Iogen vice-president Luis Scoffone, left, Transport Minister John Baird, centre, and Iogen CEO Brian Foody take part in the opening of the first gas station to sell gasoline containing biofuel made from wheat straw. (Fred Chartrand/Canadian Press)

An Ottawa gas station has become the first in the world to sell a new eco-friendly ethanol for vehicles made from non-food portions of wheat straw.

The Merivale Road Shell station is selling gas blended with 10 per cent cellulosic ethanol, produced locally at Iogen Energy Corp.'s demonstration plant. Privately owned Iogen and Royal Dutch Shell are partners in the plant, which produces 40,000 litres of clean-burning fuel a month.

Cellulosic ethanol is far cleaner than conventional fuels, according to Shell, and a key part of the company's investment and development program in sustainable biofuels.

The station will sell the blended gas for a month. Shell officials say the next step is to open up a manufacturing facility in Saskatchewan to produce more fuel to expand to other Shell stations.

Other major gasoline retailers, from Suncor Energy's Sunoco operations, to Petro-Canada and Imperial Oil, have also been selling cleaner fuels blended with ethanol and other additives.

"There is enough cellulosic, or enough potential to make cellulosic ethanol, to replace 30 per cent of all our petroleum consumption," said Iogen Corp. CEO Brian Foody. "That means we'll see it in all of our fuels."

Graeme Sweeney, Shell's executive vice-president for future fuels, agreed, saying production of clean-fuel gasoline can be expanded further.

"While it will be some time before general customers can buy this product at local service stations, we are working with governments to make large-scale production economic," Sweeney said.

Iogen and Shell say the added ethanol will not raise the price of gas and will give the same mileage as regular gas.

Federal Transport and Infrastructure Minister John Baird, who took part in a news conference at the station Wednesday, called it a step forward for biofuels.

"The fact that it is created here in Canada reduces our need to import oil. So it keeps more Canadian dollars at home," he said.

Royal Dutch Shell, which is based in England and Holland, has operations around the world, and is listed on the London, Amsterdam, and New York stock exchanges.

In Canada, the company is a major oilsands operator, natural gas and chemicals producer and runs a countrywide network of gasoline stations.

Privately owned Iogen is a 35-year-old company that has been producing cellulosic ethanol at its Ottawa plant since 2004.

With files from The Canadian Press