Sowing the Seeds to Our Low-Carbon Future

April 11, 2023

The Empire Club of Canada Presents

Sowing the Seeds to Our Low-Carbon Future

Chairman: Jenna Donelson, 3rd Vice-President, Board of Directors, Empire Club of Canada

Moderator
Francis Drouin, Parliamentary Secretary to the Minister of Agriculture and Agri-Food, Government of Canada

Distinguished Guest Speakers
Bob Laroque, President & CEO, Canadian Fuels Association
Chris Vervaet, Executive Director, Canadian Oilseed Processors Association
Michelle Belisle, Regulatory Affairs and Planning Advisor, Imperial Oil
Andrea Kent, Vice-President, Industry and Government Affairs, Greenfield Global
Jasmine Igneski, Vice-President, Sustainability and Government Relations, Parkland Corporation

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indira Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau; literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business and thought leaders.

It is a real honour and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Jenna Donelson, 3rd Vice-President, Board of Directors, Empire Club of Canada
Good afternoon. Welcome to the 119th season of the Empire Club of Canada. I'm delighted to be here with you and our esteemed speakers today, thank you for your participation and support. Our role at the Empire Club is to inspire thought leadership and learning. As a trusted forum for conversations that matter, we provide a platform for the professionals of our community to profile their expertise. We hope to spark meaningful connections into productive dialogue by having you, our colleagues and peers, help us sustain and grow our nation's diverse wealth of knowledge, and today’s no exception. So, welcome. My name is Jenna Donelson. I'm the 3rd Vice-President of the Board of the Directors of the Empire Club of Canada, and the Director of Public Affairs and Strategic Engagement at Humber College.

To formally begin this afternoon, I want to acknowledge that we're gathering on the traditional and treaty lands of the Mississaugas of the Credit, and the homelands of the Anishinaabe, the Haudenosaunee, and the Wyandot Peoples. I encourage you to learn more about the lands on which you work and live.

The Empire Club is a non-profit organization, and I now want to take a moment to recognize our sponsors, who generously support the club and make these events possible and complementary for our online viewers, such as yourselves, to attend. So, thank you to our season sponsors, Bruce Power, Hydro One, and TELUS, and special thanks to our Fuel for Thought virtual events series partner, the Canadian Fuels Association.

If you require technical assistance, please start a conversation with our team using the chat button on the right-hand side of your screen. We invite questions from the audience by accessing the Q&A function under your video player.

Turning to today's program, it's important to recognize that partnerships and collabourative efforts are crucial to tackling the challenge of reducing emissions from Canada's transportation sector. Canada's agricultural sector, refining expertise and infrastructure are working together to harness the power and potential of low-carbon fuels to position Canada as a global leader in clean transportation energy. As further collabouration between Canada's agriculture and transportation fuels sectors seek to unlock the potential of made-in-Canada, low-carbon fuels, we can look forward to a more sustainable future for generations to come.

With that, it is now my pleasure to invite Bob Laroque, President and CEO of the Canadian Fuels Association, to deliver some opening remarks. Welcome, Bob, and over to you.

Opening Remarks by Bob Laroque, President & CEO, Canadian Fuels Association
Thank you, Jenna, and good afternoon, everyone. First, I'd like to acknowledge that I'm joining you all virtually today from the unceded territory of the Algonquin Anishinaabe Peoples. I'm very excited for today's virtual event and wanted to say a big thank you to the Empire Club, to our moderator, Parliamentary Secretary Francis Drouin and his team, merci beaucoup, as well as our guest speakers, Michelle Belisle from Imperial, Jasmine Igneski from Parkland, Andrea Kent from Greenfield Global, and Chris Vervaet from the Canadian Oilseed Processors Association, and all of you, who tune in to listen to this important conversation.

In the latest update of our drive into 2050 vision, we talked about the need for collabouration to help reach for collective climate goals, and how Canada's world-class agricultural sector, along with our refining expertise and infrastructure, provides our country with a unique opportunity to become a leader in low-carbon fuels. Today's event is a great example of how CFA and our members continue to collabourate with national agriculture organizations like COPA on a number of low-carbon solutions, including the use of oilseed feedstocks such as canola to process low-carbon fuel, or to produce renewable diesel and ethanol. By leveraging our collective value chains, we are taking a Team Canada approach to tackling climate change. But I don't want to give away too many spoilers for today's discussion. So, without further ado, I'll turn it over to Parliamentary Secretary Drouin to say a few words and get the conversation started.

Francis Drouin, Parliamentary Secretary to the Minister of Agriculture and Agri-Food, Government of Canada
Thank you so much, Bob, for your kind introduction. I, too, would like to acknowledge that I'm speaking to you on the unceded lands of Algonquin Anishinaabe People. And I am excited to be here with the Empire Club and with our amazing panelists, Jasmine, Chris, Andrea, and Michel, glad to be here. I have, as a politician, I get the easy job today. I get to ask the questions, and you get to answer the, those questions. So, good luck to you. And I certainly look forward to the conversation. For me, low-carbon fuel will play an important role in attending—and I think, Bob, you've, you've mentioned it—in reaching our targets. How do we do that? I look forward to hearing the discussion today, with the collabouration and the innovation that can happen between the fuel industry and the agricultural industry.

