEAT%20Supply%20
...%20(Bailey%20et%20al.,%202006).pdf
33
Personal communications, BC Greenhouse Growers Association, L. Delli Santi. September 2012.
34
60
Natural gas, where available, remains the more attractive option for BC greenhouses.
In the province, greenhouses are a half-billion-dollar-a-year industry and in 2012, the
provincial government provided high-tech greenhouse vegetable and floriculture
growers with $7.6 million in carbon tax relief. In 2013, a permanent carbon tax relief
grant program was announced in recognition of the impact of the carbon tax on the
natural gas and propane that commercial growers use for heating and CO2 production.
The grant program was set at 80% of the carbon tax paid on natural gas and propane,
thus giving less incentive to switch from natural gas to biomass. The BC Government
reported that the industry employs approximately 6,700 people in 550 greenhouses,
and that the carbon tax represents 12% of GH operating costs.35 The price of natural
gas fell through 2013, and several growers may have switched back to natural gas,
though at least ten of the known 20 growers were still using biomass for heat.36
Alberta
In Alberta, there are 328 growers with a total greenhouse area of 1.3 million m2,
yet there was little known movement toward bioenergy systems in 2012. A survey
completed by the Government of Alberta in August of 2013 revealed that natural
gas burners heat approximately 80% of the greenhouses in southern Alberta, while
greenhouses in northern Alberta are equipped with natural gas boilers and hot water
pipes for heating. Over the last four to six years, almost a dozen greenhouse operations
have either completely switched to using coal or added coal fired furnaces to reduce
natural gas costs.37 The 2013 survey referenced the Government of Albertas 2010
report on the Profile of the Greenhouse Industry in Alberta, which reported that 2%
(nine operations) used wood for fuel.38 Switching to biofuels, biogas, and biomass
sources may be possible if these become widely available and more cost effective,
ascapital costs remain high.
Ontario
According to the Ontario Greenhouse Vegetable Growers (OGVG) there are 223 vegetable
and 400 flower operations, making Ontario the largest greenhouse producer in Canada.
The OGVG established an Energy and Environment Committee to focus on energy
issues and pursue developing alternative sources to reduce energy expenses, which
are greater than 40% of production costs. Many greenhouses located in southwestern
Ontario use natural gas for heating. Up to 25 growers use biomass, but this number
Government of British Columbia. (2014) Ministry of Agriculture, news release Permanent carbon
taxrelief for BCs greenhouse growers, April 2013. Retrieved from: http://www.agf.gov.bc.ca/ministry/
AgScPolicy/2013AGRI0024-000766.pdf
35
Confidential personal communications, Nov 2013.
36
Government of Alberta. Report on The Economics of Production and Marketing of Greenhouse Crops
in Alberta, August 2013. Retrieved from: http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/
all/agdex4369/$file/821-59.pdf?OpenElement
37
Government of Alberta, 2013 Report. Retrieved from: http://www1.agric.gov.ab.ca/$department/

deptdocs.nsf/all/agdex4369/$file/821-59.pdf?OpenElement
38
61
varies by year depending on conventional fuel costs and whether long-term biomass
supply contracts have been established.39 Smaller greenhouses in remote areas are likely
to use biomass, including crop milling residues, switchgrass and wood pellets. Resource
Efficient Agricultural Production Canada in 2006 reported that Ontario producers could
reduce annual fuels costs 4164% from natural gas and heating oil costs if they switched
to biomass heating.40
Quebec
In Quebec, Le Syndicat des producteurs en Serre du Quebec partnered with the
Ministry of Agriculture, Fisheries and Food, and the Greenhouse Research Centre
with funding sourced from the Energy Efficiency Agency to establish and showcase
a project on wood heating in a Quebec greenhouse.41 A result of this project was the
installation of a biomass heating system in Saint-Joachim-de-Courval at Les Serres
Verriers where there are 12 year-round vegetable greenhouses. Another operating
system is in Sainte-Clotilde-de-Chateauguay, where Les Serres Lefort Inc. uses
woodchips in their system to heat a 6.5-hectare hot water distribution system.
Personal communications, Dr. S. Khosla, OMFRA. September 2012.
39
REAP 2006, Bioheat Report. Retrieved from: http://www.reap-canada.com/online_library/

feedstock_biomass/Biomass%20Resource%20Options%20Creating%20a%20BIOHEAT%20Supply%20
...%20(Bailey%20et%20al.,%202006).pdf
40
Le Syndicat des producteurs en Serre du Qubec. (2014) Vitrine Biomasse. Retrieved from:
http://www.spsq.info/vitrine-biomasse,4,41
41
62
9.0
Liquid
Biofuels
In 2006, the federal government announced its intent to develop
renewable fuel regulations requiring annual renewable content of 5%
ethanol by volume in all gasoline for ground transportation by 2010,
and 2% biodiesel for ground transportation and heating by 2012.
63
In support of this renewable biofuel mandate, the federal government implemented

several biofuel initiatives and incentive programs including ecoENERGY for Biofuels
offering incentives to producers based on production, and Sustainable Development
Technology Canadas (SDTC) NextGen Biofuels Fund providing up to 40% of
capital costs for large demo projects. These programs helped to build capacity,
realize blending rates, and establish biofuel self-sufficiency in Canada. Several of
these programs expired as of March 31st, 2011. Along with the federal mandate
many provincialgovernments have implemented equivalent or higher mandates
forrenewablefuel content.
Table 9.1
Provincial Renewable Fuel Standards
Province
Mandate
Incentive
Date Est.
British
Columbia
5% Ethanol by 2010
14.5/l for ethanol
Jan 2012
5% Biodiesel by 2010 &

