Ontario's Biofuels Industry

Powering the future

The move is on to replace non-renewable, greenhouse-gas producing fossil fuels with renewable resources and Ontario—which uses more than 15 billion litres of fuel a year—is fast becoming a centre for biofuels research and production.

A Wealth of Biomass

• A successful biofuels industry requires available biomass and Ontario has an abundance, thanks to a diverse and competitive agriculture sector, a large forestry industry and substantial municipal and industrial waste.
• Ontario produces close to 50 Mt (million tons) of biomass a year, which has the potential to produce 70 TWhr (terawatt-hours) of energy.

Bottom line?
If you want to locate or expand your biofuels business, purchase or license biofuels products or technologies or conduct leading-edge R&D, look to Ontario. We have the skills, technologies and international experience to help you succeed.

[Spotlight NorWa Manufacturing and Distribution Co.]

Gerry Bugyra is primed for expansion. His company, NorWa Manufacturing and Distribution Co., produces environmentally friendly, clean-burning pellet fuel for residential and commercial markets. His mill, located in Wawa, Ontario, uses a punch-die system, which can take anything from wood and agri-waste to compost to produce the pellets. NorWa holds the world-wide rights to this exclusive technology which offers a number of advantages over the traditional ring-die system. It's compact—it can be housed in 3,000 square feet—portable, easily expandable, energy-efficient and emission free. "Wawa's been a great location for the development of this technology," says Bugyra. "We're in the centre of Ontario's forest industry, so there's plenty of biomass and there's efficient rail, truck and marine transport. We've also benefited from strong government support."

A Smart, Skilled workforce

• Developing and producing innovative "green" fuels demands highly educated workers—and ours are among the best in the world. They're also experienced in international alternative energy regulations.
• We have 44 universities and colleges with thousands of students enrolled in degree and certificate programs in environmental, chemical, civil, computer and systems engineering, environmental science, earth sciences and biology.
• Ontario has an extensive and focussed apprenticeship program and co-op training network that helps produce industry-ready workers.

An Innovative Environment

• There are hundreds of talented scientists at our universities and colleges engaged in alternative fuel research—and we're recruiting researchers from around the world.
• The Alternative Renewable Fuels Research and Development Fund supports research that keeps Ontario's industry at the forefront — and it's open to applicants outside Ontario if their research will provide significant benefits or a unique competitive advantage to Ontario's energy sector.
• Ontario offers one of the most generous R&D tax credit programs in the world because more R&D costs qualify. Tax credits can cut the after-tax cost of a $100 R&D expenditure to less than $41.

More Costs Qualify for Tax Credits In Ontario

	Ontario	United States
Wages and salaries	X	X
Capital equipment	X
Materials	X	X
Overhead	X
Contract expenses	X	65% to 75%

All figures are in US dollars unless noted.

Fact

In Ontario, the definition of R&D includes new product development, development of new or improved materials and manufacturing process improvements.

A Focus on Commercialization

• The Ontario government has committed an additional $160 million (Cdn) over four years to accelerate the growth of innovative start-up companies, including $24 million (Cdn) specifically earmarked for development and commercialization of alternative energy technologies.
• There are incubators, research parks and technology transfer offices throughout the province.
• The Centre for Energy, a division of the Ontario Centres for Excellence Inc., connects scientists with companies to commercialize research breakthroughs.
• We offer flexible, company-oriented terms that let firms acquire the rights to intellectual property developed at one of our public research centres.

A Positive Investment Climate

• Ontario's economy is forecast to outpace the U.S., U.K., France, Germany and Japan until 2008.
• We have low inflation and interest rates and a favourable exchange rate.
• Business expenses, including wages and benefits, payroll and corporate tax rates and utilities are cost-competitive and our streamlined regulatory systems— together with our first-class infrastructure—make it easier to establish a business in Ontario.
• Venture capital is available through companies like the Business Development Bank of Canada, Ventures West and FCC Ventures.
• The Ontario government's new $500 million (Cdn) Advanced Manufacturing Investment Strategy helps companies develop and use leading technologies. The repayable loans are interest-free for up to the first five years and cover up to 10% of the project's costs.