Obviously, I come from, I get to, to chat with a lot of folks in the agricultural space. I don't often get to chat with folks from the fuel space, but I do. They do come knocking on my door, once in a while, and it's important for me to understand what they're trying to do and the targets they're trying to achieve, and how they do that. And with that, I will launch the, officially the conversation, and I will be asking the first question. So, in supporting biofuel production in Canada, what are some of the mutual benefits for the Canadian agricultural community and Canadian fuel producers, and how does Canada’s strong agricultural sector give us a unique advantage in producing biofuels to meet global demand? And Chris, I will, I will go to you first to answer this question, because of the background that you have. So, Chris, why don't you go ahead?

Chris Vervaet, Executive Director, Canadian Oilseed Processors Association
Sure. Thank you, Mr. Drouin. And maybe, just by a bit of background, I've been involved in agriculture my entire life. So, from my early days growing up on a mixed grain farm outside of Winnipeg, to my time working abroad representing agriculture in markets like China, and my current role representing Canada’s growing canola industry; so, agriculture really does course through my veins. And it's never been a more exciting time to be in the agriculture industry, especially the role that it can play to help decarbonize transportation fuel.

But before I get into some of the aspects, first, a very brief overview of the egg and crop sector in Canada. So, indeed, Canada's agricultural and agri-food sector is strong. It employs close to two million people in Canada and contributes nearly seven percent of the total GDP in this country. Canada is also a powerhouse on the world stage. It's ranked as the fifth largest exporter of agriculture and agri-food products. Crop production, which is the sector that I represent, is a big part of Canada's agricultural success story. Approximately one million metric tons of grains, oil, seeds, and pulses, are produced by Canadian farmers each year, with more than half of it exported. So, while the sheer volume and large surpluses of crop output make it a natural source of renewable feedstock to support the biofuel production in Canada, it's actually more about how it's produced that gives us that unique advantage in terms of it being a good fit for low-carbon fuel production in Canada. So, crops like canola, soybeans, wheat, and corn, are among the most sustainable in the world when they're produced in Canada, and it's really by two key factors, in terms of why we're so sustainable.

I talked about what we're producing on an annual basis this year, roughly a hundred million metric tons. Twenty years ago, it was closer to fifty million metric tons. So, we have managed to double the total output of crop production in this country. But not at the expense of land expansion. We don't have any more new arable land in production, but yet we've been able to increase our output by more than twofold. Secondly, crop and agricultural lands in Canada are also a major carbon sink. And this is largely owing to farm practices such as minimal and zero-till of the soil and converting otherwise barren lands or barren soil—which is often subject to soil erosion—to crop production. So, over the years, these two practices alone have sequestered tens of millions of tons of carbon from the atmosphere into Canadian soils. So, the ability to increase output on the same amount of land, combined with the natural sequestration that has occurred because of sustainable farm practices, crops in Canada are the perfect choice for sustainable and low-carbon sources of food, feed, and fuel.

Canada's advantages go beyond just primary production, though, as it relates to agriculture. We have very robust supply chains and a proven ability to bring products to market in a manner that is commercially scalable and timely. This is especially important as the nascent biofuels industry in Canada will play an important role in decarbonizing transportation fuels going forward. Thank you.

Francis Drouin
Thank you so much, Chris. And maybe I'd ask Michelle to jump in. And Michelle, because this is the first question, I'd ask you to just kindly introduce yourself at the same time. Thank you.

Michelle Belisle, Regulatory Affairs and Planning Advisor, Imperial Oil
Absolutely. Thank you. Good afternoon, everyone. I'm Michelle, Belisle, and I'm a Regulatory Affairs Adviser with Imperial focusing on fuels and biofuel policy. And maybe just to springboard off of what Chris said—so, in addition to, obviously, the wealth of experience, and knowledge, and ability, Canada has to produce feedstocks, I think we really have the opportunity to capitalize and capture the economic benefits all the way through the supply chain. So, from that cultivation all the way through to finished lower-carbon biofuels. So, in addition to the farming practices that that Chris spoke about, and, you know, the amazing work that’s been done by the agri-industry, you know, over a period of time, Canada also has vast experience and expertise in converting our natural resources into finished products. And so, we've been demonstrating this for well over a century, in producing the fuels that, you know, we have used in the past and continue to use today, and will continue to evolve as the demand for different products changes over time and biofuels increases.

So, I think there's really, you know, some ability to capitalize on locating our production facilities close to the feedstocks that that we use. Not only will we, you know, continue to build and grow that supply chain domestically in Canada, but we'll also, you know, take advantage of the distance and not creating inefficient infrastructure, or even the transportation needed, to move feedstocks and finished products from their place of origin to their place of use, which in addition to the efficiency that we would see from that, will also lower the carbon intensity, right? So, the greenhouse gas and emissions that are created through movement of these products. So, I think, you know, starting where Chris said in increasing that yield while maintaining the land space to do so, we can also produce the products that we need in Canada super efficiently.

Francis Drouin
Thank you so much, Michelle. And Jasmine, I would ask you to intervene on the first question as well. But kindly introduce yourself so our viewers are aware of who you are. Thank you.

