July 18, 2005

Ethanol production receives $46M boost through federal program

In the second round of funding under its Ethanol Expansion Program (EEP), the federal government of has allocated an additional $46 million to support the construction or expansion of five ethanol plants across Canada. The five projects-three in Ontario, one in Manitoba and one in Alberta-were selected through a competitive process whose results were announced in Brantford, Ont by Agriculture and Agri-Food Minister Andy Mitchell.

The companies and projects receiving support through Round 2 of the EEP are as follows.

Commercial Alcohols will receive $15 million for a new plant in Windsor, Ontario. The facility will produce about 199 million litres of ethanol annually. Commercial Alcohols previously received a federal contribution for a facility in Varennes, Quebec. Once completed, this plant will be capable of converting 12 million bushels of corn into more than 120 million litres of fuel-grade ethanol per year. Company vice-president Bliss Baker noted that the Windsor project will incorporate a thermal oxidizer to eliminate any odours from the plant. More information is available from Bliss Baker at 416/949-0205.

Integrated Grain Processors Co-Operative (IGPC) has been allocated $11.9 million for a new plant in Brantford, Ontario. The new facility planned by IGPC, a co-operative of more than 500 farmers, business people and other community members, will produce 119 million litres of ethanol each year. IGPC chair Tom Cox noted that the federal assistance will help speed the financing arrangements for the project. More information is available from Tom Cox at 519/771-4476.

Power Stream Energy Services will use its $7.3-million in funding to convert the recently-closed Nacan starch plant in Collingwood, Ontario into a facility capable of producing 52 million litres of ethanol annually. The plant is expected to employ about 45 people when operational. Power Stream Energy Services is a Canadian energy risk management provider focusing on North America's deregulated energy markets. More information is available from executive director Curtis Chandler, 416/628-2828.

Husky Oil Marketing, based in Calgary, will receive $10.4 million toward construction of a plant in Minnedosa, Manitoba. The company already has an existing facility there which currently produces ten million litres of ethanol annually and was built in 1981. The new facility will produce an additional 130 million litres of ethanol each year. Husky also received a federal contribution for a facility in Lloydminster, Saskatchewan, which will also produce 130 million litres of ethanol annually. More information is available from Dennis Floate at Husky Energy, 403/298-6587.

Permolex has been allocated $1.1 million to expand its existing facility in Red Deer, Alberta. The plant currently produces 28 million litres of ethanol a year. The expansion will increase its capacity by 12 million litres annually, for a total of 40 million litres per year. Permolex is a grain processing facility producing food-quality flour and wheat gluten, as well as ethanol and high-protein animal food. The plant's design incorporates leading-edge technologies and processes. More information is available from president and CEO Doug MacKenzie, 905/330-5370 (Ontario).

These contributions are in addition to $72 million previously allocated to six other projects under the first round of the EEP. It is expected that by the end of 2007, projects supported under both rounds of the program will be producing a total of about 1.2 billion litres of fuel ethanol per year. 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 Canada's climate change target for ethanol production two years ahead of schedule. The government aims to have 35% of all gasoline in Canada contain a blend of 10% ethanol by 2010.

In addition, the $118 million in funding allocated under the EEP will generate nearly $1-billion in investment by 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 Ontario government's recently-announced requirement that gasoline sold in the province contain an average of 5% ethanol by 2007 (ELW July 4, 2005).

Ethanol is a renewable fuel that can be produced from grain or other plant material. Blended with gasoline, it reduces the greenhouse gas (GHG) emissions resulting from transportation. Any gasoline-powered vehicle manufactured since the 1980s can use gasoline with up to 10% ethanol, a fuel that is available at more than 1,000 retail stations in Canada.

In addition to projects that produce ethanol from grains such as corn and wheat, the federal government is working with industry to develop and commercialize new technology that produces ethanol from agricultural residues (including straw and corn stalks) and forestry byproducts. Ethanol produced with this technology is expected to result in even greater GHG reductions.

The EEP is part of Canada's renewable fuels strategy, which also includes support for research and development, exemptions from federal fuel excise taxes and consumer awareness activities. More information on the program and on renewable fuels is available on-line at www.vehiclefuels.gc.ca.

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