Is ethanol a good strategy to reduce Ontario’s greenhouse gas emissions?

As one strategy to reduce Ontario’s greenhouse gas emissions, the government has legislated to add corn-based ethanol to gasoline. In 2018, the Government of Ontario decided to increase the ethanol from 10% to 15%, which would redirect approx. 1/2 Million acres of prime farmland to ethanol production – the largest structural transformation of the agricultural system and land use in general. Many climate-aware environmental organizations have supported this increase of ethanol as a GHG mitigaton policy, mostly without considering the direct and indirect impacts on a changing use of farmland. Is corn-based ethanol really a strategy to curb Ontario’s environmental impacts? This blog gathers relevant data.

*Disclaimer – This blog reflects the current state of my knowledge. It does not reflect the opinion of any institution, and my understanding will change as I learn more. The purpose of this blog is to summarize information, stimulate thought, raise conversation, and serve as a basis for further studies.

1.     Ontario government passed regulation to increase ethanol in our gasoline

In 2018, Canada’s most populous province Ontario announced that it is mandating an increase in the ethanol content of gasoline from the current 10 per cent, to an eventual 15 per cent in ‘regular’ grade fuel.  Ontario is set to gradually increase the ethanol percentage in gasoline to 11 per cent by 2025, 13 per cent by 2028 and 15 per cent by 2030 (see OntReg 013-4598). Public consultation on the regulation (under ERO-013-4598) occurred over a 45-day period between February 12, 2019 to March 29, 2019 and on the previous version of the technical guideline (under ERO-019-1030) over a 30-day period between December 16, 2019 to January 15, 2020. The ministry also held consultations and meetings with stakeholders during the consultation periods.

This regulation passed with little notice, and only received 68 comments. Several biofuel companies commented positively. The boating industry and several vehicle owners raised concerns about more ethanol in their engines. Only two comments (one private individual and the City of Hamilton – Health department) expressed concern how biofuel expansion absorbs more farmland, and redirects farmland away from food production. A clean economy alliance (incl. Environmental Defense and the Atmospheric Fund[1]) applauded the idea of reducing GHG emissions but at no point mentioned how this demand for land increases pressure on farmland, food systems and natural habitat. The Ontario Federation of Agriculture also submitted an approving letter ([2]), which was not posted as official comment.

2.       How much land is Ontario using for ethanol?

The Integrated Grain Processors Co-operative (IGPC) quotes Syngenta Canada data, a division of the multinational biotech and chemical company: 90% of the ethanol used in Ontario (about 1.2 billion litres in 2022) is also produced in the province. That represents about 110 million bushels of corn, or about 3 million metric tonnes of corn destined towards annual ethanol production. That figure represents over a third of the province’s entire annual provincial corn harvest (source).

According to data by the Province of Ontario ([3]), the region has produced 370 million bushels in 2022, on an area of 2,276,100 acres. This makes up 61.7% of all Canadian corn production and takes up much of the most fertile lands in Southern Ontario (StatCan). Ethanol is absorbing 33% of that (GFO), or ~750,000 acres. In comparison, Toronto’s greenbelt covers a total area of 2 million acres. Of these, ~725,000 are protected as wetlands, forests, and grasslands; 750,000 acres are highly productive farmland (source) – about the same area as is used for corn ethanol. The land surface for ethanol is slated to grow by about 50% in 2030, to 1.13 million acres. This data estimate suggests 375,000 new acres in corn for ethanol. The Federal Economic Development Agency for Southern Ontario celebrates the new 57 jobs that it created in distilleries, or one additional job for approx 13,000 acres of land used for corn production.

Statistics Canada celebrates the rebound of gasoline sales in Canada, which is again rising after a brief drop from pre-covid 45 billion litres to 39 billion litres in 2020 (Source). Ontario’s motor gasoline demand in 2019 was 1,192 litres per capita, 6% below the national average of 1,268 litres per capita (Source). With an approximate use of 2 m2 per one liter of ethanol, and 10% ethanol content, the land demand for gasoline is approx. 240 m2 with a 10% ethanol percentage, increasing to 360 m2 for a 15% ethanol percentage. Ontario-wide, this demand for land accumulates to 0.9/1.3 million acres for 10%/15% respectively, or 9,000/13,300 one-hundred acre farms cropped “fencerow to fencerow”. The increase of 10% to 15% increases land demand by 440,000 acres, or 4,400 farm properties.

