March 9, 2017…

March 9, 2017

Honourable Glen Murray
Minister of Environment and Climate Change
Ferguson Block 11th Floor 77 Wellesley St West
Toronto ON M7A 2T5

Dear Minister Murray,

Please find attached the Grain Farmers of Ontario’s comments on the proposed Renewable Fuels Standard.

The current mandate that exists for ethanol in gasoline is very important to Ontario’s rural economy and our farmer members. It is our request that your government take the appropriate care to protect the market that has been established for Ontario grown corn as well as ensure that a focus on growth potential from an increase in corn yields achieved in Ontario is considered a priority as the province transitions to a Renewable Fuel Standard.

Sincerely,

Mark Brock
Chairman
Grain Farmers of Ontario Submission

Discussion Paper: Developing a Modern Renewable Fuel Standard For Gasoline in Ontario

EBR Registry 012-7923

Who we are

Grain Farmers of Ontario represents Ontario’s 28,000 growers of barley, corn, oats, soybeans, and wheat. Our farmers' crops cover 6 million acres of farm land across the province, and are a major economic driver for Canada. Ontario-grown corn, soybean and wheat crops generate over $2.5 billion in farm gate receipts, result in over $9 billion in economic output, and are responsible for over 40,000 jobs in the province.

Overview

Thank you for the opportunity to share Grain Farmers of Ontario’s (GFO) input on the Discussion Paper: Developing a Modern Renewable Fuel Standard For Gasoline.

We have three recommendations for the proposal:

1. To protect the current market for corn ethanol that has been established and is primarily met by corn grown in the province and provide mechanisms to help grow the demand for Ontario grown corn as the corn yields increase

2. To develop complementary on-farm programs for corn production that help improve the carbon intensity of corn ethanol so as to ensure that corn ethanol remains a competitive fuel under the new Standard in the near and long-term

3. To create a program that supports Ontario’s established renewable fuel industry by: • Increasing required volumes of corn ethanol in gasoline to 9% by 2020, moving towards 15% ethanol.

• Providing a fuel tax rate for E85 that reflects its energy content, as opposed to its volume, and encourage the Federal government to do the same.
• Adopting an approach whereby volumetric blending targets that work synergistically with low carbon fuel standards as they have in California, Oregon and BC
• Establishing the minimum GHG emission performance of corn ethanol after the modelling framework is established
• Keeping Indirect land use change scenarios out of the program as there is no evidence that supports the ILUC hypothesis
• Incorporating the GHGenius 5.0 in the program as it contains the best available information on corn production in Ontario
• Ensuring transparency is part of the program by incorporating frequent reporting

Background

Grains and oilseed farms provide many solutions for reducing carbon including natural sequestration of carbon and raw material for the production of alternative bio-products to fossil fuels. In recent years, our farmer membership has made significant environmental advancements that have reduced the on-farm carbon footprint and Ontario’s bio-economy is well positioned to grow and meet the demand for a low carbon economy.

Biofuels mandates like the Ethanol in Gasoline mandate and the Greener Diesel mandate deliver rural economic growth and benefits for farmers at the same time as providing cleaner safer fuel for vehicles, protecting Ontario’s environment.

Adopting an approach to transitioning to low carbon fuel standard requires planning and investment Lessons learned from the development of the renewable fuels industry in Ontario should be adopted in the transition to the new Renewable Fuels Standard. A key component included comprehensive programming that supported the feedstock production and the ethanol manufacturers.

Ontario was at the forefront of growing a bioeconomy and the mandate for ethanol content in gasoline was an important first step.

The government in Ontario created a portfolio of programs over 10 years ago to create a domestic ethanol industry including an ethanol mandate to clean-up gasoline. Today Ontario has a biofuels industry that both the Ontario consumer and the Ontario farmer rely on.

These programs were first introduced by government to support the Ontario grain producers and reduce emissions from gasoline and greenhouse gases. Ethanol’s oxygen content and high temperature burn improves air quality by reducing tailpipe emissions including CO, Co2, smog, particulates and NOX and SOx.

Ontario’s visionary approach to building an ethanol industry has created an essential building block for the bioeconomy by establishing biorefineries in different regions of the province.

