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CAN (ON): "Cap and trade could cost as much as $8,684/ha"

Cap and trade is a hot issue among Ontario's greenhouse growers. What will it cost them? And are there alternatives, apart from moving to another province or even another country altogether? Ecostrat explores the issue in a new white paper:

"In 2015, there were more than 223 vegetable and 400 flower greenhouse operations making Ontario the largest greenhouse producer in Canada. Area wise, Ontario constitutes about 61% of the entire Canadian greenhouse industry (total area = 21,379 m2) with a total area of 12,989 m2 (3210 acres). Most of the greenhouses located in southwestern Ontario use natural gas for heating. It is widely believed that the cap-and-trade program will significantly increase the natural gas bills for greenhouse businesses starting 2017.

"The Ontario Greenhouse Vegetable Growers (OGVG) estimate that due to cap and trade it will cost greenhouse growers, on an average, an additional $6,200/acre to heat their greenhouses which equates to an additional $80,000 for the average farm of 13 acres. Our calculation shows that this could be as high as $8,684/ha. In 2017, the annual additional expenditure for the Ontario greenhouse industry due to cap and trade could be approximately 26.5 million dollars. Going forward this cost can be expected to increase significantly to meet the Pan Canadian mandate of achieving an annual increase of $10 per tonne carbon emissions with a goal to reach $50 per tonne by 2022."

Biomass as alternative?
"Rising fuel costs due to cap and trade program may make burning alternate fuels an attractive option for greenhouse growers. Biomass heat and power is an increasingly attractive option for them as increasing oil prices, carbon taxes, and emissions targets are becoming more prominent. In 2014, across Canada, there were 52 operating greenhouses with biomass energy systems, 37 of which were using biomass for energy and six in planning stages. In Ontario, 19 growers are known to be using biomass. It has been estimated that, even without considering the implications of cap-and-trade, Ontario producers could reduce annual fuel costs by 41-64% if they switched to biomass heating.

"This study states that, across Canada, around 2545 greenhouses (in the year 2006) could reduce annual fuel costs between 33%-60% by switching to agricultural and woody biomass fuels saving greenhouse producers up to $200 million annually.

"When biomass is used instead of fossil fuel (e.g. natural gas) we avoid the increases in atmospheric CO2 as bio resource is part of nature’s cycle and growing trees store carbon or remove it from the atmosphere, offsetting the release of carbon from the use of the wood resource."

Download the full white paper here.

Publication date: 3/17/2017



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