Table 1: Per Person use of ethanol and demand for land

Table 2: Demand for land for ethanol production, Ontario, based on 2m2 per litre ethanol

Looking at other North American regions, Ontario is lagging far behind in the potential to grow corn for ethanol. In the US, on average 40% of all corn is turned into ethanol, or 15 Billion bushels in 2021 (Alternative Fuels Data Center, 2022). Iowa is the leading region, producing >30% of total US ethanol (IowaCorn). Iowa converts between 55% and 70% of its corn harvest into this gasoline additive, the remainder is dried as distillers grain (feed for cattle and grain). US-wide, the total corn acreage increased by 6% from 2022 to 2023, from 89 Million acres to 95 Million acres (USDA). Around 40 Million of these are grown for ethanol. In comparison, the US irrigated 12 million acres of corn, and 58 Million acres in total (USDA). Overall, irrigation is increasing in the center region (especially Nebraska and along the Mississippi river in the states Mississippi, Arkansas, all the way to Michigan), while water shortages force a reduction of irrigation in California, Florida,  and the dust bowl states (Texas, New Mexico, Colorado, Kansas). While corn is not the prime land use in these drying states, its production certainly occupies prime agricultural land that forces an intensification elsewhere.

Economic margins for ethanol processors, including the by-product of distillers grain, are $1-$2 per bushel of corn (Iowa Farm Bureau, 2023). With Iowa’s high yields around 200 bushel/acre, this adds up to $200-400 of processing margin per corn acre. An economic analysis suggests that “margins continue to sit at or slightly above breakeven levels, which is typical for a competitive market.” This also means farmers have no financial levy to implement stewardship practices, such as cover crops or tree lines.

Ontario’s farm organizations are celebrating the recent announcement as a major breakthrough for their sector, which will ensure strong and secure corn markets into the distant future (e.g. FarmOntario, 2018). The Grain farmers of Ontario have launched an education campaign directed at the public that hails the benefits of such a government-created market. However, is this really a reason to celebrate?

3.     How much does the ethanol by-product Distillers Grain reduceland demand?

To understand the pressure on land and ecosystems, it is first necessary to understand some conversion numbers on ethanol processing and beneficial byproducts. One bushel of corn (25kg) can be transformed into approx 11-12l of ethanol, plus 7.5 kg Distillers grains. With Ontario’s average yield of 160 bushel per acre, one litre of ethanol thus requires about two m² of farmland in corn, and additionally yields 700g dry matter of Distillers grain ([4]).

Distillers grain is a popular feed for cattle, dairy cows, and swine ([5]). Distillers grain is a suitable substitute for finishing feed, with roughly triple protein content than corn grain. In one ton of complete finisher feed, adding 200 Ibs of corn dry distillers grains (plus 3 lbs of limestone) will replace approximately 177 Ibs of corn plus 20 Ibs of soybean meal ([6]).

For longer transportation and storage, distillers grain also  requires drying, usually an energy-intensive process with carbon footprint. I am not aware how these GHG emissions from biofuel processing are factored into Ontario’s corn ethanol calculations.

Table 3: Nutrient content in corn grain and distillers grain. Source

With respect to landuse, each kilogram of dry matter of ethanol distillers grain replaces around 885g of corn grain, plus 100g of soy bean due to its enriched protein content. One acre farmland can produce 4t of grain corn. Ethanol fermentation converts this harvest into 2,000 litres ethanol plus 1.2 t of dried Distillers grain (Source: Valero), which replaces 0.36 acres of feed crop (soy and corn). One third of the farmland used for ethanol is thus recovered because the byproduct distillers grain replaces feed production.

Table 4: How much land is saved with distillers grain?

Fermentation enriches microbial proteins from yeast, which are an excellent feed replacement for inferior soybean proteins. Dairy farmers consistently report how cattle love distillers grain and prefer it to soybean alternatives. The suitability of ferment as dairy feed is long known: Before refrigeration was invented, early urban dairies had evolved around breweries and could deliver milk quickly without long transportation.