Farmers not only profit from the biofuels industry because there is a local market to buy their crops directly but the communities that farmers live in prosper from the economic activity generated by the mandate. Some farmers also are investors and shareholders in ethanol refineries. The Ontario ethanol mandate alongside the federal and provincial programs that were put in place to support the industry in its infancy have created a domestic ethanol industry that grain farmers count on.

Ethanol production is not just good for farmers

Over 28,000 grains and oilseed farms in Ontario benefit from ethanol mandates. These farms enjoy a higher farm gate income. The money generated from corn production and ethanol production stimulates farm investment and economic activity in their local rural communities. As an example, one ethanol plant near London, Ontario, produces an annual increase in local spending in the community of $53 million (Doyletech Economic Assessment 2009), and the ethanol plant in Johnstown, Ontario, produces $162 million of increased annual spending in that local community. These plants not only provide a market for corn but they build up the community that farmers live in.

For the individual grain farmer, ethanol mandates mean an increase in corn prices. Comparing corn prices in Ontario to Michigan, ethanol production increased corn prices by an average $0.29/bushel for seven years since 2000. Higher corn yields have caused the recent price decline, but overall corn prices are especially significant because without ethanol production, and the 110 million bushels of corn each year that go into making ethanol, corn prices could have been as much as $0.50/bushel lower in recent years.

The benefit of ethanol mandates to grain farmers is substantive with farm income tripling since biofuels became part of the Canadian economy. Statistics Canada shows this increase in farm income starts after biofuels became an important part of the supply chain. Although biofuels do not account for all these increases, they have a significant impact on the increase. For famers, this means that since 2007 the biofuel industry in Canada has created over 14,000 jobs and $3.28 billion in economic activity.

The biorefineries created by the Ontario government’s ethanol mandate are incubators for innovation and research and development investments that further develop bio-opportunities which also benefit farmers in different regions. Recently, a new plant has opened that produces succinic acid from corn. Car manufacturers are using corn to produce seats and various auto components. Farmers are collecting their excess corn stover and it is being turned into energy. These are all alternatives that reduce fossil fuel emissions and provide economic opportunities for farmers.

As the Ontario government designs the RFS these assets should be considered and built upon.

Planning for increased corn production should be incorporated in the Standard and programming

In Ontario, the ethanol industry absorbs 2.8 million tonnes of corn or 110 million bushels. It is estimated that corn production will increase from an average of 150 bushels of corn to 300 bushels by 2030.This yield increase will be sustainable because it will use the same amount of land as today and will require less inputs. This efficiency in corn production will provide opportunities for the ethanol industry to grow and increase ethanol’s contribution to the environment, as well has open new opportunities for grain farmers. This growth cannot take place without the help of mandates.

On farm practices that reduce carbon need to be supported to improve carbon intensity

Protecting the environment is a priority for grain and oilseed farmers across Ontario. Every year, grain and oilseed farmers are able to produce more crops on less land, as a result of improved farming techniques and advancements in technology. This not only means a lower carbon footprint, but also that Ontario’s grain and oilseed farmers are helping to feed a growing world.

Environmental farm plans have been in place on Ontario farms for over 20 years. Countless hours of training on environmental practices has resulted in a culture, among grain and oilseed farmers, that puts environmental stewardship at the forefront of land management decisions, including preserving soil and using nutrients efficiently. Over 60% of farmers in Ontario practice conservation tillage techniques that provide natural sequestration of carbon. Technologies, like GPS satellites, can map a field to show exactly what fertilizer or chemicals are needed in precise and reduced amounts.

Hundreds of thousands of acres of wildlife habitat and wetlands are located on private farmland providing natural carbon sinks. Many farmers have worked hard to create, improve, and expand these spaces.

These farm practices and technologies have a cost that is ultimately borne by the farmer. Policies need to consider the finite economic resources farmers have to invest in their farms,

We urge the government (MOECC, OMAFRA & Economic Development) to work alongside with the grain farmers to determine a long-term strategy to assist farmers in the transition to low carbon alternatives and help improve the carbon intensity of corn ethanol.

[Original Comment ID: 208705]