Canadian farm and renewable fuel groups are pressing Ottawa to change the Clean Fuel Regulations (CFR) by year-end, arguing U.S. ethanol is gaining an unfair advantage in the Canadian market.
In a letter Tuesday to Environment and Climate Change Minister Julie Dabrusin, the Farms and Fuels Alliance, Grain Farmers of Ontario, and Renewable Industries Canada called on the federal government to establish a minimum 1.4-times Clean Fuel Regulations credit multiplier for Canadian-produced ethanol and publish draft amendments before the end of 2026.
The groups say Canadian ethanol demand is growing, but an increasing share of that growth is being captured by imports. They argue U.S. ethanol receives production support through the 45Z Clean Fuel Production Credit while still competing on equal terms with Canadian ethanol under Canada’s Clean Fuel Regulations.
“The ask is straightforward, and delivery is overdue: set the Canadian ethanol multiplier at a minimum of 1.4x and publish the draft CFR amendments by the end of 2026,” the letter said.
According to the letter, the U.S. is on track to export about 1 billion gallons, or 4 billion litres, of ethanol to Canada. Without regulatory changes, the groups contend that rising Canadian demand could increasingly support production and investment south of the border rather than at home.
The proposed 1.4-times multiplier would provide additional Clean Fuel Regulation credit value for domestically produced ethanol. The alliance said the measure would help offset the changed competitive environment created by U.S. production incentives and give Canadian plants a better opportunity to compete for domestic market share.
The issue is particularly important for Ontario corn growers. Grain Farmers of Ontario says ethanol production accounts for roughly one-third of the corn grown in the province, making the sector a major source of domestic demand.
The groups also pointed to consumer benefits from ethanol blending, estimating it reduced Canadian wholesale gasoline costs by 7.4 cents per litre in 2024.
The letter says more than $1 billion in potential investment could be affected by the policy decision and argues the federal government should ensure Canadian farmers, processors and rural communities capture more of the economic benefits associated with expanding lower-carbon fuel demand.
The Clean Fuel Regulations are designed to reduce the carbon intensity of gasoline and diesel used in Canada by creating compliance credits for lower-carbon fuels and other emissions-reduction measures.