According to the Government of Canada, “the ethanol fermentation process uses a combination of antibiotics to avoid bacterial acidification of the yeast (ampicillin, monensin, penicillin, streptomycin, tylosin, and virginiamycin, either alone or in combination). However, the Veterinary Drugs Directorate (VDD) of Health Canada indicated that the maximum inclusions rate given by the ethanol industry, the antibiotics ampicillin, penicillin, streptomycin, and virginiamycin should not result in detectable residues. These antibiotics are thus unlikely to pose adverse health risks to humans and food animals, or to contribute to the development of antibiotic-resistant bacteria. However, VDD also determined that monensin and tylosin are unacceptable due to their toxicity to certain animals” ([7]).

While antibiotic concentrations are below regulatory limits, an epidemiologically relevant question remains unanswered: How does this cocktail of antibiotics create resistant strains of bacteria? And how does this antibiotic resistance transfer into cattle, once it is fed daily and at an enormous scale with antibiotic-resistant “pro-biotics”? How will this permanent stream of resistant microbes into dairy cows percolate into broader antibiotic resistance? We will soon learn about this real-time microbial experiment of a continental scale. Again, history teaches us about unexpected risks: When breweries brought dairies into US cities, bacterial contamination of raw milk unexpectedly became worse, despite shorter transportation distances, because the indoor life of cows raised hygiene and immunological issues. Eventually, lawmakers required the pasteurization of milk.

4.     GHG benefits and negative impacts of corn-based ethanol

What is the contribution of ethanol on our GHG emissions in transportation?

Corn ethanol has lower greenhouse gas emissions than gasoline. Mixing gasoline with ethanol proportionally reduces emissions. But how much does this sacrifice of our biosphere reduce the overall emissions of transportation? A quick calculation of per-litre emission reductions clarifies.

According to the Government of Canada emission calculator, 1 liter of gasoline emits about 2.35 kg of CO2 equivalent when combusted. According to IGPC, 1 litre of ethanol only has 46% of these emissions, or 1.08 kg eCO2 – a little less then half (an often-cited study is Lewandrowski et al., 2018, who estimate 39%). A 10% ethanol mix has 10% * 1.08 + 90% * 2.35 = 2.22 kg eCO2, and a 15% mix has 2.16 kg eCO2.  This is still 95% and 92% of original emissions, on a per litre basis. Or, adding 10% ethanol allows us to increase gasoline use by 6% without increasing emissions (or by 9% with 15% additions). Even a 20% ethanol mix, which engineers warn against due to the wear on engines, would still have 89% of pure gasoline emissions. And more and more vehicles are using higher octane premium gasoline that is exempt from ethanol! Electrification, land use planning, commuting distances, lifestyle choices, and public transportation have far higher potential to reduce transportation emissions.

Several studies question the emission data that the processor industry IGPC is using, and warn that ethanol production actually has far more emissions. The International Council on Clean Transportation (ICCT), warns that ethanol corn replaces existing landuses and thus encourages the conversion of new land into cropland. Environment and Climate Change Canada (ECCC) decided to “initially” rule out the calculations, known as “indirect land-use change,” in a December 2017 document that lays the groundwork for Canada’s upcoming clean fuel standard (National Observer 2018). This simplification remains in effect in 2023. A recent study by the University Madison found that corn ethanol, if taken into account all emissions, actually has 24% more emissions than regular gasoline (Lark et al., 2022)!

Officially, total emissions savings in Ontario range around 2.25 Megatons of CO2 equivalents per year, using the prescribed GHG accounting of 46% emission intensity of ethanol compared to gasoline. This aggregate number is derived by Ontario’s average gasoline use per capita, 1,192 litres per year, Ontario’s population of 15.6 Million that is growing by 2% per year (Gov of Ontario), and 95% of emission intensity of a 10% ethanol mix if GHG emissions from indirect land use impacts  are assumed to be zero. This calculation estimates total personal gasoline emissions at 38 Megatons eCO2. This is in line with official reporting numbers (Ontario total GHG emissions are 149.6 Megatons eCO2, with total transportation making up 32% or 47.8 Mt eCO2 – slightly more, as it also includes diesel for trucking (Gov of Canada).

