Sask. ethanol grant program extended into 2012

Plans for Saskatchewan to merge its ethanol grant program into a federal fund are on hold pending a major review.

The province said Friday it will maintain its ethanol grant program (EGP) under “current criteria” until its “comprehensive” review of the program is complete, expected in 2012.

“This will help Saskatchewan ethanol producers by providing stability and reliability while also ensuring local jobs are maintained,” Meadow Lake MLA Jeremy Harrison, the province’s minister of enterprise, said in a release.

The province said Friday that its 2010-11 budget had “considered” harmonizing its EGP with federal programming.

Then-finance minister Rod Gantefoer’s budget in March called for $12.2 million in savings by restructuring the EGP, currently a 15-cent-per-litre subsidy paid to companies that blend ethanol with gasoline.

Instead, the budget said, the grant would have taken the form of a credit paid directly to local ethanol producers for the first 25 million litres produced. The EGP would then provide nine cents per litre for small ethanol producers (capacity to produce up to 25 million litres) and six cents per litre for large producers.

But in consultations with the ethanol sector heard such a move “might have resulted in less market access for small ethanol producers, and could have potentially jeopardized their viability.”

The extension of the EGP as it stands will buy time for officials to work with fuel companies, the ethanol industry and farmers to develop “predictable long-term programming” beyond 2012, the province said Friday.

The province noted it expects to put up an estimated $23 million in 2010 in support for the ethanol industry, the most provincial funding for the industry since the program began in 2002.

Brad Wildeman, president of ethanol and cattle feedlot firm Pound-Maker Agventures at Lanigan, Sask., said in the province’s release that the EGP is “important to our overall success,” referring to the largely rural-based ethanol sector.

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