Jasmine Igneski, Vice-President, Sustainability and Government Relations, Parkland Corporation
Will do, thank you. My name is Jasmine Igneski, I'm head of GR and Sustainability at Parkland. You might not know, recognize the name Parkland itself, but I'm sure you'll recognize a number of our brands; we operate through Chevron, On the Run, M&M Food Market, Ultramar, Pioneer, Fast Gas, and many others. I would say—I think we all agree, here—that Canada is blessed with vast natural resources. And that really provides a lot of opportunities around an integrated Canadian value chain; I think that integrated piece and that made in Canada piece is really important. So, being able to manufacture low-carbon fuels using Canadian products, Canadian innovation, and Canadian labour, every step of the way. I think that really is the key for us, and it makes it exciting for us around the fuel sector.

You know, look at, you, starting right from supporting farmers crops, local processing plants that convert to tallol or canola that we use for our feedstock, right through to the manufacturing and supplying consumers with fuels for their vehicles. You know, one—a perfect example is the work that we're doing, we have a refinery in Burnaby, BC, and it was the first facility in North America where we used existing infrastructure to produce low-carbon fuels by co-processing Canadian renewable feedstock and conventional crude. And that biofuel production comes out with one-eighth of the carbon intensity of conventional fuels. So, it really is a huge greenhouse gas emission reduction, while we're using Canadian products and innovation right across the board.

And one of the newest innovations that really has an impact in the agriculture sector is we, in 2022, were the first facility also to use tall oil as a bio-feedstock. So, tall oil is mainly derived from pine trees, and it's a byproduct of the pulp mill process. So, it was a real technical breakthrough that made a huge environmental impact. But also, using a waste byproduct that's typically burnt in the pulp process. So, I think those are some exciting things that we're really looking forward to continuing with.

Francis Drouin
Thank you so much, Jasmine, for this discussion. And Andrea, I'll send it over to you and ask you the same question. I think you get it by now, but just to kindly introduce yourself before you answer the question. Thank you so much.

Andrea Kent, Vice-President, Industry and Government Affairs, Greenfield Global
Absolutely, and always nice to have the benefit of having colleagues go first, to, to pave the way there. So, I'm Andrea Kent. I've been involved in the biofuels sector here in Canada coming up on a decade. So, I started with the Canadian Renewable Fuels Association, I was President there. And I've since moved in-house, where I head up the relations for industry—so, a big part of what we're talking about today—and also policy for Greenfield Global. And Greenfield is Canada’s, probably, first and largest ethanol producer. So, when we look back at the contributions that a biofuel like ethanol has made, and kind of the proud legacy there of working with agriculture, I really like to, you know, think of it as a thread that kind of goes through the modern landscape today. And, you know, Bob and I kind of remember, I think, when a panel like this wouldn't have been even possible, where you would see a low-carbon fuel producer like Greenfield, you know, kind of that pioneer dedicated expert, speaking alongside with members from the petroleum industry, looking at, you know, integrated energy companies that are doing really, really remarkable things, as well as hand-in-hand with agriculture. So, I, you know, it's been said, but I think it's a really exciting time.

The other reason why—I mean, aside from us just being, I think, very collabourative and seeing the opportunities ahead of us—I think the reason why the collabouration is happening, and it's happening at such a high level, these days is because of the business that's at stake as well. When we look globally at what our trading partners are doing, they're trying to figure out what Canada has known for a long time, which is, I think, that agriculture really is a building block for energy. And certainly, when you look at it through more of a planet-friendly lens. And when, I think, we look at the immediate opportunities, part of it is just accepting the fact that biofuels have played a really key part up to date, but maybe not everyone is as aware of what modern biofuels mean in a Canadian context. And Chris touched on the sustainability, and how proud we should be of the sustainability and innovation in the agriculture sector, but also looking at it from, really, like the heavy lifting and economic engine of the low-carbon fuel industry here.

And I think when, you know, we kind of connect the dots on what my colleagues have already said, what it really boils down to is, you know, this concept of decarbonization, Canada can do that with innovation and investment. It doesn't have to do it with, you know—at the expense, I should say—of developing a low-carbon fuel market there, domestically. And biofuels have already proven, you know, the sustainability, over decades. We've already shown how much of that heavy lifting we can do. Like, the equivalent of 1.2 million in gasoline-engine cars that a lot of people look at are already running on biofuel. Now that's a great story for affordability. It's cutting, you know, the equivalent of 1.2 million vehicles off the roads worth of emissions, with very little, I think, understanding from consumers sometimes. So, telling that story, I think, is so important and also looking at the modern biofuel story. Looking at waste props like Jasmine said, looking at how much of an opportunity there is for made-in-Canada, agricultural-driven things like Chris and Michelle have already said, and also looking at what existing producers are doing, like Greenfield. So, we have, you know, waste biofuels, you know, proprietary technology; we're also looking at reducing our carbon intensity still—even though we've been in the business for decades—and really getting to that true, you know, net zero, all the way from the farm, all the way to the gas tank, type of carbon reduction that that so many people are looking for. So, hopefully, that kind of puts a bow on it, and we can kick it back over to you, Mr. Drouin, to take us through some of the—are there tougher questions? I believe so, probably, right?

Francis Drouin
Thank you so much, Andrea. Actually, you've sort of touched on two points, the potential of having this conversation between the petroleum industry and the low-carbon fuel industry, global demand is there. So, when explaining to Canadians—and maybe Chris, I'll go over to you first, to give Andrea a break—but how do you see this benefiting the Canadian economy? What does it mean for Canada's economy, the low-carbon fuel economy?