4%from 2011 onward
0.09/l for biodiesel, tax

exemption (BC fuel only)
5% Ethanol
9/l tax exemption, producer

incentive (ABfuelonly)
April 2011
7.5% Ethanol in Gas
15/l for ethanol
Jan 2007
2% Biodiesel
13/l for biodiesel, tax

exemption (SK fuel only)
July 2012
8.5% Ethanol
20/l 2008-09, 15/l 201012,

10/l 201012
Jan 2008
2% Biodiesel
15/l producer credit 201012

(MB fuel only)
Nov 2009
5% Ethanol in gas 2007
20/l producer incentive
Jan 2007
Alberta
2% Biodiesel
Saskatchewan
Manitoba
Ontario
May 2013 announcement to repeal existing biodiesel

taxexemption
Quebec
5% Ethanol by 2012
Prince Edward
Island
RFS to be announced
by2013
RFS will be doubled by 2018
(5% Ethanol by 2013

10% Biodiesel by 2013)
64
Apr 2014
2008
However, varying provincial incentives have created inconsistencies in the threshold levels,
timeframes and feedstocks that could possibly create barriers and hinder intra-provincial
biofuel trade. Four provinces instituted biofuel mandates in anticipation of the federal
announcement in 2010. Eight ethanol plants were already in operation by 2007 and five
facilities came online in 2008, but only two new plants have come online every other
yearsince.
In December 2010, the Canadian Renewable Fuels Association reported that across
thecountry, Canada blended an average of 5% ethanol into the gasoline pool. As of
July, 2011, Canada blended an average of 2% renewable content into the distillate pool.42
The Canadian Bioenergy Data Study of 2011 had considerable success reaching 90% of
producers of both ethanol and biodiesel. The following sections will discuss how this
sector has evolved over the last three years and the emerging trends ahead.
9.1 Ethanol
Ethanol production capacity increased from 411 Ml in 2005 to 1,735 Ml in 2008, with
five new plants coming on stream in 2008. The 200911 period was characterized by
only small increases in capacity, partly due to government programs ending, and partly
increased questioning of the environmental benefits of 1st generation ethanol. For
example, growing grain as a feedstock to produce ethanol relies heavily on synthetic
fertilizers and chemicals. This uses large quantities of fossil fuels in their production,43
and clouds the net energy balance of ethanol use. In 2012, expansions at GreenField
Ethanol Johnstown and Suncor St. Clair boosted Canadian capacity to 1,880 Ml p.a. In
2013, capacity dropped partly due to Amaizeingly Green going into receivership. One
of the drivers for closure was the high cost of corn. The company now has a new owner
who is focusing on the primary business of fertilizer. Capacity of 1st generation ethanol
will grow by 190 Ml in 2014 when two plants currently being commissioned come on
streamCR Fuels and Growing Power Hairy Hill, both in Alberta.
CRFA. (2013) Industry Information. Retrieved from: http://www.greenfuels.org/en/

industry-information.aspx
42
Saskatchewan Eco Network. (2013) Environmental Sustainability. Retrieved from:

