Ethanol in Canada

Canada's capacity to produce renewable transportation fuels is set for another substantial increase following the announcement of a second round of funding under the Government of Canada's Ethanol Expansion Program (EEP).

The Government of Canada has allocated a further $46 million for the construction or expansion of five ethanol plants across Canada.

Under round 2 of the EEP, Commercial Alcohols has been awarded $15 million for a new plant in Windsor, Ontario, Husky Oil $10.4 million to build a plant in Minnedosa, Manitoba, Integrated Grain Processors $11.9 million for a new plant in Brantford, Ontario, Permolex $1.1 million to expand its existing facility in Red Deer, Alberta and Power Stream Energy Services $7.3 million to convert a recently closed starch plant in Collingwood, Ontario.

$72 million was previously allocated to six other projects under round 1 of the Ethanol Expansion Program.

Projects supported under both rounds of the Ethanol Expansion Program expect to be producing a total of about 1.2 billion litres of fuel ethanol per year by the end of 2007.

This would bring Canadian production to approximately 1.4 billion litres per year, seven times what it was prior to the launch of the program, and enough to meet the Government of Canada's climate change target for ethanol production two years ahead of schedule.

This target is to have 35% of all gasoline in Canada contain a blend of 10% ethanol by 2010. Additionally, the $118 million in funding the Government of Canada has allocated under the EEP will result in close to a $1-billion investment from the companies involved in the projects.

The three projects in Ontario, combined with the projects that were allocated contributions under Round 1 of the EEP, are expected to increase ethanol production in the province to almost 800 million litres per year. This is enough capacity to meet the requirement, announced by the Government of Ontario, that gasoline sold in the province contain an average of 5% ethanol by 2007.

In addition to these projects that produce ethanol from grains such as corn and wheat, the Government of Canada is also working with industry to develop and commercialize new technology that produces ethanol from agricultural residues (including straw and corn stalks) and forestry byproducts.

The $118-million Ethanol Expansion Program is one part of the Government of Canada's renewable fuels strategy that also includes support for research and development, exemptions from federal fuel excise taxes and consumer awareness activities.