Chris Vervaet
Yeah, thanks. I mean, it's—I think Andrea really set us up nicely for that question, just in terms of some of the investments that we see already taking place; and I'll speak more specifically to the investments, as it relates to agriculture. So, the different policies and regulation that support low-carbon fuel consumption and demand has a direct positive impact on Canada's agriculture sector and the overall economy, as a result, as well. So, a perfect example of this is the growing investments that we see currently taking place in Canola processing. So, over the last 24, 36 months—so, two or three years—we have seen more than two billion dollars of expanded processing capacity either under construction or announced in Canada. So, this is creating thousands of direct and indirect jobs in the process. And this increased processing also supports more value-added creation in Canada. As I said in some of my opening remarks, we have an abundance of grain production in this country, where we actually export most—or certainly, the majority—of what is grown in Canada, and often in its raw form. So, we see the export of raw Canola....

Francis Drouin
Thanks, Chris. I think I'm losing you, so. I'm not sure if viewers are losing you, but maybe I can, maybe we'll just, we'll ask Michelle to intervene here, while Chris gets his high-speed internet back—something that our government is surely working on. Michelle, the economy, from the Imperial side prospectives, you've talked about making sure that refinery plants are close to feedstock. How important is that to the economy for rural, for rural economies, for instance, is something I'm thinking of—but please jump in.

Michelle Belislie
Thanks. Yeah, I think it's, I think it's important for rural economies—and when Chris comes back, I think he'll talk about the crushing plants, or maybe Andrea can follow up on that too—you know, really taking from the cultivation all the way through to the kind of production of the feed stock. But maybe, I'll take it the next step down the supply chain into, you know, using that feedstock into a biofuel production. And so, at Imperial, when we're talking about the benefit, the economic benefit, at Imperial, we're all really excited about our recent announcement of a final investment decision of 720 million dollars for our Strathcona renewable diesel facility. So, in Strathcona County—so, not rural, but still obviously within the Canadian, the economy—this facility we're expecting to produce twenty thousand barrels a day of renewable diesel from locally-sourced, crop-based feedstocks. So, again, within that kind of prairies area. And to put that into perspective, that's more than an Olympic-sized swimming pool of renewable diesel production every day, and more than a billion liters a year. And so, when we look at this in terms of the economy, as Chris said, you know, there's construction jobs, and we're projecting about six hundred direct construction jobs through this project and this facility. But we've also entered into agreements with Air Products, to supply low-carbon hydrogen produced using carbon capture and storage technology. And that's gonna provide, again, those additional hundreds of jobs between that facility and our other business partners, feed stock producers, get the oilseed producers, you know, in the construction phase.

And then past the construction phase, we've got this ongoing, you know, sustainability and sustained jobs that we have in the production of this fuel. So, again, not only our facility and our partnership with Air Products, and with our third-party bio-feedstock providers, but it's all the way through the supply chain that we're gonna see these economic benefits, from rural all the way down to, you know, your most urban environments, as Andreas said, right? We're just pumping biofuels into our tanks right now without a thought, just, it's how we do business, and it's how we're living our lives, and how we're doing it with lower greenhouse gas emissions.

Francis Drouin
Thanks. Thank you, Michelle. Jasmine, you've talked about some of the brands that you, Parkland, is behind. And I'm just wondering, from your perspective, what does that mean for companies such as the one you work for, in terms of the economy, economic benefits that it can create?

Jasmine Igneski
Yeah. Thank you very much. I did talk a bit about this made-in-Canada solution, and I think that really is important for everyone on this panel. And I talked a bit about the co-processing work that we're doing at Burnaby. You know, and that low-carbon fuel is already being—you know, if you fill up at a gas station, the Chevron station in the Greater Vancouver area, you're already getting the low-carbon fuel. So, I think the opportunity to invest and grow this production across Canada, and growing the Canadian feedstock availability as well, really has a potential to have this made-in-Canada solution that will generate well-paying jobs and new opportunities here in Canada, versus seeing that shift or leave to the US or other jurisdictions.

You know, we've talked about a number of facilities and projects already on this call, and I think that we need to even increase that moving forward, so that we can continue reducing Canada's reliance on importing foreign renewable diesel, foreign renewable fuels. I think that's going to be very important for us to solidify our position as global leaders. And then, you know, the added benefit is the economic impact. So, we're going to drive more economic growth, we're going to create more well-paying jobs, supporting government services through increased taxes, supporting, you know, meeting our climate change initiatives. So, I think that all really ties in well together.

And I don't think that growth is just limited to existing technologies. I think R&D and innovation is another key piece here. You know, I talked a bit about the tall oil work that we're doing. We're also exploring other next generation feedstocks; I think that's going to be really important, as we try and grow this sector. You know, we're looking at things like additional forestry residuals and municipal wastewater, as well as, you know, second-generation feedstock. So, I think if you look at those pieces that really are going back to that having a made-in-Canada solution that helps our economy, it helps Canadian jobs, and, you know, is avoiding having Canada reliant on importing from the US.

Francis Drouin
That's very, it's music to my ears when I hear you talk, I certainly appreciate that. And Andrea, over to you—but before that, Chris, we'll get back to you right at the end, I know you had some interesting things to say—and Andrea, I was one of the lucky few Members of Parliament that got to see what Greenfield Global is working on, but I don't want to scoop you. So, I'll let you tell the story of how this can benefit the Canadian economy.

