Biofuel production gets help from government

Feb. 3, 2010 – The federal government has pledged $292.5 million to help Canada’s sagging forestry sector develop renewable energy from biomass. The announcement came the same day the Forest Products Association of Canada (FPAC) released a study saying the industry needs to make dramatic changes to remain viable.

Integrating Canada’s traditional lumber operations with biofuel and bio-chemical production would protect thousands of forestry jobs and could potentially produce as much power as nine nuclear reactors, FPAC says.

Blending forestry operations with bioenergy production could put the country’s forestry sector back on track and lift Canada to “clean energy super-power” status. Wood fibre, for instance, can be converted into a variety of high-value products, including biofuels to heat homes or power cars, as well as bio-chemicals to make cosmetics, solvents, food additives, and renewable plastics.

"Years of intensive research and development have produced technologies that open up a world of possibility for the forest products industry in Canada,” says Pierre Lapointe, president and chief executive of FPInnovations.

The integration model would allow the industry to extract the maximum value from every tree harvested, FPAC president and CEO Avrim Lazar told decision makers in Ottawa.

An integrated mill – one that produces wood, pulp, or paper, as well as bioenergy and biomaterials – would also provide five times as many jobs as a stand-alone operation, the study found.

The industry currently employs 270,000 Canadians, but it shed 50,000 jobs after the economic downturn led to a collapse in global demand for lumber and paper. Forestry is an approximately $65 billion a year industry and represents nearly 2% of Canada’s Gross Domestic Product.

"This new integrated model will cause investors to take a fresh and more optimistic look at the economic potential of Canada's forest products industry,” says Don Roberts, managing director at CIBC World Markets and leader of the FPAC study.

In a separate announcement, the federal government said it would spend just over $1 million to help protect forestry-dependent jobs against wildfires in the country’s West. The money will fund forest fire reduction treatments on 125 hectares of land in the Cariboo-Chilcotin region.

At least partial funds for both forestry-related initiatives came through the government’s Economic Action Plan.