Sustainable Development Technology Canada

Societies respond collectively to opportunities or threats only when there is a shared set of values. We are beginning to see, around the globe, such a shift in values evolving to protect the environment.

Taking action

has a strong role to play in society’s response to the pressing needs of the environment. Taking action requires a combination of behavioural change and the adoption of new technologies. Once the desire for change is present, technology can serve as an enabler and to effect real change, society requires accessible, reliable and cost-effective products and services to use. The energy savings from an energy efficient light bulb are not realised unless one is motivated to buy, install and use it.

Technologies that allow society to become more sustainable are critical in the climate change equation. Beyond making more efficient use of resources and reducing greenhouse gases (GHG) and other harmful emissions, these technologies enable industry to achieve greater productivity, lower operational costs, and higher profits. These technologies therefore increase productivity while protecting our environment.

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Canada’s economy has similarities to many developing world economies as it is primarily resource-based and clean technologies touch on all facets of its economy. In the short term, we are working on more efficient means of production from traditional industries like conventional oil and gas and pulp and paper. In the longer term, we are trying to replace a carbon-centred economy with one less so. For example, Canada holds world-leading intellectual property on biofuels production. Biofuels, produced from the waste residues of crops and animals, are the beginning of a movement to bio-refineries and a bio-based economy.

This shift from petro-refineries to bio-refineries not only has farreaching environmental benefits, but also moves Canada from its resource-based economy up the value chain to higher-valued products and services.

Sustainable Development in Canada

In order to enable these types of clean technologies to develop in Canada, the Government of Canada created Sustainable Development Technology Canada (SDTC) in late 2001. It is a not-forprofit foundation designed to finance and support the development and demonstration of sustainable technologies which provide solutions to issues of climate change, clean air, clean water and clean land. Drawing from an investment fund of C$550 million, the Foundation’s portfolio of clean technology solutions under management was valued at over C$846 million as at 31 December 2006.

In the most recent federal budget, SDTC was allocated an additional C$500 million to support the establishment of large-scale facilities for the production of next-generation biofuels.

SDTC’s primary task is to act as a catalyst in building a sustainable development technology infrastructure in Canada. It views Canadian solutions as having not only a role in providing economic, environmental, and health benefits to Canadians but also in providing solutions for other nations to consider as they work to reduce their own GHG emissions.

Investing

Canada invests heavily in many areas of clean technology innovation and are making great strides in hydrogen fuel cell, advanced lighting, carbon sequestration, and biofuel development. One such project in the biofuels area is the SDTC project led by BIOX Canada Ltd. BIOX is developing and demonstrating a technology designed to convert any seed oil, recycled cooking oil, or animal tallow and fat into biodiesel. Its process is faster than existing solutions and produces the biodiesel at near-ambient temperatures. This has the advantage of lowering production costs considerably, to a point where biodiesel can be competitive with petroleum diesel.

By reducing production costs, BIOX has turned a page in traditional biofuel production. Many renewable fuel sources, be they cellulose or starch-based, still cost more than their hydrocarbon-based counterparts. While the use of these biofuels can be environmentally sound, it is not always economically sound. BIOX and others aim to solve this with competitively priced sustainable solutions.

The Innovation Chain

There are many links in the innovation chain between the starting point when an idea is born, its preliminary research is completed and the moment the end product reaches market. Any link in the chain can introduce insurmountable technological, business or market hurdles that cause the project to fail, but two links are known to be particularly critical. Development and demonstration – when technologies exit the laboratory and begin to prove themselves in full-scale, real-world test situations – are unfortunately also the stages that traditionally lack financial and business support.

There is a global need to fund companies as they move through these critical stages because successful projects not only help nations retain their intellectual capital, but also fuel national economies, since much of the work is done locally.

One such example is Ottawa-based Group IV Semiconductor Inc which is developing and demonstrating an innovative lighting solution. The vast majority of today’s lighting is produced by incandescent bulbs. They are extremely inefficient, producing far more heat than light. More than 90% of the energy used by an incandescent bulb is emitted as heat. The global lighting industry is at a crossroads. The most energy-efficient solution (solid state lighting, SSL) uses semiconductors to produce light rather than filaments or gas, however they are also the most expensive to produce. Adoption of SSL is unlikely, especially in the developing world, if the replacement bulb is many, many times more expensive than its incandescent alternative.

From a purely economic standpoint, using silicon as the light emitter in an SSL makes the most sense since it is a cheap, well-understood element. The problem was that silicon-based SSLs never produced a clean white light. That is, until Group IV’s breakthrough research proved it could be done.

The company looked to SDTC to help bridge the funding and knowledge gap between its research and eventual commercialisation. SDTC helps Group IV, and companies like it, to design and implement a business plan as well as bring other partners into the project consortia. The majority of SDTC’s project consortia is led by small to medium-sized businesses, the driving force behind innovation in the global economy.

Filling the Funding Void

Unfortunately, helping to develop and demonstrate technologies does not get them all the way to market. Commercialisation requires private sector investment. From an investor’s standpoint, these clean technology projects will increase profitability and create strong returns. While broader in scope and application, the clean tech investment opportunity could be compared to the biotech industry some 15 years ago.

Like any new “hot” sector, these technologies have inherent performance risks which need to be mitigated in a way to attract downstream private-sector investment.

SDTC does this by employing a stringent due diligence process when selecting technologies to support, and by actively strengthening the business proposition. It requires every project to involve representatives from the entire supply chain necessary to take the technology to market. These partners vary according to the differing products and markets and may include researchers, product developers, manufacturers, distributors, retailers, and end customers. These partnerships reduce the risk of failure and increase the likelihood that private-sector funds will become available.

Helping clean technology successfully run the gauntlet from research and development, through to project demonstration and commercialisation is a complex undertaking. From conception to completion, the clean technology market needs participation from the entire economic supply chain to gain market traction internationally.

SDTC’s model is designed to marry together wide-ranging pubic/private partnerships. As such, the organisation works very closely with everyone from private sector investors, both equity and debt, and industry associations, to businesses and government organisations which strengthens the overall economic model.

Striving For Real Results

Without funding assistance – and the ability to tap into outside strategic and developmental counsel – there is the real possibility that Group IV, BIOX, and countless other companies would have a much tougher time succeeding in today’s highly competitive markets.

The benefit of success can be measured in many ways, be it job creation or reducing our need for non-sustainable fuel sources. From an environmental perspective often the simplest measurement is to note the reduction in GHGs produced if a particular technology succeeds. In Canada alone, adoption of Group IV’s lights would see an immediate reduction of GHGs emitted into the atmosphere each year.

Organisations like BIOX are part of a sector that also shows great promise. Biofuels have the potential to shift the global energy paradigm. Most nations import fossil fuels, but as biofuels gains traction, fewer nations will need to import fuel and can instead grow it. This not only reduces their reliance on foreign oil and reduces the environmental impact of its transportation but also stimulates and expands local economies.

As we move forward, this should be the ultimate goal – a world no longer grouped into nations of clean technology haves and have-nots. Instead each country should have at its disposal the solutions that best suit its needs and desires.

With the release of the report “Mitigation of Climate Change”, the Intergovernmental Panel on Climate Change (IPCC) Chair Rajendra Pachauri said, “It’s probably naïve to believe that merely developing technology in labs and in workshops would be the answer. Unless there is a package of policies, unless there are market forces, we are not likely to get a major dissemination of technology no matter how meritorious and desirable they may be.” In each of our nations, there exists the ability to participate in and aid the growth of a global clean-technology economy.

W: www.sdtc.ca