Ontario Boosts Required Levels of Ethanol in Gasoline: Could Spark New Investment into Rural Ontario

SOURCE: Canadian Press
http://www.theglobeandmail.com

Chatham, Ont. — Friday, Nov 26, 2004 — Gasoline sold in Ontario will have to be 5 per cent ecologically friendly ethanol by 2007, resulting in cleaner air and a job boost for the province's agricultural sector, Premier Dalton McGuinty said Friday.

New standards effective Jan. 1, 2007, would be equivalent to taking 200,000 vehicles off the road or reducing annual greenhouse gas emissions by about 800,000 tonnes, Mr. McGuinty said at Chatham's Commercial Alcohols Inc., Canada's largest ethanol plant.

It could spark as many as 3,000 new jobs and bring as much as $500-million in new investment into rural Ontario, including this southwestern Ontario community, he said.

“Ethanol is a cleaner-burning fuel, so this means cleaner air,” Mr. McGuinty said. “It's made from agricultural crops, so this will be a major boost for rural communities.”

Ethanol is a high-octane fuel additive made by distilling organic matter such as wheat, corn and straw. It is blended with conventional gasoline and results in cleaner fuel combustion and fewer emissions.

The 5-per-cent target can be met by producers' blending ethanol into gas or through the trading of renewable fuel credits. Fuel credits are built up by producers who exceed targets for production and can be sold to others who do not, to make up their shortfall.

Either way, a wholesaler's annual gasoline sales must achieve an average of at least 5-per-cent ethanol content.

The move addresses an election promise in which the Liberals pledged to make gasoline contain 10 per cent ethanol by 2010.

The ethanol level in gasoline is now about 2 per cent.

A 10-per-cent mandate would require the production of 1.5 billion litres of ethanol a year. The province would need at least three or four more plants to meet demand. A plant can cost up to $100-million.

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