http://econet.ca/issues/ethanol/environmental.html
43
65
Figure 9.1
1st Generation Ethanol Capacity
2500
2116
2000
1735
1760
1760
1880
1880
1826
1500
865
1000
500
236
281
281
1020
411
0
198998 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
In Canada, there were 14 operating 1st generation ethanol plants in 2013, and
12reported production for the survey. Most plants were running at full capacity.
Actualcapacity in 2013 was 1,826 Ml. Suncor had production of 413 Ml in 2012.
Table 9.2
1st Generation Ethanol Capacity and Production in 2013
Plants
Capacity
Production
AB
45
45
SK
344
330
MB
140
148
ON (less Suncor)
742
721
12
1,271
1244
ON Suncor
400
N/A
QC
155
N/A
14
1826
Subtotal
Total
66
Enerkem
In 2003, Enerkem began with a lab and pilot plant testing 25 different feedstocks to
produce methanol and ethanol in Sherbrooke Quebec. Their five Ml demonstration
plant in Westbury Quebec employs a syngas module that uses treated wood as
feedstock from a nearby sawmill that recycles used telephone poles. The Westbury
facility was commissioned and has been producing syngas since 2009, bio-methanol
since 2011, and ethanol by 2012. Enerkems most recent joint ventures with the City of
Edmonton and GreenField Specialty Alcohols are unveiling the great potential for the
continual advancement of biofuel production in Canada. A 35 Ml waste to biofuels
facility in Edmonton was commissioned in 2013. It is scheduled to produce methanol
in early 2014 and will follow with ethanol by early 2015. A second 35 ML cellulosic
ethanol plant in Varennes Quebec, a joint venture between Enerkem and Greenfield
Ethanol, is currently under development and will be in production by 2016.
Since 2011, ethanol capacity has been influenced by the industrys struggle to deal with
the food versus fuel debate and high corn prices. In 2012, the EU proposed the use of
food-based biofuels be limited to 5% as part of the 10% renewable energy target of the
Renewable Energy Directive. Such issues are motivating new producers to switch to
non-food cellulosic and lingo-cellulosic feedstocks. There has been a noticeable shift in
interest in Canada to utilize more advanced 2nd generation or cellulosic biomass options
including forest biomass and other lingo-cellulosic materials. However, many ofthe
advanced cellulosic technologies are largely in pre-commercial phases, in particular
woody biomass based applications.
Canadian companies like Lignol and Enerkem, have been developing bio-refining
technologies to produce liquid fuels from a wide variety of (non-food grade) cellulosic
biomass feedstocks since 2009: Lignol ceased operations of its Burnaby BC pilot in late
2014 due to difficulties in raising necessary financing for its first full scale commercial
plant. Enerkem, a municipal waste based application has a pilot in Sherbrooke and
a demo plant in Westbury, Quebec. In 2013, three new facilities started up: Atlantec
Bioenergy started a pilot in PEI; Woodland Biofuels started a pilot in Sarnia Ontario,
and Ferme Oliviere Lapin started a demo in St Alexia Quebec. The first commercial
scale 2nd generation ethanol plants will begin operations in 2014Enerkems plant in
Edmonton and the Enerkem/GreenField partnership in Varennes Quebec.
67
Table 9.3
2nd Generation Ethanol Capacity
2011
2012
2013
201416
1.5
1.5
2.8
2.8
Commercial/Demo (Ml)
17
93
# Pilots
# Commercial/Demo
Pilot (Ml)
Another R&D ethanol facility to have come online over the last year is Atlantec Bioenergy
in Cornwall PEI. This facility was part of a SDTC project in 2011 in support of the R&D of
technology to produce ethanol from energy (sugar) beets. The 300,000 litre per year
plant was commissioned in 20122013, produced approximately 60,000 litres and is
expected to ramp up to full production in 2014. Aside from sugar beets being a non-food
product, using sugar beets over corn to produce ethanol is beneficial since the starch
in the corn must be treated and heated to convert it into sugar before being fermented.
With sugar beets the sugar is extracted and goes straight to fermentation, making the
energy footprint extremely low compared to corn. Atlantec Bioenergy grows 50 acres
ofsugar beets in PEI to satisfy its R&D and production needs.
Another trend emerging within the ethanol sector is the integration of power capacity
because of cost savings involved in self-generating and the revenue potential in selling
green power. Four of Canadas ethanol companies want to maximize the use of local
feedstocks and process waste residues on site to generate power for internal operations
as a way to save energy costs and sell to the local utility.
To stimulate bioenergy development in Alberta, the government committed to
a NinePoint Bioenergy Plan in 2006 that included three grant programs: the
BioenergyProducer Credit Program, the Biorefining Commercialization and
Market Development Program, and the Bioenergy Infrastructure Development
Program. Twoofthese programs have provided funding support to several ethanol
companiesincluding Permolex and Enerkem Alberta Biofuels that are currently in
commissioning phases. In 2012, the sector had five other proposed 1st generation
ethanolplants that did not proceedfour in Alberta and one in Saskatchewan.
Employment numbers were collected by the survey for all ethanol producers across
Canada. A total of 876 workers are directly associated with the production of ethanol,
or an average of 38 full-time employees per plant. This does not include numerous
other jobs associated with the ethanol and feedstock and supply chain.
68
9.2 Biodiesel
Biodiesel is made from a variety of feedstocks. In Canada, canola is largely used among
western producers in Alberta and Saskatchewan, while recycled cooking oils, tallow
(animal fats) and yellow greases (rendered oils) are mainly used in Ontario and Quebec.
The proposed facilities in Alberta also plan to use canola as their primary feedstock.
Although canola may be abundant in Canada, it is a high-cost feedstock for biodiesel
because it is priced as food oil, which competes in international markets, while reused
oils and rendered fats are priced at industrial use levels. Rothsay Biodiesel, a rendering
company with six processing plants across Canada, collects widely available edible and
inedible animal by-products and oils from restaurants, grocery stores, butcher shops,
farms, and grocery stores, thus allowing them to recycle over 700 million kilograms of
waste materials each year.
In 2012, Canada consumed 28.1 billion litres (Bl) of diesel fuel of which 43%, was in
Ontario and Quebec. The mandate requiring 2% renewable fuel content in diesel fuel
and heating oil started up in 2011. By 2012 the renewable mandate would require 563Ml
of biodiesel. Newfoundland and Labrador and other Atlantic provinces along with
Quebec (60oN) were given exemptions from the first reporting period to give time to
install biodiesel blending infrastructure. A $159 million ecoABC Initiative providing up
to$25 million per project towards building or expanding biofuel production facilities
was extended to September of 2012, while the temporary exemptions were also
extended to June 30th, 2013.
Table 9.4
Consumption of Diesel in Canada44
2009
2010
2011
2012
ON & QC
11,169
11,751
12,423
12,017
Prairies
9,596
10,738
11,297
10,448
BC & North
3,106
3,444
3,493
3,550
Atlantic
2,139
2,434
2,817
2,121
26,010
28,368
30,030
28,137
567
601
563
Total
2%- Biodiesel
CAPP. Statistical Handbook: Canadian Demand for Motor Gasoline, 2012. Retrieved from:
http://www.capp.ca/library/statistics/handbook/pages/statisticalTables.aspx?sectionNo=6
44
69
In 2011, there were ten biodiesel plants in operation in Canada with a total capacity
of 235Ml. Eastman Bio-fuels shut down in 2012 and a fire at Speedway International
resulted in permanent closure of the plant. In 2013, the sector saw a 174% increase in
production capacity owing to two new biodiesel facilities coming online. Archer Daniels
Midland in Alberta became the largest biodiesel plant in the country with 265 Ml of
capacity, now capable of producing 41% of the biodiesel produced in Canada. Great
Lakes Biodiesel in Ontario added 170 Ml of capacity. Once fully up and running, these two
new facilities are capable of producing up to 68% of all biodiesel produced in Canada.
Table 9.5
Biodiesel Capacity 201113
2011
2012
2013
235
235
644
Production
97
149
149
Plants
10
10
Capacity
It has not been easy for biodiesel producers. Four companies attempting to get into
the biodiesel business over the last three years have shut down, repurposed their
business due to economic reasons or refocused on other markets such as canola oil.
The total production is 149 Ml, most of which was in Ontario and Quebec. The single
Saskatchewan plant is running at full capacity, while Quebec plants combined are
running at 90% capacity utilization. With Archer Daniels Midland and Great Lakes
Biodiesel coming on stream and total capacity reaching 644.3 Ml, domestic biodiesel
production has almost built up enough capacity to meet the current federal biodiesel
mandate. However, by the end of 2014 the temporary biofuel exemptions for Eastern
Canada and Quebec will be lifted, so there should be an increase in domestic demand
for biodiesel.
70
Table 9.6
Canada Biodiesel Capacity & Production by Region 2013
Installed
Capacity (Mml/y)
Production
(Mml/y)
Capacity
Utilization (%)
AB
265
0%
BC
51
11
22%
SK
20
20
100%
ON
247
63
26%
QC
61.3
55
90%
644.3
149
23%
Province
Total
In 201213, there were ten proposed biodiesel plants; seven in Alberta, two in Ontario,
and one in Quebec, totaling 1,357 Ml if all were built. One of the proposed plants
reported a capacity close to that of Archer Daniels Midland, and two others were
to have capacities of 300 Ml and higher. Similar to the number of proposed ethanol
plants, many of the proposed biodiesel facilities were granted funding through Albertas
Bioenergy Producer Credit Program aimed at encouraging investment in bioenergy
production capacity in Alberta to help meet required mandates and reduce reliance on
fossil fuels. However in October of 2011 funding for this program had run out resulting
in one Alberta company halting its plans, making it unclear as to when these proposed
facilities will move forward.
The United States Department of Agriculture Global Agricultural Information Network
(Gain) produced a report in July 2013 that estimated that Canadas consumption of
biodiesel at 713 Ml would increase to 721 Ml in 2014. With current biodiesel capacity at
644 Ml in Canada and with Eastern Canadian provinces including Quebec no longer
being exempted from the renewable fuels mandate, Canadas biodiesel capacity would
still not meet provincial and federal mandates and Canada would continue to rely on
imported biodiesel to ensure compliance.
71
Table 9.7
Estimated Biodiesel Consumption45
2012
2013
2014
Opening Stocks
185
49
93
Production
210
471
646
Imports
434
439
439
Exports
102
153
250
Consumption
678
713
721
Ending Stocks
49
93
207
Given that there are sizable facilities expected to be under development over the next
few years, import amounts should decrease in 201516. Of the ten operating biodiesel
plants in Canada, a large majority (seven companies) of the biodiesel produced is sold
to fuel blenders and distributors destined for US markets, while three producers focus
on supplying local retail markets including municipal and commercial trucking fleets.
In 2013, information on employment for all but three of the currently operating biodiesel
companies showed the industry directly employs approximately 220 people while there
are numerous other jobs created and maintained in the transport, logistics, technical and
administrative areas related to biodiesel production.
9.3 Pyrolysis Oil

