Canada favours canola as additive. (Biodiesel).

Milligan Bio-Tech Inc of Saskatoon Canada is promoting the use of biodiesel--in this case rapeseed methyl ester--as a fuel additive to counteract the abrasion problems arising from the introduction of ultra-low sulphur petroleum diesel for use in motor fuels. At the level of just a 0.1% blend,

the lubricity of methyl esters would prove effective, and at the same time account for an estimated 250,000 acres of canola production. Ron McGregor, who formed the company in 1996, told the Western Producer that Canada now has some of the worst diesel in the world, because of government efforts to reduce the sulphur content, and biodiesel--even at such low levels of inclusion--would make the difference.

At present, his company is making biodiesel from edible quality canola oil, but eventually wants to crush its own canola and use lower quality oil from highest yielding seeds, since oil quality is not a consideration.

* Although government subsidies have the potential to make the oilseed industry uncompetitive, government intervention to promote the use of biodiesel would be good for the industry, Rick Watson, vice president of oilseed production at Bunge Canada, told the Canola Council of Canada in March. The Canadian subsidiary of the world's largest oilseed crusher is part of an industry lobby group--the recently formed BioDiesel Association of Canada--that is trying to persuade the federal government to legislate or regulate for a 2% vegetable oil content for all diesel fuel. In Watson's estimation, this would use 400,000 tonnes of canola oil a year--or an additional 2M acres of crop--and could even help induce the US to impose a similar regulation.

In February, Canada's federal government took the step of announcing the removal of a 4 cent/litre federal excise tax on biodiesel, following intense lobbying from the Ontario Soybean Growers (OSG). This move follows the Ontario provincial government's granting last June of an exemption for biodiesel fuels to a 14.3 cent/litre fuel tax--becoming the first Canadian province to provide tax exemption for biodiesel--again made after OSG lobbying.