The demand for ethanol by Ontario gasoline refiners will continue to grow as a result of the Government of Ontario’s legislated target of all gasoline containing an average of 5 per cent ethanol by January 1, 2007 and a goal of increasing that to 10 per cent by 2010. The federal and provincial governments recognize this and offer federal and provincial subsidization for the construction of ethanol manufacturing facilities in Ontario. However, determining where to locate those new facilities and deciphering the process to be able to construct them is no simple task.
Once the difficult questions of proximity to rail and trucking transportation corridors, agri-feed producers, refineries and consumers are answered, and a logical site for the location of a biofuel manufacturing facility is selected, there are several planning and regulatory hurdles that must be overcome. The process of securing the approvals required from the local municipality, the regional or county government, the province and the myriad of other regulating agencies is time consuming and costly.
The goal is the issuance of a building permit providing for the construction of the manufacturing facility at the municipal and regional or county level. However, before that goal is ever in sight, numerous issues must be addressed, including compliance with the official plan and zoning by-laws, levels of air emissions and site plan approval.
An official plan sets out the broad planning concepts, which are envisioned for development in a municipality, region and county. Broadly speaking, land use is divided into several categories, including residential, industrial, commercial, green space and environmentally protected lands. Typically, lands designated for industrial use in an official plan would be those that would be available for a biofuel manufacturing facility. The local municipality will establish a zoning by-law, which provides for more specific uses within the broad scope of the official plans. It may be that certain industrial lands must be zoned specifically for use as a biofuel manufacturing facility.
If a desired location does not have the proper zoning to allow biofuel manufacturing use, the manufacturer will have to apply for a rezoning of the property. Applying for rezoning is often a lengthy, expensive process. Because local public consultation is involved in the rezoning process, it is imperative to make concerted and significant efforts to provide the public with sufficient relevant information to allay concerns which may arise with the news that a manufacturing facility is coming to the area.
The site plan approval process involves a review by municipal staff of the plans and specifications for the proposed manufacturing facility. This is an extensive and exhaustive review which will consider all aspects of the development of the site and construction of the facility, including services such as water, sanitary sewers, storm sewers, electricity, natural gas, storage and elimination of waste material, parking areas, landscaping and detailed plans for the construction of the building itself. This process will involve the participation of architects, engineers, landscape consultants, surveyors, municipal planners and construction contractors, not to mention lawyers.
The Ontario Ministry of Environment will also have its opportunity to kick the tires. Pursuant to Section 9 of the Environmental Protection Act any equipment, structures or processes, which may discharge a contaminant into the atmosphere must be approved before construction. This requirement is certainly broad enough to include a proposed biofuel manufacturing facility. The application for approval is made to the Environmental Assessment and Approvals Branch of the Ministry of Environment. The application is first reviewed for completeness, then it is reviewed by engineers to assess the compliance of the proposed equipment, structure or process with the EPA and applicable regulations and guidelines. If the application is approved, the EAAB will issue a certificate of approval. The EPA is quite clear – the plant or equipment may not be operated unless a certificate of approval is issued.
These requirements are by no means exhaustive of the regulatory hurdles which must be overcome in order to construct a biofuel manufacturing facility. Having the proper advisers in place from the start will certainly help in guiding the project to successful completion.
Leonard Rodness is a partner at Torkin Manes Cohen Arbus, LLP, Barristers & Solicitors, and head of the firm’s Commercial Real Estate Law Group. Reach him at (416) 777-5409 or lrodness@torkinmanes.com.