Canada invests in GreenField ethanol

By Holly Jessen | February 09, 2010
Posted March 16, 2010

Over the next seven years, the GreenField ethanol plant in Varennes, Quebec, will receive up to $79.75 million from the Canadian government's ecoENERGY for Biofuels program. "What it allows us to do is maintain the right operating margins to support operations," said Jean Roberge, general manager of GreenField Ethanol of Quebec Inc. He added that the funds will also help the ethanol plant invest in future research and development projects.

Government support such as this is very important to sustain the relatively new biofuels industry in Canada and make it competitive with fossil fuels, Roberge told EPM. The ecoENERGY program is Canada's answer to that need, mirroring similar programs in the United States. "By investing in this project," said Steven Blaney, a Canadian member of parliament, "we are helping to create and sustain local jobs and economic opportunities while encouraging a healthier environment for all Canadians."

Besides the Varennes facility, which has a capacity of 39.6 MMgy (150 MMly), GreenField operates three other corn-to-ethanol ethanol plants in Ontario, including Chatham, Johnstown and Tiverton. GreenField Hensall, a fifth ethanol plant is under construction in Ontario. In total, GreenField produces close to 660 MMly of ethanol, Roberge said.

The Varennes facility isn't the only GreenField plant to receive government funding of this kind. In June 2009 the company announced that the Johnstown facility would receive investments of up to $117.5 million over seven years.

Canada's ecoENERGY for Biofuels was established in 2008 and will run through March 31, 2017, according to information from Natural Resources Canada's Web site. The program will invest up to $1.5 billion to support biofuel production in Canada.

To participate, eligible producers sign a contribution agreement and can receive up to 10 cents per liter of eligible production for the first three years. Production facilities can receive the incentive for up to seven years, which declines after the first three years. "By providing operating incentives to producers to ensure reasonable profit margins as the market for renewable fuels matures, ecoENERGY for Biofuels encourages private investment in biofuel production and supports the development of a strong, competitive renewable fuels industry in Canada," the Web site said. Two other ecoENERGY complementing programs are the Biofuels Capital Initiative and the Biofuels Opportunities for Producers Initiative, for which the Canadian government is making $220 million in incentives available to support farmer developped biofuels production facilities.

Current proposed legislation in Canada requires 5 percent renewable fuel content in gasoline and 2 percent renewable content in diesel and heating oil by 2011 or earlier, according to Natural Resources Canada.