Report addresses impact of COVID-19 on Canada’s biofuel industry

By Erin Voegele | September 01, 2020

A report recently filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network provides insight into how the COVID-19 pandemic has impacted ethanol and biodiesel producers in Canada.

According to the report, a biodiesel plant in Quebec idled in April. The nation’s remaining biofuel plants, however, operated in the 50-70 percent capacity range during the early part of the COVID-19 crisis. Biofuel production in Canada has since recovered, as export demand for ethanol picked up in the European Union and export demand for biodiesel increased in the U.S.

The report indicates Canadian exports of ethanol have risen sharply, breaking back-to-back monthly records in May and June and reaching 15.6 million liters (4.12 million gallons) and 17 million liters of pure alcohol, respectively. One Canadian ethanol plant has been certified under the EU’s Renewable Energy Directive, according to the report. That certification has supported increased ethanol exports to the Netherlands. As a result, more U.S. ethanol has been imported into Canada to backfill behind Canada’s increased exports.

Canadian biodiesel imports remained flat during the COVID-19 pandemic, the report said. Biodiesel exports to the U.S., however, have continued to grow. The report notes that the U.S. accounts for 99 percent of Canada’s total biodiesel exports.

Gasoline demand in Quebec and Ontario was down 60 percent in May, which was reflected in lower domestic demand for ethanol, the report said. While some biofuel plants have been approved to produce alcohol for hand sanitizers, the report said production of that product is less profitable than fuel grade ethanol because hand sanitizer inputs require additional processing and come with corresponding higher production costs.

The report also addresses the impact of COVID-19 on other segments of the agricultural industry, including grain and oilseed production.

According to the report, lower demand for and production of ethanol has limited corn deliveries and created cash flow challenges for Canadian corn producers. COVID-19, however, has not had as significant an impact on Canada’s oil seed sector as other factors, such of successive years of inadequate precipitation in Manitoba and Saskatchewan.

A full copy of the report can be downloaded from the USDA FAS GAIN website.