Ethanol Industry

The Conference Board of Canada today released a study assessing the economic impact of the ethanol industry in Canada, its environmental and health effects, and the balance between the energy required to produce ethanol and the amount of energy generated.

“Good policy is based on accurate information and careful assessment of the alternatives. The purpose of this report is to assess the evidence and to contribute to policy discussions around ethanol,” said Len Coad, Director, Environment, Energy and Transportation. “Our study concludes that ethanol should be part of Canada’s energy mix. It is a clean transportation fuel that has a positive energy balance, reduces greenhouse gas emissions, and contributes to energy self-sufficiency.”

Ethanol production in Canada has reached almost 2 billion litres per year and will continue to grow because a federal renewable fuel standard has been implemented and transportation fuel markets continue to expand. The report assesses the economic impact of the ethanol industry, examines the policy objectives that underpin government support of the ethanol industry, and assesses some of the future opportunities for the industry.

Ethanol’s Potential Contribution to Canada’s Transportation Sector examines four questions regarding ethanol in Canada: What are the economic impacts of manufacturing and using ethanol in Canada? How green is ethanol? What is the impact of ethanol on Canadian public health? What is the energy balance in producing ethanol?

Economic impacts of ethanol production and use come from three primary sources: construction of plants, operation of plants, and government financial support of the industry, with the industry’s contribution to the Canadian economy estimated at as much as $1.2 billion annually. Government support in Canada is estimated to average approximately $260 million annually from 2006 through 2012.

An estimated $925 million in government revenues is generated during the construction phase for ethanol plants, and annual operations bring another $240 million (estimated) into government coffers. The biofuels industry accounts for more than 14,000 person-years of employment during construction phase and over 1,000 permanent jobs once plants are in operation.

The study was funded by the Canadian Renewable Fuels Association. The findings are based on a thorough review of an extensive range of reports and scientific studies about ethanol technologies, costs, environmental impacts, infrastructure, and policy support, with a particular focus on research using peer-reviewed, scientific methods.

The report, Ethanol’s Potential Contribution to Canada’s Transportation Sector, is publicly available from the Conference Board’s e-library (www.e-library.ca).