Total emissions from land conversions in Ontario are about 3 Megatons eCO2. A recent report by the National Farmers Union Canada dis-aggregates ECCC national GHG emission data by province for the first time (Table 1). ECCC estimates that the increase of annual cropland in Ontario alone is responsible for 3 Megatons of emissions!

GHG benefits from corn ethanol are reduced further if taking the reduced lifetime of engines and thus entire vehicles, due to the stronger corrosive wear of ethanol. While many modern engines are built stronger and can handle ethanol better, mechanics and experts report frequent tear on engines. Increase of construction-related emissions count against savings in combustion emission (I am not aware of sources for numbers).

There are other concerns:

• Through competition for land, corn ethanol increases the price of food. While hard numbers are not available, this price increase is believed to be significant (see CBC 2008, Genetic Literacy Project 2015).
• New generations of biofuel technology propose to move from using starches/grains to the cellulose, e.g. corn stover ([9]). Regenerative Agriculture advocates value this stover, as it returns biomass to the soil and helps maintaining some of the soil’s sponge functions- once this stover is removed, soil degradation will accelerate and reduce the corn field’s water retention capacity of corn even further. Biofuels can thus impact soil health by reducing the remaining soil carbon. And it allows totally new cropping and harvesting of fibre plants.
• In Ontario, the ethanol boom is contributing to the rising demand for annual cropland. This cropland stems from converting pastures and overgrown “bush-land” into annual cropland. This brings about significant modifications of topography (leveling of land), increased drainage, and removal of tree lines and windrows.
• Furthermore, ethanol corn is a dramatically simplified and specialized production system that is well-suited for “farming without farmers” by financial investors (see Section 5.4). Both crop production and the use of distillers grains are well suited for mega farms, with many negative impacts of rural economies, communities, and the environment.

For comparison, see also other studies (Genetic Literacy Project 2023, 2022, The Conservation 2016). Canadas Clean Fuel Standard offers several criteria to safeguard against these concerns, with land use and biodiversity criteria. The Grain Farmers of Ontario were opposing sustainable land use requirements on corn production as they fear competitive disadvantages in trade. The final version of these criteria was submitted to the World Trade Organization in 2022.

Our society will not contribute a significant emission reduction with corn ethanol, and transportation emissions cannot depend on first-generation biofuels without irreversibly damaging remaining ecosystems that moderate global warming impacts through the small water cycle. With 40% (and growing) of all US corn dedicated to ethanol today, and 30% (and growing) in Ontario, transportation emissions are still rising. Now this sector drives the largest increase of land use, at the sacrifice of food and Living Landscapes. Within the Ag sector, this boom also consolidates the financialization of agricultural land, with a deep structural transfer or land ownership.

Indirect land use changes – the big unknown

When estimating the total emissions from the production and burning of corn ethanol,a number of factors are being considered. There are emissions associated with the production of corn (e.g. machinery use, use of agrochemicals), the drying of grain corn with natural gas,  the processing of grain corn into ethanol and feedstock, and the energy used to dry this feedstock and transport both ethanol and feedstock to its use destination. Together, these emissions add to about 50% of gasoline emissions.  The burning of ethanol is then considered GHG neutral, because all carbon was previously sequestered by the plants (Terry Daynard).

In addition to these production emissions, there are direct and indirect emissions from the landuse of corn production.

• Direct land use changes are those interventions in the land that are necessary to first produce ethanol with the given production system (machinery type and size, crop rotation, chemical usage). Direct land use changes include drainage, removal of trees, conversion of marginal areas into cropland, and changes of soil health over time that are directly related to the shift from the previous land use to corn.
• Indirect land use changes happen elsewhere because corn ethanol increases demand for land and removes production area out of other crops (including corn for feed). Indirect land use changes result from reduced supply of food and feed crops:
  • Converting pastures, new or marginal land into cropland,
  • Intensifying land use by converting pastureland into annual cropland,
  • Changes of carbon sequestered in the landscape vegetation (trees) and soil carbon.

