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What is ethanol?

Ethanol is a liquid alcohol made of oxygen, hydrogen and carbon and is obtained from the fermentation of sugar or converted starch contained in grains and other agricultural or agri-forest feedstocks. In Canada, ethanol is presently made principally from corn and wheat. Ethanol can be produced for different applications, for example, industrial ethanol or fuel grade ethanol. Research into technology to produce ethanol from non-food sources is advancing rapidly and is close to commercialization.

Fuel ethanol, which is sometimes referred to as “gasohol”, has been distilled and dehydrated to create a high-octane, water-free alcohol. All water must be removed because a water-alcohol mixture cannot dissolve in gasoline. Fuel ethanol is made unfit for drinking by adding a small amount of a noxious substance such as gasoline.

Ethanol is blended with gasoline to produce a fuel which has environmental advantages when compared with gasoline, and can be used in gasoline-powered vehicles manufactured since the 1980's. Most gasoline-powered vehicles can run on a blend consisting of gasoline and up to 10 percent ethanol, which is available at some regular service stations across Canada.

Some vehicles are specially manufactured to operate on an ethanol blend that contains up to 85 percent ethanol and at least 15 percent gasoline. (The 15 percent gasoline is needed to assist in engine starting because pure ethanol is difficult to ignite in cold weather.) This E-85 blend cannot be used in standard gasoline vehicles, however vehicles designed to run with a high ethanol blend can also operate using gasoline when necessary. E-85 is presently used by some organizations with large vehicle fleets and there are a few commercial stations offering E85 at their pumps.



Ethanol is a renewable fuel because it is produced from biomass. Ethanol also burns more cleanly and completely than gasoline or diesel fuel.

Ethanol reduces greenhouse gas (GHG) emissions because the grain or other biomass used to make the ethanol absorbs carbon dioxide as it grows. Although the conversion of the biomass to ethanol and the burning of the ethanol produce emissions, the net effect can be a large reduction in GHG emissions compared with fossil fuels such as gasoline. The reduction depends on the feedstock and the production processes used to make ethanol.

Low-blend ethanol from corn produces about 3 to 4 percent fewer greenhouse gas emissions than gasoline. Low-blend made from wood or agricultural cellulosic materials would produce 6 to 8 percent fewer emissions compared with gasoline.

Societal and economic

Ethanol contributes to regional economic growth and job creation, particularly in rural communities. There is great potential to capitalize on ethanol fuel because Canada has the forest resources and cropland needed to support the production of ethanol feedstocks. The development of a substantial ethanol industry would potentially mean new markets for Canadian biomass, agriculture and forestry. It would create construction and operations jobs at ethanol production plants and help strengthen and diversify rural economies.

Canadian farmers are becoming increasingly aware of this new market opportunity. Some have formed cooperatives to grow crops intended specifically as a feedstock for ethanol production. A 100-million-litres-per-year wheat-based ethanol production plant requires around 300, 000 tonnes of feed grain per year and an estimated 250, 000 acres to produce the feedstock. A plant this size would consume about 700 acres worth of production per day.

Ethanol production also offers opportunities to expand cattle feedlot operations. Large volumes of distiller's grain, a high-protein feed ingredient, are generated as a co-product of ethanol production.

As processes are further developed to manufacture ethanol from forest feedstock, such as wood waste, ethanol production will also create new sources of revenue for Canada's forest industry.


Ethanol in small engines and outboard motors

Before using ethanol blended gasoline in small engines, check with the manufacturer and your warranty. Small engines such as chainsaws and outboard motors are more susceptible to water contamination, and in order to prevent corrosion and performance problems, they should be checked for water and drained if necessary before fuelling with ethanol-blended gasoline.

Safety and Performance


Ethanol does not pose any more risk than gasoline or diesel fuel.


Using a 10 percent ethanol blend does not significantly affect a vehicle's fuel economy or horsepower. Although 10 percent ethanol-blended gasoline contains only 97 percent of the energy of pure gasoline, this is partially compensated for by the improved combustion efficiency of the ethanol-gasoline blend that the added ethanol provides. Overall, use of low-blend increases fuel consumption by an average of 2 percent compared with pure gasoline. However, this is only a slight difference when compared with other factors that have a larger impact on fuel economy. For example, driving at 120 km/h rather than 100 km/h increases fuel consumption by an average of 20 percent.

In the case of vehicles that use an 85 percent ethanol blend (high-blend), automakers generally equip these vehicles with larger fuel tanks to offset the fuel's lower energy content. This way, the distance a high-blend vehicle can travel before refuelling can be similar to that of a vehicle using pure gasoline.


The Government of Canada and some provincial governments have supported the development and use of ethanol fuel through research and development programs. Past efforts have addressed problems related to vehicle components and the fuel distribution system.

Current research is focusing on improving the sustainability of ethanol production. Canada has become a world leader in the development of processes for converting cellulosic based feedstocks, such as agriculture and forestry waste, to ethanol.

Known as cellulosic ethanol, the fuel is manufactured from agricultural and wood waste products as well as fast-growing trees. Potential feedstocks include wheat straw, corn stover, wood residue, switchgrass and poplar. Plant co-products can be used to generate the energy that runs cellulosic ethanol-manufacturing processes.

With support from the Government of Canada, Iogen Corporation has built the world's first and only full-scale demonstration plant to convert biomass fibres to ethanol using enzyme technology. Located in Ottawa, Ontario, the plant can process over 25 tonnes of wheat straw per week, using enzymes produced in an adjacent facility. Since the early 1980s, Iogen has received $30 million in federal funding for its pre-treatment and cellulose enzyme development. The Government of Canada also provided $10 million in repayable loans for the construction of the demonstration plant in the late 1990s.

Government Programs and Regulations

Renewable Fuels Regulation

The Renewable Fuels Regulations, published on September 1, 2010 in the Canada Gazette, Part II, require an average renewable fuel content of five per cent in gasoline starting December 15, 2010.

The Regulations include provisions that govern the creation of compliance units, allowing trading of these units among participants and also require recordkeeping and reporting to ensure compliance.


Federal departments and programs

Agriculture and Agri-Food Canada – Agriweb

Environment Canada

Transport Canada

Farm Credit Canada

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