Governors' Biofuels Coalition

Currently, gasoline in Canada can contain up to 10 per cent ethanol, but a proposed amendment could raise the maximum to 15 per cent in early 2018

OTTAWA — The federal government is looking to increase the amount of ethanol that can be blended into Canadian gasoline by 50 per cent, part of a larger effort to increase the use of low-carbon fuels across the country.

Under current regulations, gasoline in Canada can contain up to 10 per cent ethanol, but a proposed amendment could raise the maximum to 15 per cent in early 2018. A technical committee is making the final decision about the change, according to a spokesperson with Public Services and Procurement Canada.

The amendment, if adopted, would follow a similar decision in the U.S., where the Environmental Protection Agency in 2010 approved a 15 per cent ethanol blend, or E15, in vehicles from 2001 and later. At the time, many auto manufacturers declared their warranties wouldn’t cover damage caused by fuelling cars with E15, as ethanol can be corrosive at higher concentrations.

A new federal standard for E15 would not oblige fuel suppliers to increase their ethanol content. Canada currently requires that gasoline be blended with five per cent renewable fuel, and on average, Canadian fuel exceeds that regulation, containing an ethanol blend of six to seven per cent.

But Natural Resources Canada recently put out a request for a study of the number of vehicles equipped for E15 in Canada, and of the infrastructure upgrades required for higher ethanol blends .

In a government tender posted online last month, the department said the new study will show “how well positioned Canada is to benefit from an increase in mid-level ethanol blends,” and would look at “the advantages and barriers of introducing new fuel blends in the market.”

In Canada, most vehicles produced since 2012 are compatible with E15, said Brian Ahearn, western division vice-president of the Canadian Fuels Association. Still, he has concerns about the infrastructure necessary to sell E15 alongside existing gasoline, since not all vehicles would be able to use the higher ethanol blend. “There are infrastructure and retailing challenges,” he said. “There’s work that has to be done right from the refinery right through to the retail side.”

That could include extra tanks and blenders at fuel terminals where ethanol is added to gasoline, he said, and new pumps and tanks at service stations.

Ottawa is currently developing a clean fuel standard, intended to cut carbon emissions by 30 million tonnes annually by 2030. The standard could require a 10 to 15 per cent reduction in the carbon intensity of fuels used in transportation, homes and industry.

Higher ethanol content in gasoline is one way that fuel suppliers could meet the new requirement, Ahearn said. “At the end of it, we’re really looking to reduce greenhouse gases at the best, lowest cost,” he said. “E15 might be one of the opportunity areas.”

Len Coad, director of energy and environment with the Conference Board of Canada, said a policy driver like the clean fuel standard “could pave the way for either a significant increase in ethanol production in Canada or a significant increase in ethanol imports to Canada.”

He said there have been few issues with vehicles using ethanol blends up to 20 per cent, and the standards have been kept lower “out of an abundance of caution.”

But it’s unclear how much customers at the pump could end up paying for more ethanol in their fuel.

One estimate from Clean Energy Canada finds that gasoline prices would be five cents a litre higher in 2030 with a clean fuel standard in place, assuming a 15 per cent ethanol blend is standard by 2025.

But a recently published summary of stakeholder comments on a discussion paper the federal government released earlier this year shows that the cost of a clean fuel standard is a source of concern for many. “One stakeholder mentioned that additional costs stemming from a (clean fuel standard) that consumers would have to bear would be on top of a carbon tax, for instance, resulting in a ‘double hit,’” the report reads.

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