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Report on the Technical Feasibility of Integrating an Annual Average 2% Renewable Diesel in the Canadian Distillate Pool by 2011

8.1 Appendix 1: Physical and Chemical Tests
8.2 Appendix 2: Full Statements from Stakeholders

8.1 Appendix 1: Physical and Chemical Tests

A number of physical and chemical tests were performed to determine properties of biodiesel blends, and therefore assess fuel technology readiness. A brief description of the purpose of each test is given below^{Footnote 59}^{Footnote 60}:

Cloud Point (CP) – This is the most commonly used measure of low-temperature operability; fuels are generally expected to operate at temperatures as low as their cloud point. The B100 cloud point is typically higher than the cloud point of conventional diesel. Cloud point must be reported to indicate biodiesel’s effect on the final blend cloud point.^{Footnote 61} The CP is the temperature at which small solid crystals are first visually observed as the fuel is cooled (ASTM D2500, D5771, D5772, or D5773). Below the cloud point, these crystals might plug filters or drop to the bottom of a storage tank. Cloud point is the most widely used and most conservative estimate of the low temperature operability limit. However, fuels can usually be pumped at temperatures below the cloud point. A related test is for the wax appearance point, ASTM D3117.
Cold Filter Plugging Point (CFPP) – This is the temperature under a standard set of test conditions, as defined in ASTM D6371, at which a fuel filter plugs. The CFPP test employs rapid cooling conditions. CFPP results more than 10°C below the cloud point should be viewed with suspicion, because they may not reflect the true low temperature operability limit. The test simulates the performance of an average or typical vehicle and is not protective of the most challenging fuel system designs from a low-temperature operability standpoint, which make up roughly one-third of heavy-duty vehicles or one-fifth of light-duty vehicles.
Pour point – The temperature at which the fuel contains so many agglomerated crystals that it is essentially a gel and will no longer flow (ASTM D97, D5949, or D5950). Distributors and blenders use the pour point as an indicator of whether the fuel can be pumped, even if it would not be suitable for use without heating or taking other steps.
Low-Temperature Flow Test (LTFT) – This test also reports a temperature under a standard set of conditions, defined in ASTM D4539, at which a fuel filter plugs. LTFT employs slow cooling at 1°C/h and simulates the most severe (and common) fuel system designs in North American heavy-duty trucks from the standpoint of low-temperature operability.
Cold Soak Filtration Test (CSFT)^{Footnote 62} – This is the newest requirement under ASTM D6751. It was added in 2008 in response to data indicating that some B100 could, in blends with petroleum diesel of up to 20%, form precipitates above the cloud point. B100 meeting the cold soak filterability requirements does not form certain types of precipitates.
Oxidation stability test – Is also referred to as the Oil Stability Index or the Rancimat test (EN14112, EN15751), involves heating a specified quantity of B100 to 230°F (110°C) while air is bubbled through at a specified flow rate. The air then passes through a water bath that collects the volatile acids formed in oxidation. A conductivity meter is used to monitor the water. A stable B100 can go for many hours under these conditions without forming volatile oxidation products. This period of time, before oxidation products form, is called the induction time or induction period.
Long-term storage stability – The ASTM D4625 test is used to simulate storage in underground storage tanks. The test is accelerated by a factor of 4 for petroleum fuels; that is, one week of storage at D4625 conditions (43°C or 110°F, open to air) simulates one month of storage in an underground tank.
Filter Blocking Tendency (FBT) – The ASTM D2068 test method is intended for use in evaluating distillate fuel cleanliness in those applications that demand a high throughput per installed filter. CGSB is currently investigating a new test method based on the FBT test, with a pre cold-soak, to evaluate biodiesel suitability for cold weather operability.
Flash point – The flash point temperature is one measure of the tendency of the test specimen to form a flammable mixture with air under controlled laboratory conditions (ASTM D93). It is only one of a number of properties which must be considered in assessing the overall flammability hazard of a material.

8.2 Appendix 2: Full Statements from Stakeholders

Full statements, from stakeholders on the technical feasibility of an average 2% renewable content, are recorded below when excerpts were used in section 5.2 (Table 1.1).

8.2.1 Canadian Trucking Alliance

May 4, 2010

Natural Resources Canada has requested the Canadian Trucking Alliance’s current position on the Government of Canada’s proposed biodiesel mandate, which I am pleased to provide as follows:

Given the fact that heavy truck engine producers will not provide assurances that fuel with a biodiesel content over 5% will not cause problems with most of the engines currently in use, recent changes in the biodiesel marketplace, newly reported European research which appears to clearly show that biodiesel could actually increase GHG emissions, and the fact that some provinces have already moved into this regulatory arena, we have difficulty understanding why the Government of Canada would still pursue a national biodiesel regulation. We are of the view that the interests of farmers and biofuel producers have to date outweighed the legitimate views and concerns of the primary potential consumer – i.e., Canada’s trucking industry.

If it is still the federal government’s position that it should proceed with a biodiesel mandate, then:

