Renewable fuel standards seen as key for future of low carbon fuels in Canada

In Canada, the government’s existing ethanol blend mandate has played a key role in reducing the carbon intensity in gasoline, while providing market access and economic stability for Canada’s ethanol industry. Maintaining Renewable Fuel Standards can be an integral part of Canada’s transition to a low-carbon future, according a new Conference Board of Canada report.

The climate benefits of ethanol blending are clear and well documented. Greenhouse gas emissions from the use of Canadian-produced ethanol are as much as 60 per cent lower than from gasoline use. Current estimates demonstrate that ethanol blending in 2013 reduced Canada’s gasoline-related GHG emissions by at least 2.1 megatonnes.

The report, Renewable Fuel Standards Within a Low-Carbon Fuel Strategy, examines the role of blend mandates in a Clean Fuels Standard strategy. It finds:

• • Blend mandates provide market certainty and a stable investment environment for expanded domestic ethanol capacity and continued technology development. The blend mandate sets a minimum ethanol requirement, which reduces competitive pressures a new ethanol plant will face. However, ethanol producers still compete against imports and each other.
• • Renewable fuel standards ensure market access for renewable fuels.
• • Blend mandates ensure the societal benefits of ethanol continue. Ethanol is made from renewable resources and reduces GHG emissions by more than 60 per cent relative to gasoline. It is also the lowest-carbon source of octane for gasoline blending and contributes to meeting tighter Clean Fuel Standards targets.

Funded by Renewable Industries Canada, Renewable Fuel Standards Within a Low-Carbon Fuel Strategy is the first briefing in a six-part series that examines the economics, emissions, technologies, and societal impacts of Canada’s ethanol industry. The second briefing, which will released in the coming months, will focus on ethanol’s contribution to sustainability and a circular economy.