Articles related to environmental policy

Alberta’s energy diversification should focus on converting energy into manufactured products and adding value to natural gas

On March 20, CIAC President and CEO Bob Masterson, along with the Chairs of the Association’s National and Alberta Business & Economics committees – Mike Burt, Dow Chemical, and Corinne Dueck, MEGlobal – appeared before the Energy Diversification Advisory Committee in Edmonton to deliver recommendations on adding value to Alberta’s energy resources. 

CIAC agrees with the Alberta government’s long-term vision for economic diversification and believes that moving up the resource value chain with value-added resource processing is integral to achieving this goal. Specifically, CIAC believes the natural gas value chain is ripe for further investment given the abundance of liquids rich natural gas resources in the Western Canadian Sedimentary Basin.

Investment in value-added resource processing can also help smooth the boom and bust cycle of resource revenue to the province as the chemistry sector often runs countercyclical to the resource sector providing high paying jobs and needed investment when resource prices are low.

To help attract investment, CIAC is encouraged by the Alberta government's use of the Royalty system through the Petrochemicals Diversification Program. CIAC recommended that further support in the form of 100 per cent accelerated capital cost allowance at the federal and provincial levels as well as additional targeted support from all levels of government – federal, provincial, and municipal – be considered to overcome the investment advantages found in competing jurisdictions such as the U.S. Gulf Coast.

We encourage you to read CIAC’s full submission to the Energy Diversification Advisory Committee and to view the presentation given by Mr. Masterson. 

CIAC seeks an exemption for industrial uses from the Clean Fuels Standard proposal

In late 2016, the Minister of the Environment and Climate Change Canada, Catherine McKenna, announced the government’s intention to introduce a Clean Fuel Standard (CFS). Since then, the Chemistry Industry Association of Canada (CIAC) has been engaged with the government through the stakeholder consultation process.  

The goal of the proposed standard is to achieve a 30 megatonnes of annual reductions in greenhouse gas (GHG) emissions by 2030. At the end of February, the government distributed a focused discussion paper to support their work on establishing the scope and key attributes of the regulation. That discussion paper can be found at: http://www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=D7C913BB-1.

There are both competitiveness issues relating to the potential costs of this regulation, and potential technical barriers to its implementation. There is also an issue on the interplay of this proposal with several other GHG and air quality regulations which are in various stages of development. It not clear how this regulation will interrelate to other GHG regulations, provincial cap and trade requirements and the establishment of the national carbon price.

As it stands right now, CIAC is engaged with other industrial sectors on a position seeking an outright exemption for industrial uses from the CFS proposal.

The government has a robust consultation plan, and they expect to have a draft regulation in place mid-2018, with a final regulation expected for mid-2019.

CIAC’s Masterson to Senate: bad news if we don’t get greenhouse gas management policies right.

On February 28, Bob Masterson, CIAC President and CEO, and David Podruzny, Vice-President Business and Economics, appeared in front of the Senate Committee on Energy, the Environment and Natural Resources to discuss greenhouse gas reduction policies. This appearance was a follow up to a meeting held last fall and the first since the committee toured several member sites in Sarnia in November.

During his opening remarks (available on video here), Masterson conveyed four key messages:

  1. The chemistry industry is a fast moving industry expected to reach 6 trillion per year globally by 2020.  Chemistry is the key solutions provider for many of the worlds sustainability problems.

  2. There are many different pathways to produce high-volume industrial chemicals. This has implications for greenhouse gas emissions as one moves further along the hydrocarbon molecule chain.
  3. Canada has some of the lowest carbon feedstocks on earth which, when combined with a largely decarbonized electricity sector and burgeoning biochemical industry, provides us an opportunity to become a global leader in low carbon chemical production.
  4. The path Canada is on will result in under-utilization of Canada’s low carbon chemistry feedstocks and an otherwise over-utilization of higher carbon feedstocks from other jurisdictions to meet global chemistry demand.  This is poor public policy. 

The appearance included an hour-long question and answer period with the committee members, which gave Masterson and Podruzny the chance to further expand on the chemistry industry’s message. Both worked to convey that Canadian produced chemical products are part of the answer to the world’s most pressing sustainability problems, including climate change, and that new investments in the sector will help reduce the inefficient and dated use of resources in other parts of the globe. 