9.3.1 Description
Pyrolysis oil is a dark-brown, free-flowing liquid made from plant material by a process
called fast pyrolysis, whereby biomass particles are rapidly heated to ~500C in the
absence of oxygen, vaporized, and condensed into pyrolysis oil liquid, also known
as bio-oil. The process typically yields 6572% liquid bio-oil, 1520% char (a black
charcoal-like powder) and 1218% non-condensable gases. Pyrolysis oil is not an oil
like petroleum because it is composed of hundreds of different chemicals including
acids, and is about 25% water. The density is approximately 1.2 t/m3, and the heating
value is 1619 GJ/t. It contains only traces of sulfur and therefore does notproduce
significant SO2 emissions during combustion, while producing about half the
USDA. GAIN Report, Biofuels Canada, 2013. Retrieved from: http://gain.fas.usda.gov/Recent%20

GAIN%20Publications/Biofuels%20Annual_Ottawa_Canada_6-28-2013.pdf
45
72
NOxemissions in comparison with fossil fuels.46 Pyrolysis oil can be stored, pumped
and transported similar to petroleum products. However, pyrolysis oil has a pH of two
to three, about the same acidity as household vinegar. The acidic and corrosive nature
of pyrolysis oil means that modifications are required for storage and transportation.
Storage vessels and piping should be stainless steel, PVC, Teflon or similar corrosionresistant materials.
9.3.2 Current Markets