Andrea Kent
Oh, thanks. Yeah, absolutely. And I mean, I felt lucky getting to see that project in action as well, too. I think what, you know, just to take a quick little step back going into that, so, so much of what we're saying here, I know a lot of sectors are also dealing with. And I think when, you know, coming at it, whether it's through, you know, a policy decisionmaker lens like yourself, just consumers and other people who are making, you know, whether it's business decisions or just at a house, you know, household level, it can seem pretty daunting. But I think one of the things that gives, again, you know, biofuels and low-carbon fuels, hopefully, some additional credibility and comfort there, is that we've already done this one time very successfully already, going back when you look at it through a policy lens. And that hasn't come up directly. So, maybe I'll just mention it here quickly.

Fuels is a regulated industry, as is the environment; the environment is a public good, right? So, as a result of that, I think everyone here is very, very used to the fact that there are fuel regulations. But Canada has done a good job a couple of times now, going back about, you know, 15 or so years with the original renewable fuel regulations, and more recently with the, you know, Canadian clean fuel regulations that have come out. And really, you know, putting forward some parameters and some ways in which the industry can address climate, but really do so through domestic production, reasonable and reliable market growth, where everybody can kind of get a piece of that pie and really sets us up for longer-term success.

And I think when you look at where the agriculture piece, specifically, comes in, this is something that biofuels is, you know, it's kind of a three-legged stool, but the connection has always been very, very natural, and continues to hold a ton of promise for a country like Canada. And setting up conditions in the regulatory environment that recognize that, that, you know, kind of speak to the advantages of our agriculture system, and really allow domestic producers—like you were saying, Jasmine—to really, really shine and reach their full potential; that's really where the mutual benefits come in. And I think, you know, looking at it on a carbon basis, you know, we have so much street cred there, because we've already created such a strong foundation for it. And you know, in its earliest days, biofuels really were an economic and rural economic development policy that also brought with it some real environmental benefits at the same time.

And you know, looking at, you know, what Greenfield’s turned that into, a lot of it has to do with investing in things to shrink our own carbon footprint, as well as reducing the carbon and the fuels that we produce. And we're able to do that and create value for our customers, and also work with growers so that, you know, through that whole supply chain like Michelle was saying, those benefits are really well understood. And a policy like the clean fuel regulation sets up a market that does that. And hopefully, sooner rather than later, we can start, you know, showing, showing what that looks like once the regulation comes into full force. And then you look at what a company like Greenfield is able to do, in addition, to kind of spread the benefits out across our own business and our own supply chains. We're also able to reinvest in, you know, the things that are around the corner.

So, getting back to that University of Alberta project, it really was looking at, okay, how do we take what we know how to do and scale that up into the future fuels that we need for modes of transportation that are even more challenging, like aviation. And the partners that came to that table with us, we had, you know, government, Environment Climate Change Canada, Agriculture Canada, but we also had the airlines, we also had other customers who are looking into this space as well, too. And it doesn't have to be something that is so far down the road, or so conceptual. I think that when you look at the legacy, and the history, and the credibility of the low-carbon fuel space, and companies like the ones who are joining us here today, it is not only in the realm of possibility, but in the realm of being made in Canada, for Canada, and then the world in terms of that market that's before us.

Francis Drouin
Thank you so much, Andrea. And Chris, I know you had some important things to say and, unfortunately, you cut out. But the virtual floor is yours, right now.

Chris Vervaet
Yeah. Thank you, Mr. Drouin, sorry about that. I'll just build, quickly, on what some of my colleagues have said. I like what Jasmine said with regards to a made-in-Canada solution; that's certainly how our sector views the opportunities in biofuel production in Canada. And we're here to support that build out of production capacity, the things that Imperial are doing, and Parkland are doing. The example I can give—and the one I was gonna give before I got cut off because of technology—was really around the expansion of Canola processing in this country. So, we have approximately two billion dollars in investments that have been announced over the last, let's say, two or three years. Thousands of direct and indirect jobs are going to be created as a result of that. And it really is that direct link in terms of supporting the supply chain and supporting the activities that Imperial, Parkland, and others, are doing to help decarbonize transportation fuel. So, the words like collabouration and working together, and just these synergistic fits, and all the positive attributes that Canada has coming together, is really what we view as the big opportunity going forward.

Francis Drouin
Thank you so much, Chris. And I know for, just for the audience, I know there's been some questions that were asked, and we are, we will—we've got about two more questions to go through, and then we'll get to the audience's questions, because I think that's important as well. Michelle, you've touched—everyone has touched—a little bit on that, you know, expanding the production and the use of biofuel, and what potential do you see with the biofuel industry. And I think, Jasmine, you talked about second generation feedstock, which is interesting—I hadn't heard that before. But, Michelle, why don't you jump in there and talk about the potential that we see for, that you see for the use of biofuel in Canada?

Michelle Belislie
Yeah. Well, I mean, I think the use of biofuel is, you know, expanding, especially with drop-in fuels like renewable diesel, right? Where we can effectively drop this in, and diesel replacement at much higher blend rates than we historically have been with other products. But I mean, I think our renewable diesel facility is a great example of, you know, expanding the production; largest facility planned in Canada to date. And you know, the greenhouse gas emission reductions that we're expecting from this facility are about three million tons a year in the transportation sector, if used in Canada, compared to conventional fossil diesel fuel. So, I think the production opportunities are huge, kind of based on the feedstock, what we've just talked about. And then the real impact of the use of production at that scale within Canada is truly meaningful within the transportation sector.