Averaging Biodiesel Blends – The averaging provision in the 2006 Notice of Intent should be removed and it be prescribed that no diesel fuel shall be sold into the general heavy commercial truck marketplace above the B5 level to reduce the risk of operability and durability problems for all heavy trucks and to protect all truck owners’ engine warranties. The sale of biodiesel blend higher than B5 should be permitted only as a specialty fuel, protecting on-road consumers from its use. We would accept a clause in the regulation that would allow for the maximum biodiesel blend to be increased over time once a determination has been made that releasing such blends into the general marketplace would not create operability, durability and warranty issues. (CTA cautions that reports of operability for heavy trucks manufactured before 2001 operating on blend higher than B2.) Simply stating on a pump that the fuel may include bio-content over a certain percentage level is unacceptable.
Cold Climate Mitigation – The regulation should include a provision that will require the identification of regions and calendar dates in which biodiesel blends should not be used due to extreme cold weather. Since B5 blends may be used on a more regular basis, and this fuel is more likely to gel in colder temperatures compared to B2 blends, the Government of Canada must consider extended periods and geographic territory of winter blend bans.
Quality Assurance – Regulated quality assurance is essential. The Engine Manufacturers’ Association has stated that biodiesel must meet ASTM standards and BQ 9000 certification for warranty purposes. These standards must be regulated to ensure compliance at all times. Currently, adherence with these standards is only voluntary in Canada.
Blending Practices – Improper blending practices, even with proper quality standards, can lead to problems. Environment Canada must develop regulatory controls regarding proper blending processes. AMA and CPPI have clearly stated that splash blending is not desirable and that in-line blending is superior.
Regulatory Impact Statement – A properly conducted regulatory impact statement must also be conducted to clearly isolate the cost impact of biofuel on the price of on-road diesel fuel. This will be essential for motor carriers to justify the impact of biodiesel on fuel surcharges to their customers.
Consumer Help-Line – Environment Canada should establish an office to monitor and analyze problems associated with the biodiesel mandate and to establish a help-line to receive information and provide answers to heavy-duty engine users during the introduction of biodiesel into their fleets and beyond.
Fuel Efficiency Credits – (See below). It is imperative that if a biodiesel mandate is introduced the trucking industry must receive substantial credits for biodiesel use under any fuel economy/GHG emission standards/cap & trade system that the Government of Canada may introduce.

In addition, a number of recent developments raise significant questions which require a response from the Government of Canada. Specifically:

1. Would the federal governments proposed new fuel efficiency standards for heavy trucks (GHG regulation) provide the trucking industry with an opportunity, on a micro scale (fleet-by-fleet basis), to get credit for the use of biodiesel. If so what will be the level of credit and will it be cost effective?

2. Has the downsizing of the US biodiesel producing industry, as a result of the federal and state subsidy removal, caused the Government of Canada concern regarding the long term stability and sustainability of this alternative fuel market?

3. What is the Government of Canada’s response to the European Commission report on biodiesel, recently released under freedom of information legislation? This report casts further doubt on the environmental benefits of biodiesel – e.g., biodiesel from North American soybeans has four times the carbon footprint of standard diesel.

Finally, it is an accepted fact that biodiesel cannot be pipelined to market. CTA understands that NRCAN has conducted a market analysis of this impact and requests a copy of this report and a summary of the department’s recommendation to Environment Canada.

I trust this answers the department’s questions about CTA’s position on a possible biodiesel mandate in Canada and that the department will work with us to obtain answers to the questions we pose.

Sincerely,
David H. Bradley
President & Chief Executive Officer
Canadian Trucking Alliance

8.2.2 Canadian Urban Transit Association (CUTA)

CUTA Biodiesel Survey Results Summary

Transit Systems

Short questionnaire developed to survey transit systems on their experience with biodiesel and separates them into three categories:
- Currently use biodiesel
- Have used biodiesel, but no longer use it
- Have not use biodiesel

Survey Results

Survey sent to 67 transit systems across Canada
25 of transit systems answered the survey

Transit Systems Currently Using Biodiesel

7 respondents indicated they currently use biodiesel
Experiences:
- Respondents indicated they used blends from 1% to 10%. One respondent indicated that they intend to use B20 in the near future. Another indicated that the BC Government legislated 5% bio diesel Jan 1^st, 2010
- Issues:
  - Cold weather mixing issues.
  - Outside storage area and do not use biodiesel during the winter months since the mix blocks the filter systems.
  - Required the addition of filters at filling stations, requires ongoing maintenance and replacement of filters on buses and filling stations.
  - One respondent indicated using 5% blend and supplier recommended using 2% blend from December to April and diesel from Christmas to New Years.

Transit Systems With Previous Biodiesel Experience

2 respondents indicated they had used biodiesel in the past, but do not use it now
Issues:
- Both respondents indicated that there was a higher cost than regular diesel forced cancellation.

Transit Systems With No Biodiesel Experience

16 respondents indicated they have not used biodiesel
Issues:
- Fuel availability (11)
- Fuel Cost (7)
- Maintenance requirements (9)
- Lack of knowledge of effects on warranty and older engines
- Cold weather operations

Engines

Cummins Engine provides heavy-duty diesel engines to the transit industry in North America. For new vehicles, Cummins is the only manufacturer of heavy duty diesel engines for transit bus applications.
See attached presentation from Cummins.
Cummins provided additional comments:
- Cummins approves engines up to 20% biodiesel on EPA 02/07/10 engines.
- Expects the fuel provider to ensure that the fuel does not gel. Additives or other measures need to be taken to ensure no gelling, and these measures will vary climate/temperature.
- Since the goal is to achieve 2% bio, on average, we feel it would be simpler to use 2% across the board, with proper measures for gelling.
- As for issues on engines, pre-02, there is potential for leaks due to degradation of seals and gaskets, on pre-02 engines.
- All of the comments are applicable for on-highway applications.

8.2.3 Canadian Oil Heat Association (COHA)

May 31, 2010

RE: Renewable Fuels Regulations in Canada

I am writing in regard to your request for the Canadian Oil Heat Association’s (COHA) position on the proposed renewable fuel regulation.

COHA represents a broad spectrum of the oilheating industry, from producers to small contractors. Our industry looks forward to bringing the environmental benefits of renewable fuels to our end user customer base. COHA Executive Committee members discussed the presentation by Environment Canada with regard to the Renewable Fuels Regulations in Canada. Our understanding is that the regulations do not require 2% biofuel be put in every litre of #2 heating distillate oil; however, it requires an average 2% renewable diesel in the overall volumetric pool of the product, therefore, it is possible not all regions will have access to a blend of #2 heating distillate and biofuel. COHA looks forward to the day when all regions have access to a biofuel blend, but recognizes there will be many technical and supply challenges as the new mandate is implemented.

While COHA acknowledges the environmental benefits of renewable fuels, COHA also wants to ensure the quality and operability of any new fuels blended with traditional #2 heating distillate oil. COHA supports the introduction of the renewable fuels regulations in Canada subject to the approval of the appropriate CAN/CGSB standard. Our Chairman, Mr. Steven Wilson, is a recent member of CAN/CGSB 3.2 Standard Committee and attended the Middle Distillate Committee in May, 2010 where the subject of an appropriate blended biofuel standard was discussed.