Since the 1990s, pyrolysis oil has been used to extract food flavouring (liquid smoke)
for the food industry with residues combusted in boilers to produce heat. Potential
applications could include replacing heavy fuel oil, light fuel oil or natural gas in pulp
mill limekilns, large power plants and district heating plants, as well as heating in
greenhouses and sawmill dry kilns. However, there is no proven technology to handle
and combust pyrolysis oil solely on its own and hence commercial applications have
largely been stalled. There are indications that pyrolysis oil can be co-fired in a type
of dual fuel arrangement, but these applications remain in the early stages. Until a
commercial application for pyrolysis oil for heat or preferable heat and power is proven,
production of pyrolysis oil will be limited.
9.3.3 Industrial Production

Ensysn operates a fast pyrolysis plant, which was commissioned in 2007, next to a
flooring production facility located approximately 90 kilometres north-west of Ottawa,
Ontario. Ensyn produces commercial quantities of bio-liquids at this facility and testing
is carried out on different feedstocks and reactor configurations. The principal Rapid
Thermal Processing (RTP) unit at Renfrew has a nominal processing capacity of 75 dry
tonnes per day (150 tonnes per day of green material). However, it routinely operates at
capacities in excess of its nominal design rate, with a maximum demonstrated processing
capacity of 100 dry tonnes per day. The actual capacity depends on the biomass
feedstock being converted. The facility incorporates the principal RTP unit as well as
smaller testing facilities, liquid fuel handling facilities and chemical processing units.
Manitoba Hydro, the major energy utility serving Manitoba, will work in conjunction
with the utilitys host site customers to showcase five pathways for converting raw
biomass into useful energy: pyrolysis oil, syngas, waste heat, biogas and biocarbon.
Thedemonstration project involved the production and use of pyrolysis oil as a
replacement for heavy fuel oil in a large scale combined heat and power system at
theTolko Kraft Paper Mill in The Pas, Manitoba. The mill relies on a combination of
hogfuel, waste oil, and bunker C fuel oil to fuel a power boiler for the production
ofhigh pressure steam for process heat and electricity. The equipment and services
for this project were provided by Ensyn Technologies Ltd., based in Ottawa.
IEA Task 40. Low Cost Long Distance Biomass Supply Chains 2013. Retrieved from:
http://www.bioenergytrade.org/downloads/t40-low-cost-long-distance-biomass-supply-chains.pdf
46
73
Thedemonstration successfully fired over 60,000 liters of bio-oil in 2010 with stable
combustion with extensive emissions monitoring showing improved boiler performance.
A second demonstration is planned for a grain drying operation where bio-oil will
replace propane.
Pyrovac in 1998 completed its vacuum-assisted pyrolysis plant (84 t/d feed, mainly
bark) in Jonquire, Quebec and operated for approximately 2000 hours before being
mothballed. Recently the plant has been sold to the USA-based company Three
Dimensional Timberlands . The plant will be moved to Gold Beach, Oregon where its
initial focus will be to produce biochar. Dr, Christian Roy, developer of the Pyrovac
technology, will act as a consultant on the new plant commissioning and operation.
74
10.0
Trade
Canada has the 11th largest economy in the world, but is only 35th
in population. This small domestic market dictates the need to rely
on trade for economic growth. Pellets, ethanol, biodiesel, torrefied
wood and pyrolysis oil are tradable, while bio-heat and cogeneration
are generally not.
75
10.1 Wood Pellets

Canada exported almost two million tonnes of wood pellets in 2013, or 86% of
production. Domestic sales were 312,429 tonnes. Many plants are operating at
belowcapacity with total unused capacity in 2013 at 980,000 tonnes. Some plants
in Ontario, Quebec and New Brunswick are entering new markets where they can
becompetitive while other plants remain uncompetitive.
Figure 10.1
Canada Exports vs. Capacity
312,429
979,589
Domestic
Export
Unused Capacity
1,997,982
BC dominates, exporting 1.55 million tonnes or 96% of production primarily to the

industrial heat and power market in Europe, with a small amount now going to Japan.
76
Table 10.1
Canadian Pellet Exports
Capacity
Domestic
Exports
% Exports
Available
BC
2,017,000
56,368
1,549,532
96%
411,100
QC
625,000
122,350
233,650
66%
269,000
NB
202,000
34,200
124,800
78%
43,000
AB
150,000
48,500
34,500
42%
67,000
NS
168,000
31,511
28,500
47%
107,989
ON
95,000
17,000
27,000
61%
51,000
SK
15,000
2,000
0%
13,000
NL
13,000
500
0%
12,500
MB
5,000
5,000
3,290,000
312,429
Can
1,997,982
86%
979,589
Not all plants reported export destinations, but the survey found that at least
200,000tonnes are now sold from Eastern Canada into the bag market in Italy,
and106,000 tonnes are sold from Western Canada into Japan. The US market is
now rebounding. Currently, 109,000 tonnes make their way to the US, primarily
fromAlbertaand Quebec.
10.2 Ethanol
In the past the only exports of ethanol were cross-border trades to save East-West
transportation costs. The 2013 survey participants reported no exports. The FAPRI 2012
database estimated net imports of 545 Ml in 2013 and projected 574 Ml in 2014.
77
Table 10.2
Ethanol Imports47
2010
2011
2012
2013
2014f
Production
1,200
1,350
1,452
1,527
1,547
Consumption
1,690
1,950
2,013
2,072
2,120
490
600
561
545
574
Net Imports
10.3 Biodiesel
Effective capacity without the just-opened Archer Daniels Midland plant was 379 Ml
in2013 but production was only 149 Ml. The survey revealed that 110 Ml was exported,
28 Ml was used domestically, and 11 Ml was unknown.
Table 10.3
Biodiesel Exports
2013
Exports
Ml
109.6
Domestic
28.4
Unknown
11.0
Production
149.0
FAPRI. (2013) FAPRI ISU-2012 World Agricultural Outlook. Retrieved from:

