Ethanol regulations

There are 12 ethanol producers in Canada spanning the country from the Prairie Provinces to Quebec. Doesn’t sound like very many, does it? Maybe not, but these companies are responsible for the production of 1390 million litres a year (MMly) of ethanol. 

From the corn-based ethanol plants in Ontario to the wheat and corn plants in the Prairies, the diversity of raw material reflects the availability of local materials. The smallest of the country’s producers, the Iogen Corporation located in Ottawa produces a mere 2 MMly. The country’s largest producer of ethanol is GreenField, whose four plants in Ontario and Quebec produce a total of 496 MMly. 

Why is this important? 

Recent government regulations are requiring refiners to include at least 5 per cent ethanol in their gasoline by September 2010. This 5-per-cent increase would create a market for approximately two billion litres of ethanol annually, a substantially higher volume than what Canada is currently churning out. 

Building new plants and creating jobs sounds great, but there’s a catch: ethanol can be as ‘dirty’ as gasoline. The biofuel industry has been highly controversial because deforestation and increased land cultivation are causing increased greenhouse gas emissions. 

All Canadian producers use natural gas in their production process, which cause fewer emissions than coal-fired ethanol, which actually creates 34 per cent more emissions per gallon of fuel than gasoline producers over a 30-year period. 

The Canadian government claims that grain-based biofuels can reduce emissions by 40 per cent compared to gasoline. But Natural Resources Canada’s calculations do not include indirect land use emissions. 

Over the longer term, as the one-time impacts of greater land cultivation fade, it is estimated that corn ethanol using natural gas will produce 16 per cent fewer emissions than gasoline. 

So is it worth it? Only time will tell.