Given the magnitude of the changes being proposed, COHA believes a concerted educational effort must be made to bring all our members up to speed on the new regulations and its possible impact on operations and customers. A proposal for an educational program on renewable fuels regulations was submitted to NRCan for your consideration. This program will help the industry understand the regulations. COHA welcomes the opportunity to discuss the proposal at your earliest convenience.

I look forward to hearing from you soon.

Sincerely,
CANADIAN OIL HEAT ASSOCIATION
Veronica Yu
President & CEO

8.2.4 Canadian Federation of Agriculture

May 28, 2010

The proposed Renewable Fuel Regulations will require an average annual 2% renewable fuel content in diesel upon successful demonstration of the technical feasibility of such a mandate under Canadian conditions. The Canadian Federation of Agriculture (CFA) was pleased to see Natural Resources Canada’s (NRCan) Office of Energy Efficiency commission a series of research projects though the National Renewable Diesel Demonstration Initiative (NRDDI) to assess the technical feasibility of biodiesel within the various conditions experiences in the agriculture sector. For CFA members, there was a clear need to analyze the effect that long-term and winter storage would have on biodiesel quality and equipment performance and what management practices related to blending and storage could be implemented to ensure successful implementation of the regulations.

The CFA is encouraged by the results of the NRDDI projects. The report “Effects on Long-term Storage on Biodiesel Quality” undertaken by the Prairie Agricultural Machinery Institute (PAMI) indicated that the long-term storage of biodiesel blends does not reduce the quality of biodiesel to the point where it fails specification testing. A second project run by the Saskatchewan Research Council (SRC) is currently underway and is continuing the initial work of PAMI by assessing storage effects on biodiesel quality under real world agricultural conditions. This project is evaluating biodiesel blends over a full cycle of farm equipment operations, including all aspects of the blending, distribution and storage of biodiesel. In addition, general operability and maintenance requirements of farm equipment utilizing biodiesel blends will be assessed. While the important spring portion of the equipment cycle has not yet been analyzed, the interim report for this project indicates that the integration of biodiesel blends into farming operations proceeded smoothly and required no changes to farmers standard farm bulk fuel storage practices. There was also little indication from farmers that equipment performance decreased. In addition, biodiesel quality and indicators such as water and sediment build up within the fuel all remained sufficient over the winter storage period. However, a point of concern for the CFA is biodiesel’s high cloud point and the increased management requirements during the blending stage to ensure that the fuel meets specification.

The available results from these projects indicate that a 2% biodiesel blend is technically feasible for the operation of machinery in the agricultural sector. From the limited sample size within the research, it appears that biodiesel can be integrated easily into farming operations and that the quality of the fuel and equipment performance can be maintained at current standards. However, if the 2% mandate is to be successful, the CFA feels that increased focus must be placed on quality control and management of diesel supply chain, particularly the cloud point of biodiesel blended fuel. If the regulations are to be successfully implemented, it is essential that the many independent dealers farmers rely on for their fuel are given the knowledge, tools and diesel fuel necessary to ensure that biodiesel blends meet cloud point specifications.

The CFA looks forward to the completed results of the SRC study and any further feasibility studies being conducted by NRCan and offer our continued assistance to help ensure that the Renewable Fuel Regulations can be successfully applied in Canada.

Yours sincerely,

Ron Bonnett
President, Canadian Federation of Agriculture

8.2.5 Canadian Canola Growers Association

June 6, 2010

Re: Canola growers’ position on use of low-level biodiesel blends in equipment to use in NRCan report

Background: This statement will be included in a report from Natural Resources Canada to Environment Canada that documents the technical feasibility of an annual average 2% renewable content in the diesel and heating oil pool. This will be part of the statements from key stakeholders on this issue.

The Canadian Canola Growers Association (CCGA) strongly encourages the government of Canada to adopt a low-level biodiesel mandate in Canada. Numerous studies have shown that biodiesel blends are effective in every season, and in a wide range of equipment that is powered by diesel engines, including equipment used in transportation and agriculture.

We recognize there are small switch over costs for diesel engine operators, for example changing fuel filters which may become clogged due to the engine cleaning properties found in biodiesel. However, these transition costs and minor delays are tiny compared to the long term benefits created for the environment and the economy when biodiesel use is mandated in Canada.

Burning biodiesel is good for the health of Canadians and our environment, and making that biodiesel from Canadian feedstocks such as canola is good for our farmers and our rural economies.

The CCGA represents more than 50,000 canola farmers on national and international issues and policies that impact farm profitability.

The CCGA is a member of the Canadian Renewable Fuels Association.

8.2.6 Canola Council of Canada

June 10^th, 2010

Re: Support for Agricultural Uses of Biodiesel

The Canola Council of Canada represents a cross-section of organizations involved with the growing, distribution, crushing, food production and exporting of Canada’s largest value agriculture commodity. The Council has had a keen interest in the biodiesel issue for a number of years having closely followed and strongly supported its development in Canada. We see biodiesel especially that produced using canola as a feedstock, as important for bringing added stability to Canadian agriculture while helping to meet Canada’s greenhouse gas goals.

Feedback we have received from our growers is that they are aware of biodiesel and its properties and where it has been available in the Canadian market have used the product at different blend levels with success. The confidence in the use of biodiesel by agriculture equipment manufacturers is reflected in their engine warranties. Some manufacturers allow up to B100 to be used, while almost all now approve the use of a B20 blend. This situation in turn, has instilled a confidence in the agriculture sector that a national mandate of a B2 blend is well within the warranty conditions.

At the same time, actual in the field use by farmers and measured studies of biodiesel use by independent research organizations like PAMI and the SRC have confirmed there have been no operability issues with canola based biodiesel in the agriculture sector. Usage of biodiesel in the US and Europe by hundreds of thousands of farmers has evidenced the same conclusion.

