Grain Trade & Marketing

Corn-Based Ethanol: What Are the Benefits?

Renewable fuels such as corn ethanol can play a major role in helping Canada to achieve reduced greenhouse gas emissions and improved air quality. The following article provides answers to many of the questions currently being asked about the potential benefits that ethanol can provide.

How much ethanol is currently produced in Canada?
Canada currently produces 238 million litres of ethanol annually. Of this amount, 173 million litres are produced from corn in Ontario at Commercial Alcohols, Inc. in Chatham (150 million litres annually) and Tiverton (23 million litres annually).

How does the use of ethanol improve air quality?
Use of oxygenates such as ethanol has clearly been shown to reduce harmful and polluting emissions, and thereby contribute to improved air quality, as confirmed by studies conducted in Chicago, Denver and other such cities where oxygenate use was mandated for air quality mitigation under the U.S. Clean Air Act, 1991. Several major Canadian cities - Toronto and the Greater Toronto Area (GTA), Vancouver and others - would be declared non-compliant were they subject to the same air quality standards in effect in the U.S.

With the use of oxygenated fuels, emissions of nitrous oxides (NOx) can increase slightly (generally about 3-5%), although not often significantly higher than with conventional (non-oxygenated) fuels. However, the newer catalytic converters reduce N0x emissions, and N0x emissions are further offset by the very significant decreases in other polluting emissions such as carbon monoxide, air toxics such as benzene, toluene, xylene and other ozone-forming compounds. The overall net reduction in emissions (including ‘tailpipe’ or ‘volatile’ emissions) was clearly documented in the very extensive series of Auto-Oil industry studies conducted through the early to mid 1990s in the U.S. In Canada (with the exception of the lower Fraser Valley) regulations require that ethanol-blended gasoline meet the same volatility standards as conventional gasoline. This means that volatile emissions in Canada are even less than in the U.S., where a volatility waiver is allowed for ethanol-blended gasoline (gasohol).

There is overwhelming evidence that ethanol, produced from renewable feedstocks such as corn and other starchy grains, provides significant net reductions in greenhouse gases (GHGs include carbon dioxide, methane, nitrous oxide) on a full life-cycle basis. Conservative estimates place this at about 40% for pure ethanol (or 4% for E10) compared to conventional gasoline. By all measures, this reduction in GHGs is substantial, given an apples-to-apples comparison with conventional petroleum fuels.

How does ethanol compare to gasoline in terms of fuel efficiency?
Although the energy density of ethanol is marginally less than that of gasoline, ethanol’s improved combustion efficiency offsets the difference. As a result, gas mileage is not adversely affected with low-level ethanol-blended gasoline (i.e., E10 or less). Most consumers can detect no difference between standard gasoline and ethanol blends: some have noted improved mileage and performance with the ethanol blends. A high ethanol blend – such as E85 – would almost certainly result in noticeable fuel efficiency differences. However, consumers have accepted such changes with other alternative fuels such as natural gas and propane, where the reduced energy content is offset through price, environmental and other benefits attributed to their use. E85, as a pure fuel, will be an excellent energy source for fuel cells in the longer term transition to hydrogen, for which many technical and safety barriers still need to be overcome.

How does ethanol perform at low temperatures? Does the fact that ethanol mixes easily with water in the gas tank produce negative results?
Ignition at low temperatures is not a concern with low-level ethanol blends. Ethanol’s affinity for water is only a problem if significant amounts of water are present in the fuel system – an undesirable state in any case. Ethanol removes water and some of the deposits that build up in fuel systems over time with conventional gasoline use.

Is ethanol safe for engine parts?
Although there were some concerns about the impact of ethanol on engine parts in the late 1970s and early 1980s, this is no longer the case. Since that time, auto manufacturers have altered the composition of engine materials. Softening of rubberized hoses and corrosion of engine parts resulting from ethanol use is no longer an issue. All major auto manufacturers now provide full warranty coverage for fuels containing up to 10% ethanol. Several ‘flex fuel’ models can be operated, and are warranteed, at up to 85% ethanol (E85).