It's easier to establish a new business in Ontario, Canada

Country	Number of procedures*
Japan	11
Germany	9
Italy	9
France	7
U.K.	6
U.S.	5
Canada	2

* A procedure is defined as any interaction of the company founder with external parties, for example government agencies, lawyers, auditors, notaries. Source: The World Bank Group, September 2004 — Doing Business in 2005

[Spotlight Ensyn Technologies]

Companies all over the world are beating a path to Ensyn Technologies' door. They're interested in the Ottawa-based firm's Rapid Thermal Processing (RTP) technology, which turns discarded biomass like wood into valuable chemical and fuel products like bio-oil, which when blended with diesel and other petroleum fuels, produces "green" fuels. There are already six RTP plants in commercial operation in Ontario and Wisconsin and a seventh, Ensyn's largest, will be up and running in Renfrew, Ontario in the summer of 2006. "Ontario is a great location for an innovative company like ours," says Garth Gorsky, Vice President, Special Projects. "We've been able to develop our technology thanks to the government's supportive R&D environment that includes exceptional research centres and R&D tax credits."

A Government Committed to Increased Renewable Fuel Use

• By 2007 all gasoline sold in Ontario will be required to contain an average of at least 5% ethanol and a biodiesel standard is in development.
• There's no federal fuel tax on ethanol or biodiesel fuel in Ontario.
• The Ontario Ethanol Growth Fund (OEGF), is a 12-year, $520 million (Cdn) program, that provides capital for new or expanding ethanol plants, operating assistance to help manage fluctuating prices and support for independent blenders of ethanol.
• Sustainable Technology Development Canada (STDC) finances and supports the development of clean technologies, including ethanol and biodiesel, with its $550 million (Cdn) fund.

Market Access

• We're part of NAFTA (the North American Free Trade Agreement), which provides access to a market that's huge (420 million people) and affluent (GDP: $13.8+ trillion) and where products move freely across borders.
• Our land transportation network is linked to U.S. routes at 15 road, rail and marine crossings and the Great Lakes/St. Lawrence Seaway System links Ontario ports with markets in the U.S. and worldwide.
• Ontario has five international airports: Toronto's Pearson, Ottawa, London, Hamilton and Thunder Bay.
• We have same-day business access to North America and Europe and an evening overlap to Asia. Our cultural and business affinities smooth the way for international trade, investment and project partnerships.

[Spotlight Iogen Corporation]

There are only 180 people working at the Ottawa-based Iogen Corporation, but the company attracts interest from around the globe. Iogen is the world leader in the technology that is used to produce cellulose ethanol; which is one of the most cost effective ways to reduce the transport sector's greenhouse gas emissions and reduce its reliance on fossil fuels. The company operates the world's only demonstration-scale facility in Ottawa which converts agricultural residue such as straw — to cellulose ethanol using proprietary enzyme technology. And it will soon be building its first commercial plant. "Being located in Ottawa has been important for our success," says Executive Vice-President Jeff Passmore. "It has enabled us to get the profile we need to attract investment and the people we need to develop the company."

[Spotlight BIOX Corporation]

Oakville, Ontario-headquartered BIOX Corporation has developed a revolutionary new technology that makes it possible to convert any feedstock, including agricultural seed oils, animal fats and recycled cooking oils, into biodiesel fuel. And it does it cost-competitively, efficiently—the process takes less than an hour—and to European and North American standards for biodiesel fuel. BIOX's first commercial- scale production facility in Hamilton Ontario, which will be up and running in Spring 2006, will produce 60 million litres of biodiesel a year. "Hamilton is a perfect place for us to launch commercial production," says BIOX Director of Business Development Scott Lewis. "It's located in an industrial hub that gives us access to the feedstock we need, as well as efficient marine, rail and truck transport."

Fact

fDi (Foreign Direct Investment) magazine (part of the Financial Times Group) predicts Ontario will be the Canadian province of the future because of its skilled workforce, affluent local customer base, proximity to the U.S. market, lower business costs and excellent quality of life.

For more information about investing in Ontario, please visit our website: www.2ontario.com

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