http://www.fapri.iastate.edu/outlook/2012/
47
78
11.o
Supply
Chains
(Pellets)
Efficient supply chains often determine the economic viability
orfeasibility of on-site bioenergy, which depends on low-cost,
regular, assured delivery of feedstock. Exportable products such
as pellets depend on appropriate storage, handling and shipping
offinished product.
79
To address these issues, Fibreco, a Vancouver terminal, invested in storage and handling
equipment for pellets. There is now covered storage for 40,000 tonnes of pellets as
well as covered conveyors for loading. Fibreco also commingles pellets from several
plants, all having the same certified quality. An empty Handymax ship can dock, fill
up, and head to European customers. Fibreco took over all Vancouver pellet exports.
In northern BC, Pinnacle Pellet, Canadas largest pellet producer, decided to invest in
its supply chains. It bought 300 rail cars to assure the rolling stock necessary to move
pellets, and the just completed Westview pellet terminal, near Ridley (Prince Rupert),
has the storage, handing and loading needed for a 70,000 Panamax ship.
Despite improvements, the East still has supply chain difficulties. In Ontario, Atikokan
Pellets had a business plan to produce 135,000 tonnes pellets45,000 tonnes would
supply the OPG generating station and the rest would be shipped to European
customers. However the business model did not work with a 2,200 km rail supply
chainand poor St. Lawrence port facilities.
Quebec had several small pellet plants and each separately arranged shipping and
handling of small volumes, resulting in unnecessarily high costs. Subsequently Rentech
developed a plan to build a 350,000 tonne pellet plant in Wawa Ontario, and signed an
off-take agreement with one purchaser, Drax, the largest power generator in the UK. With
the off-take agreement and the promise of significant pellet volumes, Rentech convinced
the Port of Quebec to build a new pellet terminal with 75,000 tonnes storage, designed
to move 400,000 tonnes per year. Rentech also bought sufficient rail cars meant for
grain in a collapsed business deal to reduce the cost of rail over 1,800 km. With an
efficient long distance Ontario-to-St. Lawrence supply chain, Rentech was able to acquire
the Atikokan plant and make it work. Supply chain innovation is happening, but the new
Quebec pellet terminal is only for Rentech. Other Quebec and Ontario producers must
do likewise: achieve equality in pellet standards, comingle pellets, arrange better ground
supply chains, co-invest in better port handling, and collectively arrange shipping.
In New Brunswick, two pellet producers move 120,000 tonnes of pellets through the Port
of Belledune. Costs have been high because the shared movable loader is inefficient, and
each plant had its own small storage. Recently, the Port of Belledune expanded storage
capability, but differences in the quality of pellets prevents mingling and resulting cost
savings. Newfoundland and Labrador had three pellet plants. Two are now shut down
largely because they have no efficient port facilities to keeptransportation costs down.
80
12.0
Feedstocks
81
12.1 P&P
As indicated in Section 3.1.1, the federal PPGTP was fundamental in pulp and paper
mills adding 195 MW of cogeneration capacity in 20102014. Thirty four out of 39pulp
and paper plants with cogeneration capabilities reported their feedstock sources
for a combined capacity of 1,462 MW. Overall, 12 cogeneration plants use only spent
pulping liquor to generate power, while seven used primarily pulping liquor and some
other feedstock. Fourteen mills used only hog fuel and wood waste in cogeneration
operations, mainly on site. Three plants used a significant proportion of natural gas as
a feedstock, while five plants used oil and gas as auxiliary fuels in the event of lack of
available biomass.
Table 12.1
Pulp and Paper Cogen Feedstock
Hog Fuel
Pulping
Liquor
Wood
Waste
Natural
Gas
Heavy
FuelOil
Total
Capacity
165.3
857.0
324.9
107.7
7.3
1,462.2
% of Cap
11.3%
58.6%
22.2%
7.4%
0.5%
12.2 IPPs
IPPs fueled by biomass use a combination of wood waste and hog fuel, mainly from
local sawmills, with some material from on-site sawmills we well. In Ontario, there are
two IPPs that use natural gas for about 63% of their energy production. Canada-wide,
IPPs produce 78% of their energy from biomass.
82
Table 12.2
IPP Feedstock
Biomass
N.Gas
Total
BC
138.3
138.3
AB
78.5
78.5
ON
70.7
120.5
191.2
QC
70.6
70.6
NS
61.2
61.2
Total
%
419.3
120.5
539.8
78%
22%
12.3 Biogas
Of 68 biogas systems reporting feedstocks in the survey, 28 used manure as a feedstock,
almost all on site; eight systems use organic food waste, primarily from offsite sources;
17 systems use agricultural wastes excluding manure such as corn silage, hay and grasses
primarily on site; seven use off site cooking oils and greases from urban centers; and
seven use municipal solid waste (MSW) from landfills or offsite sources.
83
Table 12.3
Biogas Feedstocks
Landfill
On
Site
Off
Site
Total
Organics
(Foodwaste)
Organics
(Agr.Waste
exmanure)
10
17
Manure
25
28
MSW
Cooking Oils
Pulp Mill Effluent
Total
40
25
68
Feedstock
12.4 Community Heating

