The government of Ontario announced last week proposed changes to provincial biofuel regulations, which include doubling the 5% ethanol mandate to 10% by 2020, the U.S. Grains Council (USGC) reported.
“The recently announced Ontario policy proposal to double the provincial ethanol mandate to 10% is a positive development supporting Ontario in meeting its Climate Change Action Plan,” USGC president and chief executive officer Tom Sleight said. “Increased blending of ethanol will have real, positive impacts in supporting Ontario’s greenhouse gas (GHG) emissions reduction targets of 15% by 2020 and longer-term reduction targets as well as supporting the broader Canadian goal of reducing GHG emissions by 30 megatons by 2030.”
According to USGC, Canada currently has a national 5% ethanol mandate and is also reviewing policy, on the federal level, related to renewable fuels in terms of reducing GHG emissions.
“Across Canada, various provincial mandates - like the one proposed in Ontario - can require higher blending rates beyond the federal mandate,” USGC explained. “Ontario has over-blended its 5% ethanol mandate, ranging from 7% to 8% between 2012 to 2017, based on the societal and economic advantages of blending ethanol.”
Since Ontario represents roughly 38% of total gasoline use in Canada, making the province a major transportation hub, USGC pointed out that doubling the mandate reflects the potential for increased ethanol demand overall across Canada.
“Globally, countries are increasingly looking to ethanol as they seek to meet their Paris Agreement commitments as well as individual country objectives to reduce GHG emissions,” Sleight said. “The proposed doubling of the blending rate in Ontario is another example of the opportunity for greater blends of ethanol to help achieve these objectives.”
Based on projected fuel use in Ontario, an increase from the current industry blending standard of roughly 8% to the proposed 10% mandate would significantly increase demand for ethanol in the province from 326 million gal. (116 million bu. in corn equivalent) in 2016 to 405 million gal. (144 million bu. in corn equivalent) in 2021.
USGC said the proposed mandate would also provide additional advantages from increased ethanol use beyond the GHG emissions reductions, including the associated health benefits of improved air quality and the economic benefits of ethanol as a cost-competitive source of octane.
“The council jointly filed comments with Growth Energy to the government in Ontario in March 2017 to support the use of ethanol as the best and most cost-effective way to reduce GHG emissions associated with gasoline. A comment period on the proposed mandate in Ontario is now open in addition to discussions on how to move forward on the level,” USGC said.