CP Rail tests animal-fat, vegetable-oil biodiesel

OTTAWA (Reuters) - Animal fat, restaurant grease and vegetable oil will help power four Canadian Pacific Railway locomotives this winter to test if biodiesel fuel can stand up to a harsh Canadian winter.

The Canadian government, which plans to impose a 2 percent renewable fuel content in diesel and heating oil by 2011, will spend C$800,000 ($750,000) on the train trial, which runs from November to March and will blend 5 percent biofuel with the diesel.

Biodiesel reduces diesel's emissions of carbon dioxide, carbon dioxide, sulfur dioxide and particulates, while acting as a natural lubricant.

The test, the first of its kind in Canada, will examine the performance of four locomotives that run between Calgary and Edmonton in the province of Alberta, assessing if a 5 percent biodiesel blend has any significant adverse effects on the locomotives, or their reliability and maintenance.

"Rail is already the most efficient means to move goods long haul," CP Chief Executive Fred Green said in a statement. "This initiative positions CP to make a lasting impact by further reducing our network's environmental footprint."

Canada is likely to need close to 3 billion liters of renewable fuels under the 2 percent mandate, says Natural Resources Canada. That mandate hinges on the technical feasibility of using biodiesel in a range of Canadian conditions.

The government also plans to mandate a 5 percent renewable fuel content in gasoline by 2010.

($1=$1.06 Canadian)

(Reporting by Susan Taylor; editing by Janet Guttsman)