Canada in 2020 – Ethanol: The new alchemists

Canadian Business
Joe Castaldo
From the October 27, 2008 issue of Canadian Business magazine

Ethanol industry executives must be feeling a bit like punching bags these days. They’ve been accused of inflating food prices, oil prices and carbon emissions — instead of reducing them. An increasing body of research is showing ethanol made from food crops such as corn and wheat is not quite the eco-friendly technology it was thought to be. But the industry believes it has a saviour in second-generation or cellulosic biofuels, made from agricultural waste (the leaves and stalks of corn, for example) or non-food crops such as switchgrass. Both government and industry in North America are investing heavily. The federal Conservatives have allocated $500 million to foster cellulosic technology, and the U.S. Department of Energy is investing up to US$385 million over the next four years to build six cellulosic ethanol production plants.

Certainly, the technology has the potential to reduce dependency on fossil fuels and to lower greenhouse-gas emissions. But no cellulosic ethanol is produced on a commercial scale today. In fact, it makes up just 0.2% of ethanol production in Canada, despite decades of research. The big problem is cost. It is technically challenging and expensive to produce fuel this way.

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