06-12-04

The Government of Canada issued its invitation to industry to submit proposals under Round 2 of the Ethanol Expansion Program for contributions toward the construction of new fuel ethanol plants or the expansion of existing plants, a release from Agriculture and Agri-Food Canada Andy Mitchell's office said. A total of C$ 27.5 mm is available in this round.

The $ 100 mm Ethanol Expansion Program was launched in October 2003 under Canada's climate change plan to reduce greenhouse gas (GHG) emissions and is part of a larger renewable fuels strategy that also includes support for research and development, exemptions from federal fuel excise taxes and consumer awareness activities, the release said.

Under Round 1, six new ethanol plants across Canada are eligible for up to $ 72 mm in contributions toward construction costs. These plants, for which investments will total over $ 450 mm, plan to produce a total of 650 mm litres of fuel ethanol per year and more than quadruple Canadian supply. Projects that receive funding under Round 2 of the program will build on these amounts.

"The new ethanol plants across Canada supported by this program will help us reduce transportation-related greenhouse gas emissions as well as create new economic opportunities," said R. John Efford, Minister of Natural Resources Canada in the release.

Ethanol is a renewable fuel that can be produced from grain or other plant material. Using gasoline with ethanol is one way to reduce GHG emissions and take action against climate change. All gasoline vehicles manufactured since the 1980s can use gasoline with up to 10 % ethanol and over 1,000 retail stations in Canada offer this fuel to motorists today.

"We expect that the projects supported by the second round of the program will add to economic growth in rural areas, offer alternative markets for our farmers and increase the use of renewable energy in Canada," said Mitchell.

The increase in Canadian fuel ethanol production capacity facilitated by the EthanolExpansion Program is supporting current and proposed programs for ethanol content in gasoline, and is an important step toward the Government of Canada's target of having at least 35 % of Canada's gasoline contain 10-% ethanol by 2010.

Source: Resource News International