We believe there are no technical reasons why a B2 blend can’t be successfully used across Canadian agriculture. All the evidence points to the successful application in this sector of a national biodiesel RFS. For these reasons, the Council supports the implementation of a national RFS for biodiesel in Canada.

Yours sincerely,
JoAnne Buth
President
Canola Council of Canada

8.2.7 Grain Growers of Canada

June 11, 2010

RE: Support of Low-Level Bio-Diesel Blends

I am writing to you on behalf of the Grain Growers of Canada, who represent over 80,000 successful farmers through its membership organizations who grow wheat, oats, barley, canola, corn, peas, lentils and triticale.

We wish to express our strong support for the adoption of a low-level biodiesel mandate in Canada. Studies have shown these blends to be effective in every season and in a wide range of diesel equipment used in agriculture.

While we recognize there may be some minor transition costs for diesel engine operations, they are small compared to the economic and environmental benefits we gain from increased use of all biofuels, including biodiesel.

Biodiesel is better for our environment in comparison with fossil fuels, and can assist in our goal of reducing of greenhouse gas emissions. Additionally, the production of biodiesel from crops such as canola and soybeans will aid Canadian farmers to make a living through increased demand for our crops and the resulting increased prices.

The Grain Growers of Canada believe that governments do not owe farmers a living, but they must create a policy environment to allow farmers to make a living. Support for biodiesel is an investment in a productive policy environment for Canadian agriculture and agribusiness.

We strongly urge the Government of Canada to adopt a low-level biodiesel mandate in Canada, and look forward to offering any assistance towards that end.

Sincerely,

Doug Robertson,
President
Grain Growers of Canada

8.2.8 General Electric (Locomotive Engine Manufacturer)

GE Transportation

May 2010

East Lake Road,
Erie, PA 16531
USA
www.transportation.ge.com

Position statement regarding the use of alternative fuels in GE’s locomotives

The diesel engines on GE’s locomotives are capable of burning a range of fuels. The performance of the engines, however, is optimized when burning petroleum-based #2 diesel fuel. Burning of fuels other than the petroleum-based #2 diesel fuel may have a negative impact on engine/locomotive performance, reliability, maintenance, and regulatory compliance.

With ever increasing concern over the cost and availability of diesel fuel, along with increasing questions around the potential environmental effects of burning fossil fuels, the railroad industry has elevated their interest in researching and qualifying alternative fuels for use in locomotives. One such alternative fuel is biodiesel.

Biodiesel is a blend of chemically reacted oils from plant seeds, animal fats and used cooking oils with combustion properties similar to petroleum¬based diesel fuel. While biodiesel can be used in pure form (B100), it typically is blended with #2 diesel fuel to create a more suitable fuel for burning in diesel engines.

Certain US states, Canadian provinces and countries around the world are strongly promoting the use of biodiesel blends as an alternative fuel. In many cases these various government entities have either adopted, or are considering adopting, legislation that would limit the sale of diesel fuel within their respective jurisdictions to only those fuels that can be classified as biodiesel fuels. Additionally, some of these government entities are providing significant financial incentives to those that produce, blend and burn biodiesel. In response to this growing opportunity, several railroads that operate or are considering operating GE locomotives have been inquiring about the acceptability of using biodiesel in GE’s family of locomotives. In assessing the acceptability of using biodiesel fuel in GE’s locomotives, the prime considerations are the effects on engine power output, fuel efficiency, reliability, service requirements and regulated emissions compliance.

GE has conducted extensive testing of its locomotive engines using diesel fuel specified by the US EPA, as well as other variants, to ensure compliance with the US EPA and EU emissions requirements as well as our customers’ fuel efficiency, performance and reliability expectations. Accordingly, GE’s representations of regulated emissions compliance; performance and reliability of its engines (and thus its warranties and guarantees) are based on the composition of the actual diesel fuel used during testing.

As GE works toward the approval of alternative fuels or different fuel compositions for application in GE’s engines, it is essential that each proposed fuel be tested in locomotive engines under the environment that such engines would actually see in operation. Without such testing, it is impossible for GE to know the performance impact of the fuel on the locomotive and thus how it might impact engine performance, reliability and regulated emissions compliance.

In addition to validating engine performance and reliability, it is necessary to ensure that the regulatory agency with jurisdiction recognizes and authorizes the use of the alternative fuel. An example of this is that under current US federal regulations governing locomotive emissions, US EPA approval is required before a manufacturer can approve its locomotive engines for use with a fuel (or mixed fuel) other than diesel fuel or natural gas fuel [40CFR 1033.101(f) and 40CFR 1033.501(e)].

Some proposed laws encouraging the use of biodiesel fuels are vague in specifying the composition of these new proposed fuels. The definition of biodiesel fuel includes a wide range of compositions, some of which have proven to be satisfactory when properly tested, and others that will likely not be satisfactory. To address this significant issue, standards are being developed around the world to accurately define the requirements for the base diesel & biofuel, as well as the final blended biodiesel. GE’s analysis and validation efforts have been based on the ASTM standards defined below:

ASTM D975 – 09a Standard Specification for Diesel Fuel Oils
ASTM D6751 – 09 Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels

In an effort to support our customers and the industry, GE has recently completed an extensive evaluation of the impact from running biodiesel in GE’s family of locomotives powered by FDL and Evolution® engines. The validation process includes three (3) specific phases with a go/no¬go decision at the end of each phase.

The first phase was to determine the impact on regulated emissions, fuel efficiency and performance. This phase has been completed by means of exhaustive testing at GE and third-party test facilities.
The second phase was to assess the impact on reliability along with any potential changes to the overhaul and running maintenance work scope and interval on specific components on the locomotive that are exposed to the fuel. This phase has also been completed by means of exhaustive testing at GE and third-party test facilities.
The final phase was to validate that the actual operating environment does not have an impact on the results that were found in the laboratory. This phase was completed through field operation in cooperation with selected North America based customers.

The results of testing indicates that a blend rate of 5% (B5) will not have a detrimental impact on the ability of the locomotive to produce its rated horsepower and comply with current US EPA regulatory requirements for emissions. Furthermore, the impact on fuel consumption at this blend level will be minimal.

