Natural Resources Canada
98/07 (a)

BACKGROUNDER

ETHANOL AS A TRANSPORTATION FUEL

The use of ethanol produced from biological feedstocks as an automotive fuel is not new. Henry Ford designed his Model T cars so they would run on ethanol and other fuels. Nevertheless, ethanol was quickly replaced by gasoline and diesel as the fuels of choice. However, in the 1970s and 1980s, when concerns arose about the sustained availability of light crude oil supplies and the increasing dependence on off-shore petroleum, there was a resurgence in interest in ethanol and other renewable fuels.

Fuel ethanol is a high-octane alcohol produced from the fermentation of sugar derived from the starch in grains (corn and wheat). Technology is under development that will also permit fuel ethanol to be made from other renewable feedstocks such as wood and agricultural residues. Produced in this fashion, ethanol is a sustainable indigenous energy choice.

The environmental benefits of ethanol as a transportation fuel are real. The Canadian Renewable Fuels Association among others have completed rigorous testing on the exhaust emissions from ethanol fuel. They found that a 10% blend of ethanol gasoline provides up to a 30 per cent reduction in carbon monoxide emissions, six to ten per cent net reduction in carbon dioxide and a net reduction in ozone-forming emissions.

In addition to its environmental benefits, fuel ethanol has economic benefits. With the developed world becoming increasingly dependent on crude oil from more remote and/or expensive sources, the competitive position of fuel ethanol should progressively improve. It also represents an important new market for agricultural crops, aiding in rural development, as well as a viable solution to waste management in the forestry and agricultural sectors.