And maybe, just one to kind of springboard off of what Jasmine had been saying too, about co-processing. So, I think, in addition to, you know, these new facilities, like our renewable diesel facility, co-processing is another huge opportunity to expand the production capacity, while using our existing facilities. So, we know over time and in the future, demand for products is gonna change. You know, we're gonna be looking at how transportation changes, and it will change our demand. So, being able to use existing facilities that are already constructed with a new feedstock, you know, different than our traditional crude, to produce this new product that that folks are demanding in biofuels, is a huge game changer, I think, for the industry. It's really an efficient use of what we already have to produce an evolving product that we want. So, I think a key challenge here will be making sure that we have practical requirements under the clean fuel regulations that will recognize this and allow us to expand this practice.

Francis Drouin
Thank you so much, Michelle. And Jasmine, what potential do you see for the expansion of production and use of biofuel in Canada?

Jasmine Igneski
Yeah. I mean, I think it's significant. I think energy demands are increasing, not decreasing right now. So, I think Canada really does have a crucial role to play, both domestically, but also on the international stage. You know, we really are well-positioned, I think, to be global leaders in low-carbon fuels, if we approach things correctly both from the industry perspective, but also, respectfully, from the government perspective as well. You know, Andrea talked a bit before about regulatory and policy environments. So, I think those are things that we really need to collectively work together on as well.

You think about, you know, many countries rely on authoritarian regimes for less responsibly and less sustainably produced energy and fuels these days. This really has the potential to reduce energy security, create poverty, and broadly destabilize nations; like, look at what's happening in Ukraine. So, I think, as energy leaders, our responsibility goes beyond just the economics and the supply issue, but considering what's the right thing to do, not only for Canada but for our allies in the global community. So, I really think that if we can, you know, better export our fuel, our renewable fuels, it benefits not only Canada but the global environment, and other key allies and countries.

You know, I really do think this production in Canada is crucial. Particularly, there's many sectors where, you know, electrification is on a much longer timeline, like marine, aviation, rail, and trucking. So, renewable fuels and biofuels, these industries are what's going to really continue helping us, you know, operate the transportation sector in the short to medium term, while still being able to reduce environmental impact, reduce GHG emissions, and, you know, help government meet their targets.

You know, talking again a bit about our co-processing as an example. You know, last year, we co-processed over 111 million liters of bio-feedstocks, and that was the equivalent of taking 113 thousand cars off the road. So, it really is making a significant environmental benefit as well, and we're doing a lot of work on expanding that and trying to increase our capabilities as well. So, I think it's a huge opportunity, and there's a number of interesting and exciting projects that are, as Michelle said, existing but new ones. And so, I really think that there's a lot of opportunity, and I think industry and government really needs to work hand-in-hand, to make sure that we have the environment to continue to grow this to the opportunity that we have.

QUESTION & ANSWER

Francis Drouin
Sounds very, very interesting. Andrea, I'll send it over to you, but I will incorporate one of the questions that we did have with regards to some of the barriers that exist to unlocking Canada's full low-carbon potential. And at the same time, I will ask you the question from the audience with regards to, they essentially want to know if we are competitive, are the Canadian clean fuel regulations with regards to the land use and biodiversity reporting, is that competitive with the United States, or does that put us at a competitive disadvantage with the United States, currently, as it's being proposed? Andrea, you get to answer that simple question. And Chris, don't worry, I'll get back to you as well, after that.

Andrea Kent
It is—short answer is, it depends. It depends. And I think that the very nature of that question speaks to how technical and how considerate some of the regulations that we've touched on already really, really are. And that's important. That that's critically important. And we are definitely, you know, in a window right now, where we have about six years of really solid work behind us, and we're kind of in the home stretch in terms of the implementation of the Clean Fuel Regulation—and I will get to that question in a second. But just on the, on the barrier piece, I think it's a good opportunity to say that maybe one of the barriers is just our mindset about stuff like this. We think that, oftentimes I think it is, it has to be very, very complicated, and certainly, the nitty-gritty technical aspects of it matter. But the fundamentals are really I think, very, very simple to understand and benefit everyone. And we've touched on a couple of big ones today.

Fuel benefits accrue where they're used, but economic benefits accrue where they're produced. So, if we can make these low-carbon fuels in Canada, and the more of them that we can make in Canada, the larger the economic benefits will be the GHG reduction. That, that’s going to come wherever the fuel is used. And I think, when you look at what, you know, President Biden announced, it really hit that nail on the head. He was really going after reliable, domestic, trustworthy, domestic production. And that's kind of the road that that we're working on as well, too, and in our own regulatory space.

The other one—and Jasmine touched on it—is when you look at being a responsible global leader and producer of energy, you tend to get your domestic policies right first. And I think that that is the opportunity here as well. And when you look at the sustainability criteria and this question about, you know, land use and biodiversity, it's really trying to scratch at, are we doing everything in Canada sustainably? And are we, you know, ensuring that we are measuring the performance of our crops, and our fuels, and all of the inputs against a reliable yardstick or a meter stick? And I think that, you know, we have advantages here, absolutely, that are very well known. That companies like ours are investing and making sure that we can properly report and reflect, as part of the regulations that the Canadian Government is working really hard to implement. But we can't slow that down. And I think bottlenecking is a real concern right now. Not just because we're close, you know, we're closing the gap on implementing this landmark regulation here for Canadian producers, but also, realizing that foreign products are going to be part of this regulation as well, too.

