A Letter to the Minister of Environment and Climate Change

Farms and Fuels Alliance

3 days ago

2 min read

The Honourable Julie Dabrusin, P.C., M.P.

Minister of Environment and Climate Change

House of Commons

Ottawa, Ontario K1A 0A6

RE: Delivering the Clean Fuel Regulations Commitment for Canadian Ethanol

Dear Minister Dabrusin,

A year ago, the Prime Minister committed to fixing a policy imbalance that leaves Canadian ethanol producers competing at a disadvantage in Canada’s own market. A year later, Canadian corn growers and ethanol producers are still waiting for that commitment to be delivered.

Grain Farmers of Ontario joins Renewable Industries Canada and the Farms and Fuels Alliance in calling on the Government of Canada to set the Clean Fuel Regulations (CFR) credit multiplier for Canadian-produced ethanol at a minimum of 1.4x, and to ensure draft amendments are published by Environment and Climate Change Canada by the end of 2026.

The evidence is clear. Canada’s ethanol market is growing, but an increasing share of that growth is being captured by imports rather than Canadian production. The reason is a structural policy imbalance: U.S. ethanol entering Canada benefits from meaningful production support under the 45Z Clean Fuel Production Credit while competing on equal terms with Canadian ethanol within the CFR.

The United States is now on track to become a 1 billion-gallon (4 billion-litre) ethanol exporter to the Canadian market. Without action, growing demand created by Canadian policy will increasingly support production, agricultural demand and investment outside Canada.

A minimum 1.4x credit multiplier for Canadian-made ethanol is a practical, targeted response. It recognizes the changed North American competitive environment and gives Canadian ethanol a fair opportunity to compete for market share created by Canada’s own regulatory framework.

For farmers, the stakes are significant. Ontario ethanol production accounts for one in three bushels of corn grown in the province. For consumers, ethanol is also delivering value: in 2024, ethanol blending reduced Canadian wholesale gasoline costs by an estimated 7.4 cents per litre.

The ask is straightforward, and delivery is overdue: set the Canadian ethanol multiplier at a minimum of 1.4x and publish the draft CFR amendments by the end of 2026.

Canadian policy has created a growing market for lower-carbon fuel ethanol. It’s time that Canadian farmers, producers and rural communities have a fair opportunity to grow with it. With more than $1 billion in potential investment on the table, it’s time to modernize the CFR so Canada captures the economic value of domestic ethanol production alongside the carbon reductions the CFR already delivers.

Sincerely,