At this point in the biodiesel validation effort, GE is able to approve the use of biodiesel in GE’s family of locomotives powered by FDL and Evolution^® engines at a maximum blend rate of 5% (B5) by volume, providing the biodiesel fuel used is fully compliant to ASTM D975-09a Standard Specification for Diesel Fuel Oils, and the biofuel (B100) used to make the B5 meets ASTM D6751 – 09 Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels.

GE will continue with our validation process for other biodiesel fuel blends, and will carry on with a clear focus to ensure that GE’s locomotives will be able to support the needs of the railroads and the railroad industry in the area of alternative fuels.

8.2.9 Shipping Federation of Canada

Shipping Federation of Canada

The Shipping Federation of Canada would like to acknowledge the work undertaken by Natural Resources Canada as part of the National Renewable Diesel Demonstration Initiative, more specifically with respect to a 2% renewable diesel use in the Canadian marine sector under the Renewable Fuels Regulations. We would like to think that biodiesel offers a promising avenue in reducing air emissions and greenhouse gases from the marine sector, and we are pleased to see that the body of research on this topic is growing.

Unfortunately, the work did not include any experiments on oceangoing vessels, which would have addressed some of the concerns we have with respect to the operations of such vessels. While there have been several studies involving biodiesel on-board ships, none of these experiments are transferable due to the differences in engine sizes and overall operational environments. We have stated in our comments to Environment Canada that the proposed regulations lack specific information as to how the regulations would be applied to the marine sector. More specifically, the proposed regulations do not offer insight as to whether their provisions would be aligned with the ISO Petroleum products – Fuels (class F) – Specifications of marine fuels, which has been developed to ensure fuel quality.

The newly completed standard, ISO 8217:2010 Petroleum products – Fuels (class F) – Specifications of marine fuels published on June 15, 2010, specifically excludes biodiesel products. Several factors support this decision, including concerns related to storage and handling (such as poor low temperature flow properties, tendency to oxidation, long term storage issues, affinity to water, risk of microbial growth and FAME material deposition on exposed surfaces including filter elements). Moreover, Working Group 6 under the Technical Committee 28/SC4, which specifically addresses marine fuel standards, recommends that the possibility of including biodiesel in marine fuels be debated at the next revision.

It is of the utmost importance to our industry that fuel purchases are tested for compliance with these specifications, since non-conformity will effectively void the warranty on the ships’ engine. As a consequence, no engine damage will be insured, which is a risk that no ship-owner will take. Given that biodiesels were excluded from the new ISO 8217 norm for the abovementioned reasons, as well as the fact that there has been no long-term study of biodiesel usage on-board oceangoing vessels, we cannot endorse a 2% renewable diesel use for use in the Canadian marine sector.

8.2.10 Chamber of Shipping of British Columbia

Chamber of Shipping of British Columbia

The only concern expressed by our members has been one of bio-diesel content potential price differential, however, this does not currently appear to be a factor.

In researching this subject I did come up with the following article on ISO standardization which was a concern well expressed by Mr. Lantz during the recent teleconference.

Quote: 25th September 2009 10:48 GMT

The ISO8217 working group will continue to assess test methods

Changes proposed in the fourth edition of the international marine fuel standard, ISO 8217, represent a "significant advance on previous editions", according Wanda Fabriek. Fabriek is the chair of the working group that oversees the specification's revision process, the ISO TC/28/SC 4/Working Group 6 (WG6).

In an article prepared for Bunkerworld, she said a request by the International Maritime Organization (IMO) to ensure the fourth edition was ready by July 2010 has been a "particular driver" behind the development of this latest edition. The draft of the fourth edition of ISO 8217 is currently out for balloting, and the Draft International Standard (DIS) version is available from the International Organization for Standardization (ISO) website (www.iso.org) for public comments.

Additionally, the ISO 8216-1 standard entitled “Petroleum products – Fuels (class F) classification – Part 1: Categories of marine fuels” has also been revised and is similarly out for balloting. The working group (WG6) that Fabriek chairs comprises 33 expert members from 14 countries, drawn from all sides of the marine fuel industry.

Fabriek highlighted three key issues that were also the subject of discussion at the IMO's Marine Environment Protection Committee (MEPC) meeting in July this year. “The work of maintaining and developing of marine fuels quality standards will always require some degree of compromise” One is the presence of biodiesel in marine fuels due to supply chain logistics. It has become “almost inevitable” that some marine distillates, and even perhaps marine residual fuels, could contain some biodiesel, Fabriek noted.

Although biodiesel blends are used and encouraged for the automotive industry, within the marine industry there is a lack of generalised experience with biodiesel and biodiesel blends. There are also a number of issues with regards to storage stability and the potential adverse effects on the existing range of marine engines and other ancillary equipment from biodiesel and biodiesel blends, Fabriek pointed out.

The ISO 8217 working group has therefore recommended that at the current stage of specification development, only a minimal amount of biodiesel can be tolerated in petroleum-based marine fuels. It is "seeking to develop a suitable test method, or methods, to measure biodiesel concentrations in marine distillate and residual fuels in order to be able to quantify this issue," Fabriek wrote.

Interest in biodiesel or biodiesel blends for the marine sector has been heightened due to its potential to reduce emissions targeted by regulations. Fabriek said trials of such fuels should be “in the full knowledge of all parties as to the particular composition of the fuels being used.” The ISO has asked the IMO to consider the status of biodiesel fuels and blends with regard to the MARPOL Convention and other statutory instruments, Fabriek stated.

Hydrogen sulphide – H2S – was another contentious issue at the MEPC meeting in July. As concerns have been raised in some quarters of an increased incidence of H2S in bunker fuels, it has been added as a newly proposed specification parameter for the ISO 8217 standard. Although there is a potential for the presence of this toxic compound in bunker fuel there is very limited data on the incidence of H2S in marine fuels. In the absence of reliable historical data on the occurrence and concentration of H2S in marine fuels, a conservative but practical limit has been set at 2 mg/kg in the liquid phase for both residual and distillate fuels. In doing so, ISO faced criticism at the MEPC for its recommended maximum with the MEPC suggesting that the limit should be reduced to zero.