As the committee moves closer to making their recommendations, Masterson asked them to carefully consider the cumulative policy burden Canadian chemical producers are being asked to shoulder. Failure to do so would be bad for business, bad for workers and the communities in which we operate, bad for Canada’s trade balance and its future economic prospects and, ultimately, bad for global greenhouse gas emissions.

CIAC members reduced the global-warming potential of their operations by 68 per cent

Responsible Care®, the Chemistry Industry Association of Canada’s U.N.-recognized sustainability initiative, motivates its members to take actions that advances the sustainability of their operations and reduces harm throughout the entire life cycle of their products.

For more than 20 years, as part of the commitment to Responsible Care, CIAC members have been driven to improve and publicly report on key indicators including emissions data, workplace and transportation safety, community engagement, and waste reduction.  This year’s annual Responsible Care Sustainability Indicators Report is now available.

This report marks the eighteen-consecutive year that the association has transparently published its emissions. CIAC members report their emissions via the National Emissions Reduction Masterplan (NERM) and Environment Canada’s National Pollution Release Inventory (NPRI). 

“CIAC members have made remarkable progress towards improving air and water quality, reducing greenhouse gases, and conserving resources,” said CIAC President and CEO Bob Masterson. “This report shows how our members are dedicated to the betterment of society, the environment and the economy.” 

The Responsible Care Sustainability Indicators found that since 1992, CIAC members have:

  • reduced discharges to water by 97 per cent;
  • reduced emissions of toxins targeted by the Canadian Environmental Protection Act by 86 per cent; 
  • substantially reduced emissions of air pollutants such as nitrogen oxides (by 63 per cent) and sulphur dioxide (by 90 per cent); 
  • reduced the global-warming potential of their operations by 68 per cent; and
  • reduced the number of injuries and illnesses at their workplaces by 86 per cent.

The annual Responsible Care Sustainability Indicators Report is available here.

Canada needs more chemistry

Bold leadership is needed to attract and win new investments

The flurry of consultations by various departments over the past summer was a clear indication that the Government of Canada is focussing on low carbon, innovative, economic growth.

An effective innovation strategy should foster the development of products, services and industries that can best capitalize on the natural resources and talent that already exist in our country. The chemistry industry is well positioned to deliver on these expectations, if Canada can build and maintain a competitive, long-term investment environment.

Written off as a mature industry decades ago, North America’s chemistry industry has experienced a dramatic resurgence following the advent of abundant, low-carbon feedstock associated with the shale gas revolution. Today, more than 270 projects are being tracked totalling over $250 billion in new investments, with more than 600 additional investments in the downstream plastics sector. This makes chemistry the fastest growing manufacturing sector in North America and the poster child for reshoring manufacturing.

This new feedstock means chemistry facilities can operate with half the energy demand and half the greenhouse gas emissions compared to older facilities fuelled by crude oil. Moreover, compared to coal-fed chemistry processes in China, this abundant and advantageously priced feedstock provides a ten to one energy and greenhouse gas advantage – to make the same finished product. The economic and environmental advantages of shale gas feedstocks are so great that European chemistry operations are now being retrofitted to receive feedstocks imported from North America.

This rapid re-tooling and expansion is a testament to the industry’s commitment to innovation, to adopting cutting-edge technologies, and to the reduction of carbon emissions. Other factors reinforce this view.

It is not a widely appreciated that more than 95 per cent of all products manufactured today rely on chemistry. Addressing the challenges of clean energy, air and water, and a sufficient supply of safe and nutritious food on a global scale is entirely dependent on chemistry-based solutions. From improved building insulation to lighter plastics for automobiles, and the production of solar and wind energy equipment, innovative chemistry products and processes are essential in helping society meet its needs while reducing its carbon emissions.

While there have been some important investments in recent years in Ontario, and Alberta is poised to attract additional investments, Canada has not kept pace with growth in the U.S. Based on historical patterns, Canada should have attracted $25 billion of new investment. Instead, only about one tenth of that has found its way here.

The good news is Canada is at least making the short lists for companies considering North American investments. Canada has market and feedstock access and has taken some measures to improve the country’s fiscal competitiveness with the 10-year extension of the accelerated capital cost allowance and lowering corporate tax rates. But, more is needed to create the winning conditions for investments. In the end, it is a winner takes all game.

By recognizing opportunities, partnering closely with the provinces and working to further strengthen the country’s investment climate, Canada can position itself as a destination of choice for sustainable investments.

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