Regulations in Canada account for direct emissions from land use change, but not for indirect emissions. The Government of Canada Clean Fuel Regulation states that “indirect land use changes occur in response to land or crops being diverted for biofuel production elsewhere in the global agricultural system. Indirect land use change represents changes that would not have happened without an increase in biofuel demand”. Furthermore, “Indirect land-use changes will not be accounted for in calculating the lifecycle carbon intensity of a fuel at this time. However, we are considering using proxies to account for some of these indirect land-use impacts.” Given that Canadian GHG accounting omits the potentially largest GHG impact of corn ethanol production, it remains unclear whether ethanol has any GHG benefits over fossil gasoline. Clarification is urgently needed.

In Canada and the US, any non-GHG impacts of this landuse conversion are disregarded, as the regulation solely considered the balance of sequestered carbon. In addition to the GHG emissions, the government intervention into the market shifts several aspects of the agricultural economy, land prices and land markets, habitat and biodiversity, and the water cycle, or how the economic benefits from the ethanol market are distributed across the overall population. Any holistic policy assessment would also consider these non-GHG impacts on Canada’s economy and on Canada’s commitments to preserve biodiversity, water quality and quantity, and economic equity.

It is not possible to link any particular land conversion to corn ethanol production, it is fair to assume that land need for food production remains similar, whereas feed markets slightly adjust due to the increased availability of distillery grain. Not all of these land conversions are exclusively linked to ethanol, but the additional pressure on land when increasing ethanol production is still massive. As farmers have to account for direct land use change emissions, they are not incenitivzed to convert bushland into ethanol land directly. Rather, direct land use change emissions are zero if using existing annual cropland for ethanol, e.g. feed corn into ethanol corn. Markets then ensure that additional land is converted into feed production, as indirect land use change emissions (Figure 1).

Figure 1: Direct and indirect conversion of land for ethanol production

Figure 2: US domestic corn use over time. Source: USDA

Indirect land use changes remain the main unknown when estimating the GHG emissions in corn ethanol. Scientific estimates vary between relatively minor (<10% of gasoline emissions) to dramatic (>100% of gasoline emissions) (Terry Daynard). The recent study by Lark et al., 2022 sheds light on this number with recent land use data. Their study concludes that “the US Renewable Fuel Standard increased corn prices by 30% and the prices of other crops by 20%, which, in turn, expanded US corn cultivation by 2.8Mha (8.7%) and total cropland by 2.1 Mha (2.4%) in the years following policy enactment (2008 to 2016). These changes increased annual nationwide fertilizer use by 3 to 8%, increased water quality degradants by 3 to 5%, and caused enough domestic land use change emissions such that the carbon intensity of corn ethanol produced under the RFS is no less than gasoline and likely at least 24% higher.” The Renewable Fuel Association has raised methodological weaknesses in this study, including that it is invalid to assume that all demand increases for ethanol are solely driven by the US Renewable Fuel Standard, and several inaccuracies when estimating price effects, soil health effects, and when extrapolating from available data. With given uncertainties of all available research on indirect effects, the Renewable Fuel Association demands to disregard any impact studies from the political evaluation process because it the science is uncertain and “biased’ (RFA). At the same time, indirect impacts are known to exist and good unbiased estimates are not available.

Loss of soil carbon from agricultural intensification accounts for much of the indirect land use impacts. For 1% of total soil organic carbon (TSOC), each acre contains about 8 tons of carbon. If released, this carbon would add 29 t of eCO2 greenhouse gas equivalent. Typically, pastures in Ontario have about 5% of soil carbon, whereas the average cash crop soil only contains 2.2% of TSOC within appox. 5 years of conversion. The conversion of a pasture into corn cropland would emit 82t eCO2/acre over a timeframe of approx. 5 years, or 16 tons annually. These emissions are about 8 times larger than the overall emission savings from ethanol production (assuming 2,000 litres of ethanol per acre, and an emission saving of 40% of ethanol compared to gasoline, the emission savings from each acre of corn harvested are about 2 tons annually). In other words, if 8 additional corn ethanol acres only trigger one additional conversion of pastureland into annual crops, then the indirect GHG emission savings from corn ethanol are nullified even if using the current, incomplete data on ethanol emission savings. Any non-GHG impacts of this transition on biodiversity and market structure would be in addition.

While overall ethanol production has leveled during the years 2015 until today, new regulations are kicking in in the US, as the Renewable Fuel Standard is updated, and in Canada. For example, the Province of Ontario has already passed legislation to increase ethanol to 15% (see above).

What do others say?

