Biofuels industry gaining momentum

Investment in Canada’s capacity to produce renewable transportation fuels is a key part of the federal government’s strategy to promote a cleaner environment, foster new economic opportunities for the agriculture industry, and ultimately decrease dependence on crude oil as a feedstock for gasoline.

Spearheaded by the federal ministers for the environment, energy and agriculture, the initiative was launched in May 2006 when the Honourable Rona Ambrose, Minister of Environment Canada, announced that by 2010 all fuel sold at the pump must have an average five per cent biofuel content. The new standard is part of a national renewable fuels strategy lead by the Government of Canada in cooperation with the provinces, territories and industry.

What are biofuels?

Biofuels are liquid fuels made from organic materials such as grains, oilseeds and animal fats. The two most commonly used biofuels are ethanol and biodiesel.

Ethanol is manufactured from organic matter rich in sugars, starch or cellulose. The dominant feedstock for fuel ethanol production in North America is corn, but almost any material containing cellulose, starch or sugar can be used to produce ethanol with existing technology. It is most commonly mixed with gasoline to improve emission quality and enhance performance by increasing the octane level of the fuel.

Biodiesel is derived from animal fats, waste vegetable oils, and crops such as soybean, canola, corn and sunflowers. It is most often blended with conventional diesel fuel to reduce vehicle emissions

Brazil is the world’s largest producer and consumer of fuel ethanol, although the United States may soon surpass Brazil’s production rates. Brazilian ethanol is produced either directly from sugar cane or indirectly from sugar cane molasses. Ethanol is produced by more than 300 facilities in Brazil, with two-thirds of them tied into sugar mills. In 2004, Brazil produced 15.3 billion litres of ethanol.

In Canada, use of ethanol as a component of gasoline began in 1981 when some retailers in Manitoba began marketing ethanol-blended fuels. By 1987, approximately 250 service stations in the four western provinces offered ethanol-blended fuels. In 1992, ethanol fuel was introduced in some Ontario markets and in 1995 some Quebec retailers began to offer ethanol-blended gasoline. According to a 2004 report prepared for Natural Resources Canada, approximately 1,400 service stations in six provinces sell ethanol-blended gasoline

In 2004, Canada produced 245 million litres of ethanol, up 20 per cent from 2003 production of 204 million litres. Canada’s ethanol industry is small and diversified – the same five facilities operating in 1999 were still the only plants operating in 2004.

In 2003, the federal government announced the Ethanol Expansion Program with the aim of expanding fuel ethanol production and use in Canada and reducing transportation-related greenhouse gas emissions. First round program allocations amounted to $78 million and were directed to commercial projects planned in Quebec, Manitoba (subsequently cancelled), Saskatchewan, British Columbia and Ontario. New production plants now under construction will triple supplies over the next few years, reports Natural Resources Canada’s CANMET Energy Technology Centre (CETC).