A Conservative MLA says northern B.C., and his home community of Prince George, stand to lose a major employer and a clean, domestic energy source unless the provincial government prevents American companies from double-dipping when it comes to credits for low-carbon fuels like renewable diesel.
Prince George-Mackenzie MLA Kiel Giddens said Tidewater Renewables, producing renewable diesel, cannot compete against American competitors that take advantage of what the company calls in its 2024 third-quarter report "overlapping U.S. and Canadian policies."
Renewable diesel can lower carbon emissions between 80 and 90 per cent by blending regular diesel with canola oil, cooking oil and beef tallow among other so-called bio-feed stocks and the company opened the Prince George with much fanfare including a visit from Premier David Eby in July 2023 and financial assistance from both federal and provincial governments.
But Canada's first renewable diesel refinery could close as early as March 2025, according to published media reports because of the cheaper supply from south of the border.
Giddens says companies producing renewable diesel in the United States are able to claim subsidies available through the U.S. Inflation Reduction Act, then claim credits through the Renewable and Carbon Fuels Act in B.C. Tidewater Renewables, however, cannot claim American subsidies.
As a result, it cannot compete against cheaper American supplier.
Kiddens has since formulated amendments to the provincial legislation that would essentially trade subsidies off each against other to prevent this double-dipping.
鈥淲e need to be levelling the playing field to make sure it鈥檚 a fair trade market for these low carbon fuel credits in B.C. and we should be focusing on our renewable fuel capacity here in B.C.,鈥 he says.
Prince George has been dealing with the economic effects of a declining forestry sector and governments have been touted projects like the renewable diesel refinery as alternatives. But this alternative now appears in jeopardy.
The renewable refinery is part of a larger complex that employs about 165 people and their jobs could disappear as the company is losing money with its third-quarter report showing a net loss of $355 million through the first nine months of 2024.
The company said that it is pursuing various options including discussions around legislative changes at home and legal challenges against American subsidies to stay in business. But the company also made it clear that its 鈥渁bility to continue as a (company) may be in jeopardy鈥 should these these efforts 鈥渦ltimately prove insufficient or unsuccessful.鈥
Giddens says he hopes government takes the potential demise of those 165 jobs seriously because the situation is urgent with time windows for action tight.
鈥淚 just think we really need to focus on resource jobs and getting people working,鈥 he says. 鈥淎t this time of the year, at the Christmas season, let鈥檚 make sure that we get these workers the certainty that they need to support their facilities. That鈥檚 what ultimately what this is all about.鈥
But Giddens also points to two other issues: energy security and environmental impacts. He says natural resource companies operating in northern British Columbia depend on diesel for their large equipment and supporting Tidewater Renewables would preserve a local supplier.
鈥淚f we lose the capacity here, we will likely see more expensive fuel prices in the province as well, particularly in the north for industry,鈥 he says. 鈥淪o it would be an economic hit if this strategic asset was to falter.鈥
Gidden adds that importing fuel from the United States from places as far south as Louisiana would also create unnecessary emissions.
The provincial government said in a statement from the Ministry of Energy and Climate Solutions that it is aware of the problem, but also signalled that it won鈥檛 act without Ottawa.
鈥淲hile the Low Carbon Fuel Standard continues to attract investment in the development and production of low-carbon fuels and related technologies, we have heard from industry stakeholders, including Tidewater Renewables, that subsidies in the U.S. are impacting suppliers across Canada,鈥 it reads.
As biofuel production has increased, so have trade disputes, 鈥淚t鈥檚 clear we need a national approach to support production in Canada,鈥 it reads.
The statement says that the ministry has been working with Natural Resources Canada to 鈥渆nsure a fair deal鈥 for BC biofuel producers. 鈥(Premier David) Eby has advocated for increased support to the biofuels sector directly to the Prime Minister,鈥 it adds.
The ministry also questioned the Conservatives鈥 interest in the refinery.
鈥淭he BC Conservatives ran on a plan to eliminate the LCFS,鈥 it reads. 鈥淭hat would have forced Tidewater Renewables to close, not to mention the 42 other low carbon fuel standard projects representing $2.25 billion in investments.鈥
The legislature is scheduled to return on Feb. 18, 2025.