Manitoba is about to become the first province in Canada to mandate the use of biodiesel.

Starting Nov. 1, all diesel fuel sold in the province must contain an average of two per cent biodiesel, Energy Minister Jim Rondeau announced Thursday.

He said the measure will reduce greenhouse gas emissions by 56,000 tonnes, the equivalent of taking 11,000 cars off the road each year.

"Today's announcement … once again reinforces Manitoba's reputation as an innovator when it comes to the development of the biofuels industry," Rondeau said. "Biodiesel will benefit Manitoba's agricultural communities while reducing greenhouse gas emissions."

But a think-tank for sustainabilty said Thursday its research shows the fuel is no bargain when you compare its cost with environmental benefits.

"Our study shows this is an expensive way to reduce greenhouse gas emissions," said Stephan Barg of the International Institute for Sustainable Development. "What Canada really needs is a is not a provincial program but a national program to reduce greenhouse gas emissions."

'What Canada really needs is a is not a provincial program but a national program to reduce greenhouse gas emissions.' — Stephen Barg, International Institute for Sustainable Development

Biodiesel is a vegetable oil-based or animal fat-based renewable fuel source. It is a clean-burning, environmentally friendly alternative to petroleum diesel.

Canola and soybeans are most commonly used in the production of biodiesel, though other crops such as mustard, flax, sunflowers, palm oil, coconut and hemp are also used.

Animal fats, including tallow, lard, chicken fat and the by-products of the production of omega-3 fatty acids from fish oil, are also used as sources for the fuel.

The provincial government intends to provide greater support for local biodiesel and economic development opportunities, replacing the current fuel tax exemption on biodiesel with a 14-cent-per-litre, five-year production grant for both on- and off-road biodiesel produced in Manitoba starting in the spring of 2010.

That will help keep Manitoba competitive with incentives offered in other North American jurisdictions, Rondeau said.

Thursday's announcement builds on previously announced regulations requiring the licensing of biodiesel manufacturers and the adoption of fuel-quality standards to ensure the integrity of the fuel supply, Rondeau said.

"This announcement is great news for our industry," said Royce Rostecki, owner and president of Speedway International Inc., a producer of canola-based biofuel.

"With the new mandate and incentive, Manitoba is going to become a force in fuel production, no longer relying solely on imported fuels."

Speedway is the only licensed biodiesel producer in Manitoba, though two other plants are under construction — one in Arborg and the other in Beausejour.

Trucking association unhappy

However, truckers in Manitoba have concerns about the new mandate.

Bob Dolyniuk, general manager of the Manitoba Trucking Association, said his group has raised several points in the past with the government about how to implement a biodiesel mandate.

"We're somewhat dismayed that, in fact, the recommendations that we have put forward seem to have been ignored," he said, adding the association is firing off a letter to the province to reiterate its concerns.

Dolyniuk is particularly upset the government has decided to replace the current fuel tax, "so the people that are buying the fuel will no longer get this exemption."

Dolyniuk also has concerns about averaging the biodiesel blend at two per cent. He said the actual blend could vary throughout the year between zero and five per cent as biodiesel is not efficient in cold weather.

Truckers want to know what they're putting in their tanks, so retail pumps should be labelled with the exact percentage, he said.