Internationally, more and more negative impacts of the ethanol boom are becoming apparent. In 2015, an international group of scientists sent a warning letter to USDA (Biofuelwatch, 2015[8], bold added by the author):

1. The additional demand for grains, oilseeds and sugars brought about by increased biofuel production will indirectly bring about the conversion of land currently under forest or other natural ecosystem into agricultural land, with the concomitant release into the atmosphere of carbon stored in trees and soil. This land is not necessarily in the [same region] but may be anywhere in the world. The increase in global warming engendered by the carbon release from this so-called indirect land use change will cancel out any benefit derived from the biofuel for decades or even centuries to come.
2. The high application rates of nitrogen fertilisers required for maximum grain, oilseed and sugar production lead inexorably to increased emissions of the GHG nitrous oxide, which has a global warming impact 300 times that of carbon dioxide. Research has demonstrated that, when proper account is taken of these emissions, first-generation biofuels based on cereals and temperate oilseeds can actually increase global warming, irrespective of any land-use change issue.

Beside these established scientific arguments, encouraging production of first-generation biofuels also raises serious moral questions. The increased threat to food security for many of the world’s most vulnerable people, which has subsequently sparked protests worldwide, is an inevitable consequence of the increased competition for agricultural commodities coming from the biofuel industry.

5.     What other pressures on farmland compound the pressure from biofuels?

The use of farmland for biofuels needs to be regarded with other uses of land:

5.1.           Loss of farmland to development and tree plantings.

In 2016, Ontario has lost 175 acres of farmland every single day. In 2021, this rate has increased to 319 acres per day (Farmland Trust). The annul loss of farmland has increased from ~62,000 in 2016 to 113,000 acres in 2021. If the current trend continues, farmland loss will reduce the total available by 800,000 acres in 2030, in addition to the 500,000 acres that regulation is directing to ethanol. The main driver of farmland loss is certainly development, but also the reforestation of land by non-farm landowners.

5.2.           Production of food and feed

Today, Ontario is producing food and feed on approx. 7.3 Million acres, plus approx. 700,000 for grain corn for ethanol. The latter area for ethanol grain corn also delivers distillers grain, to the equivalent of 252,000 acres of feed production.

If farmland loss and biofuel production continues as planned, the area for ethanol corn will grow to almost 1.3 Million farmland (with distillers grains providing the feed equivalent of 0.47 million acres). 15% ethanol in gasoline effectively removes 0.85 million acres from food and feed production. This will inadvertently put pressure on food and land prices in Ontario and elsewhere.

Farmland use for different products, 1981 to 2022. Source: Omafra

5.3.           Ecological functions and services

Intensive industrial agriculture is reducing the ability of landscapes to provide ecosystem functions and services. These include, but are not limited to:

• Healthy soil rapidly infiltrates and holds water, which is then available for plant transpiration and groundwater percolation. This reduces or entirely prevents soil erosion, surface runoff, downstream flooding, and subsequent drought.
• Healthy watersheds hold water on the land – in soils, wetlands, and a myriad of cascading waterways with ponding areas. This decreases runoff, soil erosion, nutrient runoff into streams, and downstream flooding.
• Living landscapes are cool. Plant transpiration is nature’s own air-conditioning unit that cools surfaces, fosters the formation of low-hanging clouds, and prevents summer heat domes.
• Living landscapes also provide habitat to a diversity of species (plants, animals, fungi, microbes).

The conversion of large areas of land into annual crop monocultures, especially if combined with frequent plowing or use of agrochemicals, can disrupt these ecological functions. In dry-lands, this process is generally referred to as desertification. In temperate regions, ecosystem functions can equally degrade and cause wildfires, deforestation, heat domes and dust bowls. Southern Ontario experienced such a dust-bowl during the Early 20th century.

Land degradation / desertification was a core driver of many civilization collapses during humankind – the Mesopotamian civilizations, the end of the copper age in South-Eastern Europe, the Greek and Roman civilizations, the Arab civilization, the Maya civilizations, all collapsed in times when soils were degraded, watershed functions collapsed, and the regions experienced sustained droughts and flooding. Food shortages and other, social factors together led to a breakdown of societal resilience.

