As Europe Battles Over Ethanol, Ontario Embraces Biofuels

Corn Farming

By Sam Eifling

December 5, 2013

As the European Union debates raising its legal limits for biofuel use, Canadian producers are steadfastly increasing biofuels production, in part to move Ontario fully off of coal power.

The European Commission is trying to settle on a cap for crop-based biofuels that would appease the producers lobby. The EU last year set a 5 percent cap among all transport fuels. That figure, though, was half of what the EU approved just three years earlier, as a target for 2020.

The current proposal would raise the target portion of such fuels to 7 percent of overall demand — a potential compromise between producers and those who see agricultural biofuels driving up food and land prices while providing little benefit for the climate. Reuters quoted Mark Olivier Herman, a biofuels expert at Oxfam, saying that a higher portion of biofuels would drive "further hunger, land-grabs and environmental damage."

But investors who entered the market expecting a 10 percent share toward biofuels are chaffing at a cap of only half that total. Any changes are not likely to pass until 2015, Reuters reported.

Such regulatory uncertainty seems a distant concern in Canada.

With Ontario, the country's most populated province, determined to become the first area of its size in North America to wean itself off of coal power, biomass plants are expected to fill much of the deficit.

The key move in that plan is shutting down the coal-burning capacity of Nanticoke Generating Station, the largest coal-fired power plant in North America. That drawdown has been years in the making, but with the end of coal also at the Thunder Bay Generating Station in the next year, and its conversion to biomass, Ontario Premier Kathleen Wynne called Ontario's switch from coal to renewables "the strongest action being taken in North America to fight climate change."

She made those remarks during a recent event in Toronto at which Al Gore praised the province's power initiatives: "Ontario has distinguished itself as a leader in Canada and around the world."

In such an environment, investors in the province are understandably bullish on ethanol. By the end of the year, Ontario-based Energentium expects to have its new plant in Brampton fully online, converting beverage and vegetable waste into 15 million litres of ethanol per year.

Further, the Globe and Mail reported in a profile of Ken Field, the chair of Canada's largest ethanol producer, that his Greenfield Specialty Alcohols Inc. is pushing ahead into cellulostic ethanol, "including next-generation biofuels made from agricultural wastes." To the critics of ethanol, the paper reported, Field retorted that the fuel displaces foreign oil imports and cuts cars' greenhouse gas emissions.