Canada recently filed annual biofuels report with the USDA Foreign Agricultural Service&rsquo;s Global Agricultural Information Network, reporting the nation&rsquo;s ethanol industry has consolidated and plants are running at capacity.
The report indicates that Canada&rsquo;s ethanol plants have generally operated at maximum capacity since 2009, as demand for fuel ethanol has often exceeds domestic supply. Federal and provincial support programs are cited as allowing Canadian plants to operate positive cash flows despite feedstock price spikes and competition from U.S. imports.
While a Canadian ethanol plant closed last year, reducing the nation&rsquo;s nameplate capacity, the report indicates increased efficiencies in the other plants is expected to increase 2016 production to approximately 1.75 billion liters (462.3 million gallons), 1.4 percent higher than 2015 production levels. Next year, production is expected to be maintained at the 2016 levels. Capacity is also expected to remain at the current level of 1.775 billion liters in 2017. Canada currently has 14 ethanol refineries.
Regarding coproducts, the report notes that corn oil production has not followed the same upward trend as it has in the U.S. This is attributed to Canada Feed Regulations that require dried distillers grains (DDGs) to have a minimum amount of energy content, which requires more oil remain in the DDGs.
Corn and wheat are the primary feedstocks in the Canadian ethanol industry. Facilities in Ontario, Quebec and Manitoba take in corn, while plants in Saskatchewan and Alberta rely primarily on wheat. This year, it is estimated 77 percent of domestic ethanol production will be derived from corn, with 23 from wheat.
Canada currently has a 5 percent ethanol mandate in place, which requires approximately 2.2 billion liters of ethanol per year. However, more ethanol is consumed on a discretionary basis. The blend levels for 2016 and 2017 are expected to remain at 6 percent.
Canada imported approximately 1.093 billion liters of ethanol last year. Imports are currently expected to fall slightly this year, with 2017 import levels similar to those in 2016. Canada exported only 104,000 liters of fuel ethanol last year, with 63 percent of that volume going to the U.S. This year, exports are forecasted to reach 114,000 liters, with 2017 exports at a similar level.
The report also briefly discusses Enerkem&rsquo;s 38 MMly cellulosic ethanol plant in Edmonton, Alberta, noting that the facility is currently producing methanol because the economics are better. Additional cellulosic ethanol plants are under development in Canada, including a 38 MMly facility proposed to be built in Varennes, Quebec. That facility would feature Enerkem technology to convert non-recyclable waste into ethanol and be a joint venture of Enerkem and Greenfield Ethanol Inc. In addition, the report cites interest in the Atlantic Canadian region to produce ethanol from wood waste or other advanced feedstocks.
A full copy of the report can be downloaded from the USDA FAS GAIN <a href="http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Ottawa_Canada_8-9-2016.pdf" target="_blank">website</a>.
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Canada recently filed annual biofuels report with the USDA Foreign Agricultural Service's Global Agricultural Information Network, reporting the nation's ethanol industry has consolidated and plants are running at capacity.



Report: Canadian ethanol industry operating at full capacity

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