Fabriek explained that the working group acknowledges that H2S should not be present in marine fuels, but said that a zero level was not technically viable due to the lack of reliable data and limitations of the currently available test methods. The 2 mg/kg maximum limit does not condone the inclusion of H2S in marine fuel, but balances the practicalities of H2S management in component streams and the Safety Data Sheet advice for all involved in working with marine fuels to always take precautions against the possible presence of H2S.

Although it is possible to accurately measure H2S in the vapour phase, as per the standard test method (ASTM D5705), this is “more appropriate as an occupational health protection measure, but due to its limitations it cannot be considered as a marine fuel specification test method.” it was also suggested at the MEPC meeting in July to remove H2S measurement from the ISO 8217 specification. By including H2S into the standard, it will help establish the facts about the level of H2S in bunkers supplied to ships and promote better awareness of the safety implications, according to the ISO working group. “By removing this parameter from the specification there will be no warning and no further developments to improve on the test methods available,” Fabriek commented.

Turning to fuel combustion and ignition delay, Fabriek said it was “hard to describe the enormity of the task at hand” when considering this complex issue. The available test methods, CCAI (Calculated Carbon Aromaticity Index) and the FCA (Fuel Combustion Analyser), both have their own strengths and weaknesses. CCAI fails to assess the complex chemistry of a particular fuel, nor can it address the fuels actual performance in an engine.

Establishing the FCA test method (IP541/06) as a standard parameter at this time, meanwhile, was deemed premature in view of the ongoing research into the practical application of this method within the marine industry. Fabriek explained that the working group decided to include CCAI because it is a simple and readily accessible tool which, despite its limitations, has proven useful over the years as a means to avoid fuels with extremely uncommon density/viscosity relationships.

The working group will continue to assess test methods with regards to fuel ignition and combustion performance with a view to inclusion in future revisions of the ISO 8217 standard. Preparing the fourth edition of ISO 8217 to address air quality, ship safety, engine performance and crew health has undoubtedly provided the ISO working group with a number of challenges. "The work of maintaining and developing of marine fuels quality standards will always require some degree of compromise with the industry's various stakeholders demanding from each other the best engine performance, the best fuel quality together with widespread availability," Fabriek observed.

Fabriek concluded that the draft currently out for balloting “represents a significant advance on previous editions and fairly reflects the realities of the current petroleum and marine worlds.”

Unquote

I also came across this article which details a study currently underway by Lloyds Register’s Strategic Research Group and funded by the Government of the Netherlands in cooperation with Maersk Line.

http://www.lr.org/news_and_events/press-releases/181528-maersk-and-lloyds-register-team-up-for-marine-engine-biofuel-tests.aspx

Other than this we have nothing further to add to the discussion at this time, however, thank you for the opportunity to comment

Sincerely

Stephen Brown
President
Chamber of Shipping of British Columbia

8.2.11 Canadian Construction Association

I am writing on behalf of the Canadian Construction Association at the suggestion of Ms. Nancy Johns of Natural Resources Canada. She urged me to share with the views of the association with regard to Environment Canada’s intention to regulate B2 biodiesel use across Canada by 2011.

This past weekend in Regina, our Environment and Research and Innovation Committees were treated to a presentation by Mr. Cameron Rittich of FPInnovations on their study: Demonstration of the Potential Use of Biodiesel for Off-Road Machinery in Canadian Highway Construction and Forest Operations. The study focused on biodiesel use in off-road operations and found no technical issues exist with regard to widespread substitution of B2 for conventional diesel fuel. While the use of higher content biodiesel presented some performance issues (such as poor engine performance due to the solvent properties of biodiesel and the circulation of dislodged build-up throughout the fuel system), these performance issues were overcome with thorough fuel tank cleanings prior to biodiesel use. Long-term storage of higher content biodiesels in remote areas were also raised as a potential concern, however, given that most remote construction occurs on a seasonal basis (spring to fall), any storage challenges (even in remote areas) can be overcome by a change in fuel procurement policies. Therefore, CCA’s concerns with regard to the mandated use of B2 are not technical in nature.

While CCA members support the greater use of biodiesel in construction vehicles and equipment, they are opposed to mandated-use policies and believe markets work best when consumer decisions drive innovation, not government policies. Since the FPInnovations study demonstrated B2 fuel will have a negligible impact on tailpipe emissions and that appreciable declines are only registered when formulations of B20 or higher are utilized, there appears to be little environmental justification to proceed with this regulation at this time. Furthermore, mandating B2 across Canada will put further pressure on already tight biodiesel feedstock, thereby likely increasing industry fuel costs without any significant improvement in overall environmental performance.

CCA members find the increased use of biodiesel a laudable goal and one that, over time, has the potential to yield substantial environmental benefits. They remain, however, opposed to a mandated B2 fuel policy and recommend that B2 and other high content bio-oil formulations be introduced into the Canadian economy on a voluntary basis and only expanded gradually as more adequate supplies of biodiesel feedstock become available.

At your convenience, I would be pleased to discuss this matter further with you. In this regard, please do not hesitate to contact me directly at 613-236-9455 ext. 432.

Sincerely,

Bill Ferreira
Director of Government Relations and Public Affairs | Directeur des relations gouvernementales et des affaires publiques
Canadian Construction Association

8.2.12 Canadian Petroleum Products Institute

CPPI comments on the RIAS for 2%

CPPI and its members have participated to a series of programs under the National Renewable Diesel Demonstration Initiative, led by Natural Resources Canada. During the course of the programs, valuable insight has been gained, on the impact of various biodiesel types and renewable diesel blends, under Canadian conditions. In some cases, the gap between experimentation and practical application remains substantial and must be adequately addressed in the final decision-making to ensure a seamless introduction of biodiesel blends into the market place.

Those findings need to be taken under consideration by the Standards setting organizations, such as CGSB, to develop and adopt the required standards that will ensure consumers that the new products are fit for intended purpose, when introduced into the market. CPPI does not support the introduction in the market place, of a new fuel products, without the appropriate standard.

