Government of Canada
2002/37
April 5, 2002

GOVERNMENT OF CANADA INVESTS
$2.7 MILLION IN GREEN FUEL RESEARCH

OTTAWA —The Government of Canada is supporting new research to help turn plant fibre into an environmentally friendly fuel for vehicles. The $2.7 million investment will focus on the enzymes that break down the fibre and seek to make the process 10 times faster.

Herb Dhaliwal, Minister of Natural Resources Canada, Lyle Vanclief, Minister of Agriculture and Agri-Food Canada and David Anderson, Minister of the Environment, today announced support to Ottawa-based Iogen Corporation, a leading enzyme developer and innovator in the bioethanol field, to improve the efficiency of enzymes over the next three years. The company will match the Government of Canada funding, bringing the total to $5.4 million.

"Using and producing bioethanol and bioethanol-blended fuels is an effective way for Canada to reduce its greenhouse gas emissions, improve air quality and create a new homegrown source of energy," said Minister Dhaliwal. "By increasing the efficiency of bioethanol production, we can offer a renewable fuel at competitive cost to the Canadian consumer."

Unlike conventional fuel ethanol, a high-octane alcohol produced from the fermentation of sugar derived from the starch in grains such as corn and wheat, "bioethanol" is made from the fermentation of sugars derived from the plant fibre in renewable feedstocks such as wood and agricultural residues. Enzymes make the process possible. Compared to gasoline, ethanol made from plant fibre releases 70 percent lower carbon dioxide emissions — a greenhouse gas that contributes to climate change. Conventional ethanol-blended gasoline is currently offered at many retail gas pumps.

"Advances in bioethanol will offer farmers new markets," said Mr. Vanclief. "This investment today will take us closer to the goal of Canadian agriculture being the world leader in innovation, environmental responsibility, food quality and safety. As the bioethanol industry grows, I'm convinced it's going to generate significant business opportunities and enhance Canada's position."

"Canadians have developed a reputation for this world-leading technology that turns agricultural and wood waste into bioethanol," said Environment Minister David Anderson. "It is a winning scenario — greenhouse gases are reduced, air quality is improved and farmers make money in the process. Companies like Iogen are creating benefits for the environment, the economy and society."

Iogen Corporation, an established commercial developer and manufacturer of industrial enzymes, sells enzyme products to the pulp and paper, textiles and animal feed industries. The company has built a $35-million bioethanol demonstration plant in Ottawa, the first of its kind in the world to integrate cellulase enzyme research and development into the industrial process required to manufacture bioethanol fuel. Over the past 20 years, Iogen's technological breakthroughs in the field of fibre-digesting enzymes have made the efficient production of bioethanol possible.

"The support of the Government of Canada is very important to Iogen's commercial success," said Jeff Passmore, Executive Vice President, Iogen Corporation. "This funding partnership will reduce the cost of producing bioethanol and help Canada remain the leader in the field."

Government of Canada funding for this agreement is built into the existing financial framework and comes from Natural Resources Canada, Agriculture and Agri-Food Canada=s Canadian Adaptation and Rural Development (CARD) fund and the Technology Early Action Measures (TEAM) component of the Climate Change Action Fund. The $150 million Climate Change Action Fund (CCAF) was established by the Government of Canada in the 1998-99 federal budget and was extended for a further three years in the 2000 federal budget.

Revised April 11, 2002

For more information, media may contact:

Heather Bala
Director of Communications
Office of the Minister
Natural Resources Canada
Ottawa
(613) 996-7252

Media Relations
Agriculture and Agri-Food Canada
Ottawa
(613) 759-7972

Kelly Morgan
Communications Advisor
Minister of the Environment
(819) 997-1441

Jeff Passmore
Executive Vice President
Ethanol Office of the
Iogen Corporation
Ottawa
(613) 733-9830 ext 3385

The following media backgrounder is also available:

(a) Ethanol as a Transportation Fuel

To find out more about the Government of Canada's action on climate change visit our Web site at http://www.climatechange.gc.ca