For community heating systems, wood pellets feed 25 of 26 systems in NWT. In BC,
15systems use wood pellets while 20 use either wood waste or hog fuel. In Ontario
and PEI almost all use hog fuel. Quebec did not report, but some of the heat plants
areknown to use harvest residues and pellets, while four plants use MSW as fuel.
12.5 Pellets
Historically pellets were made from sawdust and shavings acquired at relatively low cost
from local sawmills. The US housing crisis led to a 50% decline in sawmill production
in Canada and a corresponding decline in mill residues available for manufacturing
pellets. This shortage hit BC particularly hard as it had built up a sizable pellet industry.
To compensate, BC pellet manufactures turned to harvest residues for a portion of their
feedstock. Mill residues are normally devoid of bark, making it an excellent feedstock
for pellets, while harvest residues are more expensive, but require the removal of a
considerable amount of bark. However, in BC not only was 2540% of each harvested
tree left at the roadside as harvest residue, but the damage caused by mountain pine
beetle caused bark to fall off the harvest residues while being trucked to the pellet plant.
84
The survey showed that nationally most pellet plants still use mill residues for 100% of
their feedstock. BC plants used 60% mill residues, 22% logs, 9% harvest residues, 9%
hog fuel and 1% chips. New Brunswick plants used 94% mill residue and 6% logs, while
Ontario plants used a small amount of chips.
12.6 Ethanol
In the Prairies, five plants use exclusively wheat with one plant using a small amount of
barley while two plants use a mix of wheat and corn. In Ontario, three plants use wheat
exclusively and three only use corn. In Quebec the one 1st generation ethanol plant uses
exclusively corn.
In the 2nd generation ethanol plants two use various feedstocks, two use wood waste,
and one uses energy beets. Enerkems Edmonton plant will use MSW.
12.7 Biodiesel
Biodiesel is made from a variety of feedstocks. In Canada, canola is largely used among
western producers in Alberta and Saskatchewan, while recycled cooking oils, tallow
and yellow greases are mainly used in Ontario and Quebec. The proposed facilities in
Alberta also plan to use canola as their primary feedstock. As for biodiesel, 52 Ml are
made from tallow, fats and oils, 20 Ml from canola, and 12 Ml from yellow grease, some
of it imported from the US. In Eastern Canada, 65 Ml are made from multi-feedstock
from surrounding farms.
Table 12.4
Biodiesel Feedstocks
Feedstock
Ml
Multi-feedstock
65
Tallow, fats, oils
52
Canola
20
Yellow Grease
12
Total
149
85
86
13.0
Discussion
European countries do not have large amounts of biomass, yet they
have become leaders in bioenergy. This is largely because they want
to increase energy self-sufficiency in the absence of abundant oil or
gas reserves, and also to reduce the impacts of climate change.
87
Canada is blessed with both oil and gas resources, so the economics of bioenergy
options can vary significantly, even across regions. Canada is also a small market country
and economic growth has depended on trade and competitiveness on a global scale.
Thus, Canadas bioenergy beginnings were spawned in using biomass to reduce costs in
pulp and paper mills and using waste mill residues to manufacture pellets for export.
Rising world energy prices allowed Canadians firms to consider all the different types of
biomass domestically, and the different uses. The 2011-13 Bioenergy Surveys and Data
Studies revealed how Canadas bioenergy industry, with its various types of biomass,
grew in many different directions, from simple use of biomass for building heat, to being
leaders in the development of products such as pyrolysis oil and lingo-cellulosic ethanol.
Many opportunities remain for growth in bio-heat, bio-power, and the export or domestic
use of pellets, torrefied wood and other products. The industry is now trying to further
diversify from energy products to higher-value bio-chemicals. In doing so, industry is
helping to replace many jobs lost in small communities once dependent on traditional
forest products.
The survey noted great improvements in one of Canadas most energy-intensive
sectors, pulp and paper, with significant investments made through the federal
PPGTP in upgrading equipment, improving energy efficiencies, emission controls
andincreasing energy produced from renewable sources. In 201014 alone pulp
andpaper mills increased renewable energy by 166 MW, or 12%.
The Canadian wood pellet industry has grown to become the second largest exporter of
pellets in the world, and is poised to expand in both Eastern and Western Canada and
make inroads into Asia. Pellet demand is driven by foreign policies, and there are risks
especially in Europe where the relative importance of renewable energy targets versus
economic growth is in debate. Canadian producers are under pressure from growing
competition, from the US Southeast in particular, which recently overtook Canada as the
biggest supplier of pellets to Europe. Canadian producers are responding by developing
new highly-efficient supply chains to improve competitiveness. Pinnacle Pellet is building
a new pellet terminal in BC with the rail siding, storage, and loading facilities to fill a
Panamax ship and Rentech is opening up Northern Ontario as a pellet source by buying
rail cars to minimize costs and building a pellet terminal in Quebec. Other Quebec and
Ontario producers must work to achieve equality in pellet standards to reduce costs,
co-invest in better port facilities, and collectively arrange shipping to reduce export costs.
With pellet producers expanding on the basis of exports, the expectation is that
despite widespread availability of low-cost natural gas the domestic market will grow
in areas not connected to gas infrastructure. And so it has. The number of community
heat installations has increased greatly, partially due to supportive provincial policies,
positive economics from fossil fuel savings, but more so because of local champions
(individuals & organizations) that put together all the pieces to make it happen. The
most notable growth has been in BC, Quebec, NWT, and PEI, and driving organizations
include Arctic Green Energy and the Arctic Energy Alliance, Wood Waste 2 Rural Heat
and the BC Bioenergy Network. In an innovative approach in PEI, Wood4heat and the
PEI Bio Heat Initiative have offered to help with such decisions as determining boiler
size, securing biomass supply, choosing the best boiler and buildings for connection,
88
and equipment installations in exchange for an agreement to buy heat and save
money. A similar trend needs to take place in remote and semi-remote communities
where power is still generated by expensive fossil fuels, such as Ontarios off-grid and
Aboriginal communities. Abundant wood resources surround these communities and
champions are needed to use the right technology to produce renewable bio-heat
andpower.
There is a need to identify and provide greater support to emerging bio-economy
clusters such as Bio-Mile in Drayton Valley Alberta and Sarnia, Ontario. To date, the
federal, provincial and territorial governments have implemented an array of successful
policies and initiatives to promote bioenergy, including initiatives in BC and NWT that
resulted in development of community biomass heat; Ontario policy initiatives that led
to leadership in biogas to power; and federal programs that played a large role in the
development of bio-fuels. Continued support is taking shape through cross-sector and
industry government partnerships meant to broaden industry scope beyond energy
and toward development of a greater bio-economy. The Forest Products Association
of Canada (FPAC) started with the development of the Bio-pathways Partnership
Network, encompassing over 250 organizations focused on exploring new business
opportunities in the chemical, pharmaceutical, auto, aerospace and plastics industries.
In 2013, nine industry groups formed the Bio-Economy Network (BEN): CanBio, CRFA,
FPAC, FPInnovations, CropLife Canada, Chemistry Industry Association of Canada,
Automotive Parts Manufacturers Association, BIOTECanada and Sustainable Chemistry
Alliance. These nine industry groups representing 800 member companies believe in
using Canadas abundant renewable forest and agricultural resources to develop the
bio-economy to support jobs and future economic growth.
The 2013 bioenergy data survey and study provided an extensive review of the bioenergy
industry to date and highlighted areas that could be covered in future reviews. Future
surveys should expand to include bio-chemicals and bio-pharmaceuticals to assess what
barriers still exist and how to overcome them.
In summary, Canada still has large volumes of available biomass, and though the
industry has grown considerably, many opportunities remain. This includes community
bio-heat, small power, biogas, and torrefied wood, advanced fuels and specialty
chemicals, and pyrolysis oil for industrial processes. Supply chain innovations also
mean that Canada can regain leadership in biomass exports and continue to provide
jobs in small communities. Continued development will be the necessary building
block to the future development of high-value products such as bio-chemicals and
bio-pharmaceuticals.
89
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3.0 Users of Biomass/Bioenergy Producers . . . . . . . . . . . 17