The introduction of Renewable diesel and Biodiesel blends requires extensive and careful planning, as it impacts on many segments of the supply chain, from Refinery to storage, blending and distribution. Sufficient time must be available, from regulatory certainty, to allow proper infrastructure design, construction and commissioning. For example, the initiatives provided direction on blending components (ULSK & HDRD) requirements and biodiesel attributes (SMG) of concern that require addressing, in order to mitigate the risks to customers of using biodiesel blends under severe Canadian winter operating conditions. We remain concerned that , many of the initiatives understated the logistical challenges in sourcing/transporting the required blending components. The NRDDI NRCan Biodiesel Distribution Infrastructure Analysis is expected to provide additional insight on these important aspects. CPPI members have provided detailed information on the specific requirements and associated timelines and therefore shall be considered a key element in assessing the technical readiness.

In closing, CPPI stresses that these three aspects must be taken into consideration; that is:

understanding the conditions and limitations,
having appropriate standards in place, and
providing sufficient time to implement the necessary infrastructure.

Only when those three aspects are present, one can consider the supply chain is technically ready for a seamless transition to the end consumer.

8.2.13 Canadian Renewable Fuels Association

Canadian Renewable Fuels Association

National Renewable Diesel Demonstration Initiative (NRDDI) Summary Statement

Global renewable diesel (RD) consumption in 2010 is projected to be 100 million barrels, distributed across the Americas, Europe and Asia. Biodiesel is the primary commercially available RD, accounting for over 98% of RD. Low level biodiesel blends have been proven in virtually every sector, excepting aviation, for over a decade. Biodiesel is now pipelined and stored in petroleum product terminals around the world. Every major engine manufacturer has approved its use. Mandated markets in several Canadian provinces have been implemented without incident at blend levels exceeding the federal Renewable Fuel Standard.

Natural Resources Canada’s National Renewable Diesel Demonstration Initiative (NRDDI) program was created to confirm the full operability of renewable diesel fuels under Canadian conditions in advance of the proposed renewable fuels regulation that would require an average annual 2% renewable content in diesel fuel by 2011 or earlier. The NRDDI studies covered all of the key sectors for biodiesel use. Prior to the NRDDI program, the ARDDI (Alberta Renewable Diesel Demonstration Initiative) demonstrated successful use of low level biodiesel blends in on-road applications in extreme Canadian conditions. There were no truck filter plugging issues and no dispenser filter plugging issues in the ARDDI.

The NRDDI projects studied different applications including rail, forestry, agriculture and others. Some of the projects covered some aspects of long term storage. The most exhaustive of these was the Manitoba Hydro Fleet LTS (Long Term Storage) project.

CP Locomotive NRDDI Study

The primary focus of the CP (Canadian Pacific) Locomotive demonstration was to investigate the feasibility of using up to a maximum of five percent biodiesel blend (B5) in freight locomotives operating in cold weather service. The diesel engines on General Electric (GE) locomotives are capable of burning a range of fuels. The scope of this study included operating four GE AC4400 diesel locomotives with a FDL-16 engine in captive service between Calgary and Edmonton on CP’s mainline from November 2009 to March 2010.

AC4400s represent approximately 75% of CP’s active locomotive fleet. In this demonstration, the assessment was focused on locomotive performance, condition, maintenance and replacement frequency of engine components and fuel efficiency. Regarding the principal objective of assessing operability, no “loss of service events” were noted. There was no indication of significant differences in engine components, lubrication or combustion. Overall, this demonstration showed successful use of B5 blends in rail application in Canadian climate.

Demonstration of the Potential Use of Biodiesel for Off-Road Machinery in Canadian Highway Construction and Forest Operations NRDDI study

The NRDDI forestry study provides evidence that biodiesel blends in the B2 to B10 blend ratio can be used with little to no preparation on the part of the end-user of the highway construction and forest operation sectors. Biodiesel blends all met the blend specifications, and all blends such as B10 in this study’s case, were used with ease. In all, 47 machines participated in running biodiesel blends. Monthly machine hours at the sawmill ranged as high as 350 hours for one machine to a low of 8 hours for machines that sit idle and are used on a backup basis. The machinery was monitored to ensure productivity was not compromised and machine operators interviewed to gauge their acceptance and perception on any negative impacts to the machines’ operability. The responses from the users were all positive and there was no downtime encountered. Over 280,000 litres of biodiesel blends were consumed and over 7,000 hours of problem free machine time were positive indicators of success.

PAMI Ag Biodiesel Study – Effects of Long Term Storage on Biodiesel Quality

In 2008, PAMI (Prairie Agricultural Machinery Institute) participated in a biodiesel demonstration that included ten farms where biodiesel was used in their harvest equipment. Upon project completion, the biodiesel blend was left in the fuel tanks of the combines. Nine months later, the biodiesel blend samples were sampled and analyzed. In addition, PAMI also collected B5, B10 and B20 samples that had been stored for two years in outdoor storage tanks. The results of the testing demonstrated that long term storage of biodiesel blends up to B20 for periods of up to two years does not adversely affect the quality of the biodiesel blend.

SRC (Saskatchewan Research Council) Agricultural Biodiesel Study – Off Road Biodiesel Demonstration Agricultural Sector

This demonstration provided the Canadian agricultural diesel fuel consumer group with a real-world, closely monitored, biodiesel experience to determine performance characteristics, blending and storage requirements. This NRDDI study demonstrated that adoption of low level biodiesel blends into the agriculture sector does not require changes on the part of producers in relation to on-farm bulk fuel storage practices. This demonstration did not make any modifications to producer bulk tank storage systems such as the incorporation of filters or water separators, or conversion to compatible materials, and throughout the monitoring period, from August 2009 to April 2010, fuel quality was demonstrated to have been maintained.

Project participants indicated that no equipment operational problems were experienced in the demonstration, and no changes as compared to operating on diesel were noted. There were no issues found related to water and/or sediment build-up in equipment stored during the winter period and in unused bulk tanks. None of the tractors or tanks tested indicated excessive water and/or sediment levels. Overall, this demonstration has shown successful use of biodiesel blends in agricultural applications.