So, it isn't necessarily an advantage just because it's a Canadian regulation, it's an open global trading market. So, measuring performance and making sure that Canadian producers and Canadian growers get full credit for all the work that they're doing, that's what this question is getting at. I think we're close. But I think it, you know, the timing has never been more critical to make sure that we get there as quickly as possible. Especially, now that we know that global competition is knocking on our door because of the US Inflation Reduction Act, and how generous it is. So, that's really generous. I think we can win on being specific, looking at this really closely, and executing as quickly as possible. So, I'm optimistic.

Francis Drouin
Thanks, Andrea. Michelle, what do you think that some of the barriers that currently exist that could impede growth in the biofuel in sector?

Michelle Belislie
I really, I won't repeat what Andrea just said, but I think that the practical regulatory solutions for the implementation of the Clean Fuel Regulation are just going to be absolutely key for us to achieve the goals that the regulations really, you know, intend to achieve. The more clarity that we can have all the way through the value chain as quickly as possible is going to provide more confidence for everyone in this value chain to make the investments that are needed to have this grown in Canada, made in Canada solution. Or exactly—as Andrea and Jasmine have both said, right—we're going to be subject to competition. And, you know, the global fight for capital is happening right now, and investments are being made right now. And if decisions are made in six months or a year from now, we will have missed our opportunity to really capitalize on this opportunity that's in front of us. So, I think that's—the biggest barrier is to have practical solutions developed very quickly, and not let perfection get in the way of very good and pragmatic solutions.

Francis Drouin
Thank you. I think I'm hearing an overall theme here, practical regulations is something that that I'm hearing. Jasmine, unless you have something different that you want to add on in there, in terms of barriers to potential growth in the biofuel industry?

Jasmine Igneski
I’ll just make one quick addition—I agree with everything that Michelle and Andrea have said. But the one thing I would just add is I think the other issue that could be a concern is the looming feedstock supply crunch, right? The more we want to increase our production of renewable fuels, the more reliant we're going to be on renewable feedstock. So, I do think that there's also some support on the policy front that that we could use there. And I think, in order to be able to meet our commitments, that's going to be an important piece. I talked a bit about, you know, us looking at second generation renewable feedstocks as well. But I think there's a lot more work that's gonna need to be done around R&D and pre-commercialization stage of that work.

Francis Drouin
Thanks, Michelle. And I think that that was one of the questions that one of our, somebody in the audience has asked, the whole food versus fuel debate. And Chris, you have had the opportunity to work with a lot of farm groups, so I will ask you your opinion on some of the barriers that currently exist for unlocking that, that growth potential. And I've heard the practical regulations—I'm sure you'll chime in on there, as well—but can you, is this something that you're hearing from your members, as well, in terms of the, you know, do we have enough feedstock or crops to meet demand for food, and secondly, meet demand for fuel? And that's something that's often talked about in the public space.

Chris Vervaet
Yeah, sure. So, when it comes to food and fuel, that's the way that we characterize this; it's really about supplying all the different markets that we're capable of. And we've been doing this for decades in terms of being providers of food, feed for animals, and also, the use of crops in industrial uses and purposes. So, the debate has been longstanding, but nothing fundamentally changes, from our perspective, as it relates to our ability to continue to produce what needs to be produced to satisfy food, feed, and fuel. We do, of course, need good regulation, as it relates to increasing our food production and being as efficient as possible. I liked Andrea's comments with regards to being optimistic with regards to the clean fuel regulation as an example and getting some of those details right. But I'll just echo what my colleagues have said in terms of the importance of really making sure that the details of regulation are as practical and as and as pragmatic as possible, so we can unlock the potential that ag has to produce more, but also for agriculture to be a very active participant in the low-carbon fuel supply chain.

Francis Drouin
Thank you. Thank you so much, Chris. All of you have touched on, obviously, practical regulations, and make sure we have regulations that make sense for everyone involved in the supply chain. But some of you have also talked about investment decisions making, are happening right now, and if we don't act soon, we'll miss the mark on this. So, I would be curious to find out, I think, some of you have mentioned there will be some, a refinery built, an investment of 750 million or 20 million dollars, I believe it was said. So, what are these decision factors driving these investments decision, and what does this mean for the low-carbon fuel production in Canada? And I know we've—so, maybe we can talk about what's happening today and then what needs to happen down the future, so these investments continue to happen. Michelle would be the first one to go. Thank you.

Michelle Belislie
Sure. Yeah. So, 720 million dollars is our final investment decision for the Strathcona Renewable Diesel Facility, and that's to produce twenty thousand barrels a day of renewable diesel. We're expecting production to happen, to begin in 2025, so it's—well, it feels like a long, long way away when you're building something of that magnitude—it's right around the corner. I think one of the big elements here—and Andrea and Jasmine have both brought out—is the US Inflation Reduction Act, and that the Clean Fuels Regulations is not a produced-in-Canada-only regulation. It will apply, equally, to imports from any other jurisdiction, including the US. So, when we look to our trading jurisdictions and our near neighbours to the south, if you've got a comparable facility receiving a producer’s tax credit or an incentive, and then still—so, giving the carrot in the US, and then being able to also generate compliance credits through importation of that product into Canada. That's really what, as Canadian producers, we're trying to compete against. And we're only really seeing the stick element of the equation. And it can be quite challenging to make those economics work, when you're not, you know, reaping the benefits of tax incentive and production incentives that you're nearest, you know, neighbours, and your competitors really are facing. So, I'll let others jump in as well on that, because I'm sure we could run a whole session on the US Inflation Reduction Act

Francis Drouin
Thanks, Michelle. I'll go over to you, Jasmine.

