Canada Weighs Overhaul of Clean Fuel Regulations Amid US Ethanol Competition

Canada is considering revising its Clean Fuel Regulations to make domestic ethanol production more competitive in the face of U.S. competition.

According to Lyndsey Smith, who spoke on RealAg Radio's Market Day Report, Canadian farmers and ethanol producers are concerned that the regulations put them behind the eight ball compared to U.S. ethanol imports.

'It's actually resulted in ethanol being between 7% and 35% cheaper to bring into Canada to meet those Clean Fuel Regulation standards than it is to actually make it in Canada,' Smith said.

The Conservative Party of Canada has proposed eliminating the regulations, which they characterize as a 'second carbon tax,' and instead reducing fuel taxes. They also suggest extending those tax measures and encouraging additional domestic refining capacity.

Any changes to the Clean Fuel Regulations could impact Canadian crop markets, particularly in Ontario where ethanol accounts for one-third of corn demand, and Western Canada where canola is crushed into biofuels.