Farms and Fuels Alliance pushes for ethanol regulation changes by 2026

The Farms and Fuels Alliance (FFA) is urging the Canadian government to amend the Clean Fuel Regulations (CFR) before the end of 2026 to support domestic ethanol production. The group argues that Canadian-made ethanol is losing market share to cheaper U.S. imports, which benefit from significant production subsidies under the U.S. 45Z Clean Fuel Production Credit.

In a letter to the Prime Minister, the FFA and Renewable Industries Canada called for a minimum 1.4-times credit multiplier for Canadian ethanol. This measure aims to address a competitiveness gap identified by the government over a year ago but not yet resolved. The groups warn that without timely policy changes, Canada’s growing ethanol demand will increasingly support foreign production and investment.

Andrea Kent, vice president of policy and external relations at Greenfield Global Inc., described the 1.4x multiplier as a practical response to the current competitive environment. Jeff Harrison, chair of Grain Farmers of Ontario, emphasized the impact on farmers, noting that Ontario’s ethanol production drives demand for one-third of the province’s corn crops. He also highlighted that ethanol blending reduced Canadian gasoline costs by an estimated 7.4 cents per litre in 2024.

The U.S. recently announced that Canada is on track to become a billion-gallon ethanol export market. The FFA and its allies stress that without a strong policy response, Canada risks losing economic benefits to its southern neighbor.