STEINBACH, MAN. THE CARILLON n C3
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THURSDAY, NOVEMBER 20, 2025
Preserving the industry and domestic jobs
Continued from 2C Robert Parsons, a University of Manitoba supply management instructor, points to both the federal regulations and two Ameri- can policies that accelerated U.S. exports to Canada. With the subsidized American ethanol “flooding” Canadian markets, he said it’s a miracle that Manitoba’s plant has stayed afloat this long. “What has happened under the Clean Fuel Regulations is U.S. ethanol is welcomed into Canada with literally open arms. And they (the federal government) give them (U.S. ex- porters) carte blanche on this,” he said. Former U.S. President Joe Biden signed the Inflation Reduction Act in August 2022 — two months after Canada’s regulations were cre- ated. The act offered tax credits and grants for American ethanol and biofuel producers, al- lowing them to scale up production. Those subsidies were further bolstered when President Donald Trump’s One Big Beautiful Bill Act was passed in July. It extend- ed existing tax credits and removed land use emissions penalties for ethanol production. Those tax credits add up to roughly 34 cents-per-litre CAD for American renewable biofuels, regardless if it stays in the U.S. or shipped abroad. The combination of domestic regulations and the U.S. ethanol subsidies saw American imports explode. U.S. ethanol exports to Canada hovered at roughly 1.2-billion litres annually from 2011 to 2021, according to the U.S. Energy Infor- mation Administration. In 2022, exports jumped more than 50 per- cent to 1.9-billion litres. Those numbers con- tinued trending upwards, with 2024 seeing a record 2.6-billion litres of American ethanol exported to Canada. In August alone, Canada imported 255-mil- lion litres. Nationally, Canada produced nearly 1.7-billion litres of ethanol in 2023, ranking it as the sixth largest global ethanol producer behind the U.S., Brazil and China, according to Statistics Canada. Parson said U.S. ethanol gets a strong ad- vantage because Canadian producers still have to pay the industrial carbon tax on emissions, known as the Output-Based Pric- ing System, and the Americans don’t. “Look at that 34-cent subsidy. How are peo- ple going to be able to compete with that,” he said. “It’s created almost an untenable situa- tion.” That cheaper, subsidized U.S. ethanol out-competing the domestically-produced alternative has built a reliance on American imports. “I’m perfectly fine for the U.S. to build their own country and build their own ethanol. But if they’re using that to subsidize exports to us, and we are their biggest export location, well, that’s not good, and somebody is not think- ing that through,” Parsons said. He said the federal and provincial govern- ments need to take action by removing the Clean Fuel Regulations, slashing the indus- trial carbon tax and banning U.S. ethanol im- ports, similar to how U.S. booze was ripped from Canadian retail shelves in March. While it would be painful for Canadians be- cause ethanol supply would drop, preserving the industry and domestic jobs is worth the price of not relying on the U.S., Parson said. Both B.C. and Ontario governments have already put made-in-Canada requirements on ethanol use. B.C. announced in February the five percent renewable fuel requirement for gasoline must only use Canadian-pro- duced renewable fuels. Ontario announced its own on Aug. 8, mandating 64 percent of its renewable fuel for gasoline be made domestically. Adrian Dix, B.C.‘s minister of energy and climate solutions, said at the time the mea- sures were targeting U.S.-subsidized ethanol. “By increasing the Canadian biofuel con- tent in our transportation fuels, we will sup- port local producers, protect jobs and reduce our dependence on foreign energy,” he said in a Feb. 27 statement. The federal government could increase the amount of credits for domestic ethanol production, bringing it into parity with U.S. exports, Fred Ghatala, president of Advanced Biofuels Canada said. He said the federal relief funding isn’t enough to support the biofuel industry. “If there is not viable Canadian biofuel pro- duction, we worry about the long term viabil-
MATTHEW FRANK THE CARILLON
Roughly 85 percent of the corn supplied for ethanol production is Manitoba grown.
