Canadian process for waste-based ethanol may be commercialized abroad

Monday, January 09, 2006

OTTAWA (CP) - A small Canadian company with revolutionary technology for making ethanol from straw is under growing pressure to build its first plant abroad.

Iogen Corp. is a world leader in making so-called cellulose ethanol from waste residues of agriculture, rather than from edible wheat and corn. The ethanol can then be used as a fuel for vehicles. Cellulose ethanol is environmentally far superior to conventional ethanol because its production does not require the fuel and chemicals involved in grain farming. Instead, the raw material is waste.

On the weekend, Volkswagen announced it would participate in a feasibility study on building a plant based on the Iogen process in Germany.

Iogen vice-president Jeff Passmore said Monday it was the first time to his knowledge that a vehicle manufacturer has considered becoming involved in fuel production.

He said Volkswagen's interest stems from tough European Union objectives for reducing greenhouse emissions from transportation to comply with the Kyoto protocol.

"This is a signal that you need to take an integrated approach. In the past, people have looked at the fuels and the vehicles in separate silos."

Canada has no regulations on greenhouse emissions from vehicles, nor are any planned. The government is relying on a voluntary commitment by manufacturers to curb emissions.

Passmore said Iogen was in discussions with Industry Canada about building a plant in Canada before the election, and the company was close to choosing candidate sites in Saskatchewan and Alberta.

He said the United States is also in the running for the first plant, especially since passage this summer of an energy bill that provides loan guarantees for ethanol production.

Potential straw supplies have been lined up in Saskatchewan, Alberta and Idaho.

"We're not walking away from Canada or the United States but we're having a closer look at Germany."

Canada's prospects have been enhanced by promises from the major political parties to require that all fuel contain five per cent ethanol or biodiesel.

Tim Haig of the Canadian Renewable Energy Association said the five-per-cent mandate is "huge" but Canada may yet lose some of its most promising alternative fuel technology to foreigners.

"I think we have the opportunity to become very bankable in Canada and it just depends on the fine print of whatever the renewable fuel standard turns out to be."

The Canadian Petroleum Products Institute remains concerned about mandatory standards for renewable fuel and is calling for a task force to examine the issue.

The problem is that three provinces have now come out with incompatible requirements said spokesman Dane Baily, vice-president of the institute. He said a carefully considered national standard is needed.

© The Canadian Press 2006