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Canadian Ethanol Production to Increase in 2013

05 July 2013
USDA Foreign Agricultural Service

CANADA - Since December 15, 2010, Canada has had a federal mandate requiring five per cent of the national gasoline pool to be renewable (ethanol). In addition, many provinces have equivalent or higher provincial mandates, including a five per cent renewable content mandate in Ontario, 7.5 per cent in Saskatchewan, and 8.5 per cent in Manitoba.

In 2013, these provinces alone are expected to make up about 86 per cent of Canada’s overall ethanol production. British Columbia and Alberta account for approximately a quarter of net national gasoline sales, but are expected to make up only 4 per cent of Canada’s overall ethanol production in 2013.

Ethanol production in Canada will increase in 2013 to an expected 1,979 million liters, slightly up from 2012, and is forecast to grow further to 2,006 million liters in 2014. Due to the fact that this does not surpass the federal content requirement, which Post estimates as 2,269 million liters for 2013 and 2014, imports are expected to continue to increase to fulfill federal and provincial renewable content requirements.

The national fuel ethanol production capacity for 2013 and 2014 is estimated at 1,802 million liters, and national capacity use is estimated at 99 per cent in 2013, up from 96 per cent in 2012 and only 75 per cent in 2011. Primary feedstocks remain corn and wheat. However, small production levels of cellulosic ethanol from wood waste and municipal solid waste exist and are being developed by Enerkem. Atlantic Canada is also looking into future possibilities of cellulosic ethanol production, details of which will be announced in the near future.

Canada’s limited biofuels production, both in the short and medium term, suggests that Canada will not soon become a major player in the global ethanol market. While domestic supply in Canada limits the amount of trade, there is an increasing amount of trade in the co-products of ethanol production. Cross-border trade between Canada and the United States in biofuels reflects the most economical trade corridors.

On 1 July 2011, the federal government implemented a federal mandate of two per cent renewable content in diesel fuel and heating oil. The eastern part of Canada was initially given an implementation exemption until 31 December 2012, but on 18 May 2013, regulations Amending the Renewable Fuels Regulations were released, extending the exemption until 30 June 2013, as well as providing a permanent exemption from the mandate for heating oils.

Some provincial mandates for renewable content are also in place, including a 4 per cent requirement in British Columbia and two per cent requirements in Alberta, Saskatchewan, and Manitoba. Ontario will soon be undertaking consultations regarding the creation of a mandate. At this time, Canada’s biodiesel production, at an estimated 471 million liters in 2013, remains below Post’s estimation of approximately 568 million liters needed to meet the federal standard (excluding heating oil) if it was in full effect in 2013.

However, biodiesel production, due to the completion of new facilities, is expected to reach 646 million liters in 2014, surpassing production needed to supply the federal requirement. While production from soybean as a feedstock is expected to take place, primary feedstocks remain canola, animal fat, and recycled oils. Canola feedstock is expected to account for nearly 40 per cent of Canadian biodiesel production by the end of 2014.

Further Reading

You can view the USDA GAIN: Canada Biofuels Annual 2013 report by clicking here.

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