ity of the clean fuel regulations,” he told The Carillon. Manitoba requires 10 percent renewable fuels in gasoline and five percent renew- ables in diesel. Ghatala said the province has a “strong opportunity” to increase that re- quirement, which, combined with domestic protections, could spur growth for the local biofuel industry. “Renewable fuels are a supply chain that connects Canadian farms to Canadian cities, and having that be a made in Canada supply chain is something that we can all be proud of,” he said. Bahl said while the protection measures in B.C. and Ontario help stabilize producers there, he’s worried it will redirect the U.S. eth- anol supply to provinces that don’t have sim- ilar measures, including Manitoba, and flood the market. Canadian producers aren’t the only ones suffering from American ethanol imports. In August, one of the U.K.’s two ethanol plants shut down because it couldn’t compete with U.S. imported ethanol undercutting its pric- es. That’s something Parsons fears will soon happen in Canada if there’s no change. “If we do nothing, we’re going to lose this industry, period. That’s the stark choice that we have got,” he said. “American friends are not our friends.” The Prime Minister Mark Carney-led gov- ernment is too focused on big projects, said Parsons, while existing industries like etha- nol production, are “eroding,” Parsons said. Last month, Manitoba released its plan to reach net zero emissions by 2050. Part of that plan is to “develop renewable fuel strategies and support industry to set up production fa- cilities” for biofuels. While Parsons sees the plan as a “noble idea,” he said it won’t work unless protec- tions are put in place for domestic ethanol producers. A provincial spokesperson said Manitoba will work with industries and stakeholders as the plan is implemented. The current provin- cial ethanol mandate helps reduce the reli- ance of petroleum and supports the Minne- dosa plant, the spokesperson said in an email statement. ”These efforts will attract investment, cre- ate jobs, and position Manitoba as a clean energy leader on the path to net zero by 2050,” she said. The spokesperson didn’t say what Manito- ba will do to address the concerns of rising subsidized ethanol imports. Federal Minister of Energy and Natural Resources of Canada Tim Hodgson didn’t re- spond to interview requests by deadline.
From whiskey to ethanol
From there, the grain slurry is piped over to the four fermenting units, which mix in yeast and hold the slurry for nearly 60 hours. As the yeast feeds on the corn’s sugar, it produces carbon dioxide that is released through the plant’s steam flumes. When the yeast digests all of the sugar, it begins converting into alcohol, the basis for ethanol. The alcohol goes through distilla- tion processes to remove excess water to raise its concentration level. To make it not drinkable, gas is added to the ethanol. From there, the fuel is ready for blending with the gas going into any vehicle’s fuel tank. Bahl said the plant’s ethanol is trucked to Winnipeg, Regina or Edmonton, with up to 50 percent of its ethanol staying in Manito- ba, to gas companies ready to mix the etha- nol to meet provincial quotas. After finishing an ethanol batch, the plant is left with two byproducts: fibre-filled mash from cooking the slurry, and the leftover corn oil. The mash is moved to a spinning dryer that removes the liquid. Since Manitoba doesn’t have any biodies- el factories, it has to be shipped and sold elsewhere in Canada. The other product, known as dried distilled grain, is a high-pro- tein animal feed trucked to farms across Manitoba and neighbouring provinces.
by MATTHEW FRANK M innedosa’s plant got its start as a whiskey distillery in 1968, shipping its whiskey to the U.S. Costing $4 million at the time, the distillery owned by Canada’s Manitoba Distillery Limited was one of the province’s first distilleries. It was opened with provincial fan-fair, as former Premier Walter Weir drove a forklift carrying the symbolic first barrel, according to a 1968 Manitoba press release. The plant garnered international atten- tion, with The New York Times publishing an article on the distillery’s announcement in 1960. The distillery closed in 1973 and re- opened as a ethanol fuel plant in 1981, ran by Husky Energy. Ownership transferred to Cenovus Energy when it bought out Husky Energy in 2020. To take corn from feed to fuel, giant ham- mers grind the corn into a fine flour to prepare its starch for interacting with the water and the enzymes needed to ferment. The crushed grain is transferred to a cook- er pipe, where 130 C temperatures cook the grain, now mixed with water and enzymes, under pressure for roughly 20 minutes.
MATTHEW FRANK THE CARILLON Minnedosa’s senior plant manager Avi Bahl shows the first jar of ethanol produced from the plant.
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