Farms and Fuels Alliance Urges Overdue Clean Fuel Regulation Amendments for Canadian-Made Ethanol by Year-End
Canada’s Farms and Fuels Alliance (FFA) is urging the federal government to move quickly on long-promised changes to the Clean Fuel Regulations (CFR), calling for the announcement and finalization of a minimum 1.4x credit multiplier for Canadian-made ethanol by the end of 2026.
The call comes as Canada’s ethanol market continues to expand, while an increasing share of that growth is being supplied by imports rather than domestic producers. The FFA says the situation highlights an emerging competitiveness gap that the federal government itself identified more than a year ago but has yet to address through finalized regulatory changes.
In a letter to the Prime Minister, the FFA joined Renewable Industries Canada in pressing Ottawa to introduce targeted amendments to the CFR. At the centre of the request is a minimum 1.4x credit multiplier for ethanol produced in Canada. Industry representatives argue that the measure would provide Canadian producers with a more level playing field as they compete against imported ethanol, particularly from the United States.
The issue has become more pressing as the competitive environment across North America changes. U.S. ethanol producers benefit from significant federal production support through the U.S. 45Z Clean Fuel Production Credit. Despite that advantage, imported U.S. ethanol competes directly with Canadian-made ethanol in Canada’s domestic market.
Industry groups argue that Canada’s clean-fuel policies are creating growing demand for ethanol, but Canadian producers are not necessarily capturing the economic benefits of that demand. Without a policy adjustment, they warn that Canadian regulations could unintentionally encourage more production, agricultural demand and investment in the United States rather than supporting those activities at home.
The concern comes at a time when Canada’s ethanol market is poised for continued growth. Last month, the United States announced that Canada is on track to become a billion-gallon, or approximately 4-billion-litre, ethanol export market. For Canadian agriculture and renewable fuel producers, the scale of that projected market represents both an opportunity and a policy challenge.
A larger domestic ethanol market could support demand for Canadian corn and other agricultural commodities, create investment opportunities and strengthen the country’s renewable fuels sector. However, industry leaders say those benefits could increasingly flow to foreign producers unless Canadian policy ensures that domestic ethanol remains competitive.
“A minimum 1.4x credit multiplier for ethanol made in Canada is a practical, targeted response,” said Andrea Kent, Vice President, Policy and External Relations at Greenfield Global Inc. “It recognizes the changed North American competitive environment and gives Canadian ethanol a fair opportunity to compete for market share created by Canada’s own regulatory framework.”
The proposed multiplier is intended to strengthen the position of Canadian ethanol without fundamentally changing the objectives of the Clean Fuel Regulations. Instead, industry groups see it as a targeted adjustment that would account for differences in the policy environments facing Canadian and U.S. producers.
The issue also has important implications for farmers. Ethanol production provides a major source of demand for agricultural commodities, particularly corn. In Ontario, the connection between the ethanol industry and the farming sector is especially significant.
“For farmers, the stakes are significant,” said Jeff Harrison, Chair of Grain Farmers of Ontario. “Ontario ethanol production accounts for one in three bushels of corn grown in the province.”
The relationship between ethanol production and agriculture extends beyond demand for crops. Domestic biofuel production can also contribute to rural economic activity, support processing facilities and encourage investment throughout agricultural supply chains. A strong domestic ethanol sector therefore has implications not only for fuel producers, but also for farmers, processors, transportation providers and communities connected to agriculture.
At the same time, ethanol is being positioned as a way to deliver benefits to Canadian motorists. According to the industry groups, ethanol blending helped reduce Canadian wholesale gasoline costs by an estimated 7.4 cents per litre in 2024.
That consumer benefit adds another dimension to the debate over the future of Canada’s clean-fuel policies. Ethanol can contribute to lower fuel costs while helping fuel suppliers meet regulatory requirements. But industry representatives argue that if Canada is going to expand the role of ethanol in its fuel market, it should also ensure that domestic producers are able to compete for the resulting demand.
The FFA and Renewable Industries Canada maintain that the federal government has already recognized the underlying competitiveness issue. What remains, they say, is for Ottawa to translate that recognition into a concrete regulatory change.
The groups are therefore pressing the government to act within a defined timeline rather than continuing with consultations or delays. Their request is for the minimum 1.4x credit multiplier to be announced and finalized by the end of 2026.
“For Canadian ethanol producers, the issue is becoming increasingly urgent as imports gain a larger share of a market shaped by Canadian policy,” the groups argue. A delayed response could make it more difficult for domestic producers to capture the benefits of future market growth and could influence where new investment is made across the North American biofuels industry.
Kevin Norton, CEO of Alco Energy Canada, said the industry’s request is clear.
“The ask is straightforward, and a full correction is overdue,” Norton said. “Deliver and finalize a minimum 1.4x multiplier for Canadian-made ethanol by the end of 2026.”
For the Canadian ethanol sector, the debate ultimately comes down to competitiveness. Canada is creating demand for renewable fuels through its clean-fuel policies, while U.S. producers are receiving substantial production incentives of their own. Industry organizations say Canada must ensure that its regulatory framework does not put domestic producers at a disadvantage in the very market it is helping to create.
A minimum 1.4x multiplier, they argue, would provide a targeted response to that imbalance while supporting Canadian agriculture, domestic manufacturing, rural economies and consumers. With the ethanol market expected to continue growing, the industry says the federal government now has an opportunity to ensure that a greater share of that growth translates into Canadian production, investment and agricultural demand.
The FFA’s message to Ottawa is therefore focused on timing as much as policy: with Canada’s ethanol market expanding and international competition intensifying, the promised changes to the Clean Fuel Regulations should be delivered and finalized before the end of 2026.
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