Ontario Premier Dalton McGuinty says gas sold in the province will have to contain an average of five per cent ethanol within three years.

McGuinty made the announcement on Friday in Chatham, Ont., home of the province's only major ethanol factory, Commercial Alcohols Inc.

"Ethanol is a cleaner-burning fuel, so this means cleaner air," he told a news conference. "It's made from agricultural crops, so this will be a major boost for rural communities."




Gasoline now being sold in Ontario contains an average of one per cent ethanol.

The premier said more plants will have to be built to supply the gasoline industry with the 750 million extra litres of ethanol required annually. He estimated that will mean 3,000 more jobs and up to $500 million in new investment in rural Ontario.

Ethanol is a type of high-octane fuel additive, produced when corn, wheat or straw is broken down and distilled.

Many environmentalists say requiring drivers to use more of the bio-fuel in their cars and trucks will reduce smog significantly.

However, critics including the National Farmers Union say it takes more energy to grow extra corn or wheat and convert it into ethanol than the fuel actually provides. At the same time, some researchers say ethanol produces more of certain types of pollutants than either gasoline or diesel.

Refiners have warned that consumer prices will rise if they have to add more ethanol to fuel, because it has been expensive to make in the past.

On Friday, McGuinty said wholesale gasoline sellers can meet the new rules, which take effect Jan. 1, 2007, by doing one of two things:

  • Simply blending the ethanol into gas to meet the five-per-cent goal.
  • Buying "credits" from other producers who have used more than the required amount of ethanol in their gas.
McGuinty said the plan will remove an amount of emissions similar to the amount that would be reduced if 200,000 fewer cars were using Ontario roads and highways.

Liberals had promised 10% target

Leading up to the last election, McGuinty's Liberal party had promised to ensure gasoline contained 10 per cent ethanol by 2010.

Manitoba and Saskatchewan have already announced plans to boost the amount of ethanol in gas sold within their borders, to 10 per cent and 7.5 per cent respectively by the end of 2005.

The requirements move in the direction of taking car fuels back to their beginnings. The original Model T designed by Henry Ford in 1908 could run on ethanol, which Ford expected to be the fuel of the future.