Jasmine Igneski
Yeah, I definitely agree with what Michelle said. And I think I'll just under score by saying, you know, the North American market is integrated, which makes this even more and more of a challenge. And, you know, it was nice to see the government did talk about some additional support for biofuels in the budget. But I think it's going to be really important to see what does that look like, how much of that gap of the IRA incentive benefits will the government be able to close by whatever new incentives or regulations that they're looking to. I think it's really important that it's not just about incentives either. I do agree we do need to carrot-and-stick, but I think, looking at some type of market signal or policy certainty, as well, I think will be really important to help grow the industry.

And I said this before, as well. I think really looking at how government and industry can collectively partner on this. So, you know, I think there's a lot of examples where the government’s doing a good job at listening to the industry and having us, you know, consulting on things. But I think that that really has to be lock, stock, and barrel. Not just on the clean fuel regs, but on any other policy and incentive work that's moving forward. Because if we don't kind of work on this together that we're not going to be able to have a robust, low-carbon fuel ecosystem, I don't think.

Francis Drouin
Thank you, Jasmine. And Andrea, I'm going to go over to you. So, just to, as a reminder of the question, it's the what drives the investment decisions to, for investment in the low-carbon economy in in Canada?

Andrea Kent
Absolutely. It's the same thing that I think drives investment decisions, really, really broadly. And you know, we're a group of NAFTA companies in an integrated market, with locations on both sides of the border. So, really you know, the decision-making matrix there is pretty consistent. It's what is the certainty in the market, what does that look like, how quickly can I de-risk the investments that I need to make, based on what that horizon looks like? So, you know, whether it's an incentive based program like some of the, the tax treatments that were announced in the latest budget, whether it's, you know, again, some of the goodies that were in in the US IRA. What does the timeline look like for that? And the last thing is, where can I differentiate myself and get the best buyback? And when you look at, I think, it from that lens, where Canada has to really, really be focused, and I think we're very ambitious in terms of what we want to do and the policies that we put in place.

But where we really, really can affect a ton of good, anchor and attract a load of investment, and keep it here, is I think, making sure that elements of our policies are based on accurate curbing accounting, that they reward good behavior that is being done, and de-risk that good behavior investments by companies like ours, and that serve as an anchor. So, you know, one of the things that the clean fuel regulation does is it sets up a market. So, we need to make sure that we do not inadvertently create dysfunctions in our own marketplace by, you know, putting too much emphasis on things that don't move the needle for investment, and, you know, inadvertently could penalize Canadian producers who are already going above and beyond. So, I'm looking for things that are going to, you know, really move that needle in terms of the market, make investment more attractive and sticky here from a Canadian producer standpoint, and also acknowledge the good work that's been done to date, so.

Francis Drouin
Thank you so much, Andrea. And Chris will be our final respondent because of time—and time always gets in the way, obviously. But Chris, I would ask you just to respond, and then I'll have to close it up here.

Chris Vervaet
Yeah. Maybe I'll just be really brief. I think my colleagues covered the question really well, and I'll just end where I started my conversation on agriculture. Such an exciting time to be in agriculture, and to link our sector with the low-carbon fuel supply chain, there's opportunities abound. But clearly, what we're hearing from everybody—and I would just like to underscore this—we have to make sure that we have the right policy and regulatory environment to make it all happen.

Francis Drouin
Thank you so much, Chris. And I want to thank all of you, the panelists, who were there to answer the questions, and we were able to integrate some of the audience’s questions into our questions. So, thank you so much. And it’s certainly been enriching for me, personally, to learn how the sector is working together, and to understand the full potential of what we have here. And to ensure that—for me, what's important is getting the practical regulation slide, so I certainly took some notes. Thank you so much. Jenna, over to you.

Note of Appreciation & Closing Remarks by Jenna Donelson
Thank you, Francis. And I couldn't agree more; a very enriching conversation. So, thank you to our panelists for that. I have a few thank you’s to close up with. I'd like to thank our Fuel for Thought, virtual event series partner, which is the Canadian Fuels Association—we're so thrilled to be working with you again—and also our sponsors for this event, Bruce Power, Hydro One, and TELUS. And of course, I think all of our panelists deserve an additional thank you. And for our participants, I'd like to thank you for joining us today as well.

As a club of record, the Empire Club of Canada events are all available to watch and listen to on demand on our website. The recording of this particular event will be available shortly, and everyone who's registered for this event will receive an e-mail with the link once it's live. As far as upcoming events go, on Thursday, April 13th—so, this coming Thursday—at the Arcadian Court in Toronto, we are welcoming to the podium the Honourable Monte McNaughton, Ontario's Minister of Labour, Immigration, Training, and Skills Development. He's coming to our podium to discuss the Working for Workers bills and building in Ontario that leaves no one behind. So, if you are in Toronto, I think there are a few seats left for that, get your tickets. If you are not, please join us online like you did for this event. And with that, I'd like to thank all of you for joining us today. This meeting is now adjourned. Have a great day, everyone.