Trade mission to Canada strengthens industry, government ties

By U.S. Grains Council | June 30, 2022

Earlier this month, the U.S. Grains Council’s Director of Global Ethanol Export Development Mackenzie Boubin, Manager of Global Ethanol Policy and Economics Isabelle Ausdal, along with Mike Lorenz, senior vice president of market development at Growth Energy, conducted a trade mission to Ottawa, Canada, to encourage continued ethanol policy development at national and provincial levels to immediately decarbonize transportation and help meet the country’s climate ambitions.

As a result of the mission, the Council continues to build ties with the Canadian market and maintain close relationships with the Canadian industry and individual policy drivers. The U.S. ethanol industry has submitted comments on the draft Canadian Fuel Standard (CFS) and Quebec’s E15 regulations and is in contact with the Canadian government and the U.S. Department of Agriculture’s Foreign Agricultural Service (USDA’s FAS) in Canada to advocate for the expanded use and fair treatment of U.S. ethanol under new regulations.

“Canada has a strong domestic ethanol industry and a longstanding history of ethanol trade with the U.S. The fight to lower emissions is a top priority for both countries, and a range of options is needed. Both parties understand that decarbonization of the transportation sector requires a clean fuel mix with all available solutions scoped in,” Ausdal said.

As a result of the Council’s efforts, the Canadian government announced that carbon capture and sequestration (CCUS) would count toward the carbon intensity (CI) reduction of U.S. biofuels, and the government has engaged with U.S. industry on the implications of new land use and biodiversity (LUB) criteria. This direct cooperation between the U.S. and Canada will allow for the enhanced free trade of biofuels.

While in Ottawa, the Council joined Renewable Industries Canada (RICanada) representatives to demonstrate alignment with ethanol’s increased use and uptake. Canada has been the most consistent ethanol export partner for the United States since 2010, averaging about 330 million gallons per year. In the last marketing year, exports totaled nearly 350 million gallons worth $784 million.

Since 2010, ethanol has played a key role in Canada’s biofuels policies and the current national ethanol blend rate stands at five percent. To increase this average, Canada is drafting a CFS that will be implemented in 2023 to increase blending of biofuels and reduce overall CI of the fuel pool. Final CFS regulations are now expected to be published in late July 2022.

While the CFS has been under development, provincial mandates have been the primary driver of biofuel demand. Quebec, Ontario, Saskatchewan and British Columbia have adopted or are in the process of adopting policies requiring the use of low-carbon fuels, including minimum blending standards for ethanol.

“Canada’s CFS is a strong policy to provide a demand signal for biofuels. Combined with ambitious provincial greenhouse gas reduction goals, it is a great case study on complementary policies working together to increase national blending of ethanol successfully,” Ausdal said.