Imperial Oil – Furnace Oil Study

In this NRDDI study, a test program was carried out by Imperial Oil to evaluate the long term performance of late-model furnaces using bio-furnace fuel. The test facility was equipped with three furnaces and each test consisted of three cycles (40 days each) to simulate spring/fall, moderate severity and winter cold snap operations using furnace fuel blended with Canola Methyl Ester (CME), Soybean Methyl Ester (SME) and Tallow Methyl Ester (TME). Furnace operating parameters were monitored weekly during the test. Inspection of systems (filters, burners, pumps, burner nozzles, and heat exchangers) was performed after each test. The results from the test program showed that there was negligible impact on furnace operation and performance with furnace fuel up to B10. The results from this NRDDI study were in part used as supporting documentation for the CGSB Heating Oil specification to include B5, which recently passed ballot.

Imperial Truck Study – Low Temperature Operability Test Phase 2:

Impact of Saturated Monoglycerides on HDD Truck Operation

This NRDDI study was a laboratory study that employed a technique of spiking a CME (Canola Methyl Ester) with high levels of SMG (Saturated Monoglycerides). The study showed that the performance of the fuel delivery systems associated with the heavy duty diesel trucks tested was negatively impacted when such techniques were used to artificially spike SMG at high levels. The preliminary findings of this study were due to the high melting point of individual SMG components. However, the additional work done in the Manitoba Hydro Fleet study would indicate that spiking high levels of SMG in a lab experiment may yield erroneous results. Based in part on the work of this NRDDI study, the CSFBT test and limit has been included in the proposed CGSB B100 specification.

Imperial Oil – Low Temperature Storage Test Phase II – Identification of Problem Species

To gain a better understanding of the saturated mono-glyceride issue, the low temperature storage stability of fifty seven bio-diesel fuels comprising essentially B5 and B20 made with CME (Canola Methyl Ester), SME (Soy Methyl Ester), TME (Tallow Methyl Ester) were tested. The deposits from selected B20 blends after cold soaking were analyzed. Based in part on the work of this NRDDI study, the CSFBT test and limit has been included in the proposed CGSB B100 specification.

Demonstration of the Use of Biodiesel in Electric Generators in Remote Canadian Locations and Long Term Storage in Gensets

The purpose of this NRDDI study was twofold. One purpose was to assess long term storage of biodiesel in remote locations. The other purpose was to demonstrate the use of biodiesel blends to northern Canadian regions for use in gensets for power generation. This project successfully demonstrated storage and use of B5 blends in gensets in remote Canadian locations in extreme conditions.

The genset maintenance records demonstrated that no additional maintenance was required with the use of the B5 blends in the demonstration. There were no issues or additional maintenance required during the course of this project. The Genset Demonstration and LTS (Long Term Storage) Study sought to understand whether the reported dispenser filter issues are related to long term storage, biodiesel blending and handling, biodiesel B100 quality or minor impurities. This study mirrored the efforts of the Manitoba Hydro Fleet LTS NRDDI study in that regard. The testing involved both tank aged and laboratory aged samples. This NRDDI study showed that in cooling the samples to zero degrees over 15 successive days showed no signs of solids formation. The data for samples cooled 3 °C above the cloud point for 15 days showed no signs of solids formation. The D4625 data for the B5 blend demonstrate stable long term storage of up to one year. There were no issues with sediment formation or any fuel related issues of using a B5 blend in a harsh Canadian environment over the course of this demonstration project.

Long Term Storage and Use of Biodiesel in Fleets Summary

The purpose of the testing and monitoring of long term storage of biodiesel blends for the Manitoba Hydro fleets was to study long term storage and distribution of biodiesel blends for trucking use. In the last few years, there have been a few incidents of dispenser filter plugging in biodiesel blends in the USA. The LTS Fleet Study sought to understand whether this issue is related to long term storage, biodiesel blending and handling or biodiesel B100 quality. This NRDDI study provided a greater understanding of the likely root cause of these prior incidents and the implications on long term storage requirements. There were operational or dispenser plugging issues as a result of biodiesel use in Manitoba Hydro fleets in this demonstration. This observation applies to both the period of the project from August 2009 to April 2010 as well as to the prior two years of biodiesel use in Manitoba Hydro Fleets. The Manitoba Hydro Fleet LTS Study sought to understand whether the dispenser filter issues reported in other jurisdictions have been related to long term storage, biodiesel blending and handling, biodiesel B100 quality or minor impurities. This differs from other NRDDI studies in the fact that this study includes both lab data and field data and only used commercially available B100 samples.

The Manitoba Hydro Fleet LTS study also sought to better understand the preliminary findings of the Imperial Oil Low Temperature Storage Test Phase 2 – Identification of Problem Species.

In the Manitoba Hydro study, the fuels were observed upon removal after incubating at 3 °C above cloud point and any visible solid formed went back into solution within one hour with no agitation. Blends up to B15 were evaluated and pictures of the samples taken over the fifteen day test show no signs of solids formation after incubation at 0 °C for 15 days. The D4625 data for the B5 and B8 blends demonstrate stable long term storage of up to one year. The Fleet Long Term Storage Demonstration thus provided confirmation of successful blending, handling, long term storage and use of these biodiesel blends in extreme Canadian conditions, with no dispenser filter plugging or truck filter plugging issues.

Conclusion

The CRFA believes that all of the NRDDI projects have successfully demonstrated the full operability of renewable diesel fuels under Canadian conditions in a variety of applications that are representative of the renewable diesel fuels are likely to be used in Canada. In many cases these projects were designed to test the fuels in operating conditions far more severe than most users will experience and yet no significant issues were identified in the programs.

The CRFA supports the use of renewable fuels that are commercially proven, produced under industry best practices, and distributed under established fuel specification standards. All of these criteria have been well documented for biodiesel use in Canada and there are no reasons not to proceed with the 2% renewable requirement in the Canadian distillate pool.

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Date modified:: 2015-12-24