Cogeneration Industrial Heat and Power Producers (PPs & IPPs) . . 18

5.0 Community Heating in Canada . . . . . . . . . . . . . . . . . . . . 31

6.0 Wood Pellets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Canada and Beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

6.2 Pellet Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

11.o Supply Chains (Pellets) . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Table 2.1 Federal Policies

Table 6.4 Average Size of

Table 2.2 Federal Policies

Table 6.5 Pellet Production

Table 3.1 Number of Pulp and

Table 6.6 2013 Capacity

Table 3.2 New Renewable

Table 6.7 2013 Pellet Exports p49

Table 3.3 Power Production

Table 6.9 Pellet Feedstocks

Table 3.4 2013 Bioenergy

Table 6.10 Direct Jobs in

Table 3.5 Capacity of Future

Table 9.1 Provincial Renewable

Table 3.6 2013 Power Generation

Table 9.2 1st Generation Ethanol

Table 4.1 Biogas Systems in

Table 9.3 2nd Generation

Table 4.2 Biogas Systems in

Table 9.4 Consumption of

Table 5.1 Community Heat

Table 9.5 BiodieselCapacity 201113 p70

Table 5.2 Number of Buildings

Table 9.7 Estimated

Table 5.3 Community Heating

Table 10.1 Canadian Pellet Exports p77

Table 5.4 Feedstock of

Table 10.2 Ethanol Imports p78

Table 5.5 Provincial Programs

Table 12.1 Pulp and Paper

Table 10.3 Biodiesel Exports p78

Table 12.2 IPP Feedstock p83

Table 6.1 European Demand

Table 12.3 Biogas Feedstocks p84

Table 6.2 Canada Wood

Renewable Natural Gas

PPGTP Pulp & Paper Green

2014 CanBio Report on the

In 2013, CanBio, with the financial support of Natural Resources Canada

Greenhouses: There are 52 known greenhouse growers with biomass energy

Torrefied Wood: There has been considerable interest in torrefaction, the

Pyrolysis Oil: Canada was an early innovator in the development of pyrolysis

Starting in 2010, CanBio undertook national surveys of the industry

NRCan. (2013) Bioenergy Systems. Retrieved from:

2.1 Federal Initiatives

Renewable Heat and Power

$1 billion in funding support to improve

$100 million aimed at first-in-kind

Focused on fostering Aboriginal

Supports R&D that develops

Supports R&D that optimizes the

Support a suite of demo projects

Funds smaller-scale demo projects

To reduce GHG emissions from

PPGTP Pulp & Paper Green