Group Pans ‘Policy Imbalance’ Faced by Canadian Ethanol Producers
The Canadian Farms & Fuels Alliance sent a letter Tuesday to the country’s minister of environment and climate change complaining about obstacles it said ethanol producers face.
“A year ago, the Prime Minister committed to fixing a policy imbalance that leaves Canadian ethanol producers competing at a disadvantage in Canada’s own market,” the letter to Julie Dabrusin stated. “A year later, Canadian corn growers and ethanol producers are still waiting for that commitment to be delivered.”
The group called for the government “to set the Clean Fuel Regulations (CFR) credit multiplier for Canadian-produced ethanol at a minimum of 1.4x, and to ensure draft amendments are published by Environment and Climate Change Canada by the end of 2026.”
The letter said that the “evidence is clear” that the country’s ethanol market is growing but that an increasing share of that growth is being captured by imports rather than Canadian production.
“The reason is a structural policy imbalance,” it added. “U.S. ethanol entering Canada benefits from meaningful production support under the 45Z Clean Fuel Production Credit while competing on equal terms with Canadian ethanol within the CFR.”
The U.S. is now on track to become a 1-billion-gal (4-billion-liter) ethanol exporter to the Canadian market, the letter noted.
“Without action, growing demand created by Canadian policy will increasingly support production, agricultural demand and investment outside Canada,” it claimed. “A minimum 1.4x credit multiplier for Canadian-made ethanol is a practical, targeted response.”
Such a move “recognizes the changed North American competitive environment,” the group added, “and gives Canadian ethanol a fair opportunity to compete for market share created by Canada’s own regulatory framework.”
The letter called the stakes faced by farmers “significant.”
“Ontario ethanol production accounts for one in three bushels of corn grown in the province,” it stated. “For consumers, ethanol is also delivering value: In 2024, ethanol blending reduced Canadian wholesale gasoline costs by an estimated 7.4 cents per liter.”
Canadian policy has created a growing market for ethanol, the letter noted.
“It’s time that Canadian farmers, producers and rural communities have a fair opportunity to grow with it,” it said. “With more than $1 billion in potential investment on the table, it’s time to modernize the CFR so Canada captures the economic value of domestic ethanol production alongside the carbon reductions the CFR already delivers.