What do recent studies show about the efficiency of ethanol production?
Early studies suggested that corn ethanol production resulted in excessive carbon dioxide emissions because of the amount of fossil fuel required to produce both the feedstock and the ethanol itself.

Although these allegations continue to resurface, they draw primarily on old data and completely dismiss the energy value of ethanol’s primary co-products. Such works have been widely refuted by a diverse group of academic and agricultural experts, including the U.S. Department of Energy and the USDA.

In recent years, tremendous gains in efficiency have been achieved in both crop and ethanol production processing. In August of this year, the USDA released a new study showing that ethanol production yields 34% more energy than is used in growing and harvesting grain and distilling it into ethanol.

Significantly increased energy gains over findings from their 1995 study are attributed to higher corn yields, lower energy use in the fertilizer industry and advances in ethanol production technologies.
Ethanol also provides other significant environmental and social benefits, including improved air quality, reduced reliance on non-renewable energy sources, diversification of agricultural markets and rural economic development. Co-products that result from the ethanol production process include a high protein feed that helps to keep livestock feed costs low.

How does public investment in ethanol fuels benefit society in general?
Ethanol fuels are supported by government and consumers for reasons beyond strict economics. Other significant benefits include improved air quality (and the ancillary reduction in health impairment and health care costs), reduction in reliance on non-renewable energy sources, the diversification of agricultural markets and substantial rural economic development.

By terms of comparison, the oil industry has also received substantial subsidies, while providing a significantly lower level of consumer and environmental benefit.

The cost of ethanol production has declined rapidly, and it is expected that this trend will continue, with costs being less than those for gasoline in the relatively near future.

Why does ethanol production make sense for Ontario?
Ethanol manufacturing plants may or may not make sense in certain regions. Major factors include the availability of suitable feedstocks, the distance to market and the market demand for both the ethanol and its co-products. Local entrepreneurship and workforce availability, municipal or provincial business and economic development incentives or longer term strategic planning goals are among the many other factors that are important.

Certainly in Ontario (and southern Quebec), ethanol makes sense for all of the above reasons. The higher population means greater air quality concerns and a much larger demand for ethanol/cleaner fuels. Distance to market for the ethanol is minimal, corn feedstock for the ethanol plants is readily available within the Great Lakes ‘grainshed’ (i.e., within a few hours trucking distance to the ethanol plants), and the abundance of livestock production provides a ready market for distillers’ grains (a co-product from the ethanol production process that provides a high-protein feed source for livestock). Ready markets exist for other ethanol co-products, and additional value-added uses for co-products or derivatives from the ethanol and corn-processing industry are currently under development.

How does ethanol production benefit corn farmers?
Besides increasing the markets for corn in general, ethanol manufacturing plants have an impact on local grain prices. In Ontario, the price for corn is estimated to have increased by about 10 cents/bu province-wide, and perhaps as much as 15 – 25 cents/bu more locally to the major Commercial Alcohols ethanol plant located in Chatham, Ontario. This calculates to a net farm-gate benefit of $1.5 million for Ontario corn growers, regardless of whether they market their corn to the ethanol plant or not. For those in the local higher demand area, the benefits are proportionately higher.

Why should ethanol be produced from corn rather than other materials? Aren’t there more lucrative value-added opportunities for corn as an industrial feedstock in the manufacture of biobased product?
Ethanol manufactured from corn is a ‘market-ready’ technology that can provide significant social and environmental benefits now as well as enhancing markets for corn producers. Technology to extract higher value co-products during the corn ethanol production process will also improve the economics of the existing grain-based manufacturing system. It may well be possible at some future time that a broader range of value-added opportunities for corn may be available: such work has already begun, and we anticipate vast expansion within the next decade. It may also be possible in the future that ethanol can be produced as efficiently from raw materials other than corn: however, that is not currently the case. Denying presently available benefits comes with significant social and environmental costs.

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