5.4.           Increasing financialization of agricultural lands

Since the 2000s, investors are increasingly bidding for, and buying up, farmland. ‘Financialization’ describes a larger societal process in which financial actors, motives, markets, and institutions are growing their influence into many sectors of the economy. The Parkland Institute published a report about farmland being financialized in Alberta, which “contributes significantly to farmland prices rising far beyond the land’s agri-economic value, the rise of tenant farming and rental rates, and changing relationships to and prioritization on the land” (Source).

In Ontario, retiring farmers who sell farms of 500 – 1000 acres, report that they receive an offer from a financial institution almost on the same day when posting their farms. Even if few farmers choose to sell to these investors and continue looking for alternative buyers, financial institutions dramatically impact the land market by setting the minimum sales price. Only few buyers can compete with the bidding, notably very large farmers who can use their land assets to leverage a new purchase or urban entrepreneurs who write off the costs of their farmland investment venture from the taxes paid on their profitable other businesses (while ultimately speculating on an increasing farmland values with long-term financial gains). Conversations with local farmers indicate numerous examples of the latter, with buyers being developers, owners of restaurant chains or private nursing home chains.

Many farmers and farm organizations are opposed to the increasing financialization, believing that it will deteriorate the sustainability of farming and rural communities (e.g. NFU campaign, [10]). Meanwhile, farmland is increasingly advertised by investment fonds, as long-term investment (e.g. AgInvest Farmland) and by accountants, as strategy to save business taxes (e.g. KGH).

A 2021 study by Melissa Davidson, University of Manitoba (^[11]) discusses the impacts of this financialization. Work is usually done either via annual rental, or entirely by contractors that the farm owners manage from their distant homes.

• Farms that are very large and/or owned by outsiders no longer participate in the local rural economy, nor in local communities. While local owners of small farmers purchase almost everything locally (their own household needs, business services, business inputs), larger farms purchase everything out-of-region.

Farmland is usually “simplified” or “consolidated” or “cleaned up” for use of large-scale machinery that is common for custom contractors. This land consolidation includes the removal of bush and tree lines, leveling of unevenness, often the removal of houses and other structures to reduce municipal taxes, and full drainage.

• Municipalities suffer twice: they miss out on residential taxes after dwellings are demolished, and they must deal with an increase in traffic of very heavy machinery on their road systems.
• Many environmental indicators also decline with outsider ownership:
  • While contractors often use latest technology, they also tend to be less flexible in responding to weather conditions, and often drive on wet soil, adding to compaction.
  • Rapid land drainage increases erosion of watersheds, risk of downstream flooding, and subsequent risk of drought.
  • On-farm habitat tends to be reduced dramatically whenever land ins converted into annual cropland with heavy use of agrochemicals. Land consolidation leaves no habitat for herbaceous plants and trees, insects and birds, amphibians or reptiles, microbial soil life, or any other life form. In particular, grassland birds are under massive decline as pastures are converted into cropland.
  • Outside farmland ownership is almost entirely motivated by financial profits. As soil health is currently not impacting land value, while land consolidation increases the value especially for outside investors that set land prices, many farms rapidly loose soil health and soil carbon after ownership is transferred.

5.5.           Other biofuels are on the rise

Ethanol is not the only use of land for biofuels. Additional to corn ethanol, lobbyists are pushing for several other uses of land for biofuels in Canada:

• Wood pallets from clear-cut forestry can be exported to Europe, where it is still classified as sustainable source energy and rewarded with tradable carbon credits. As more and more coal plants in the UK and Germany are converted to wood burning, the pressure on Canada’s forests is rising further.
• Aviation biofuels offer fuel with very high energy content. These biofuels are derived from Jatropha, algae, tallows, waste oils, palm oil, Babassu, and Camelina (bio-SPK); from solid biomass using pyrolysis; or with an alcohol-to-jet (ATJ) process from waste fermentation (Wikipedia). Sustainable aviation biofuels don’t compete with food production or natural forests. Such sources exist, but due to higher costs, they are utilized only at research scale.

Biofuel production (especially first-generation corn for ethanol) still relies on growing practices such as plowing and pesticide use, which can rapidly degrade land, disrupt ecological functions and services, and undermine local environmental cooling from the transpiration of vegetation, and the collapse of the small water cycle.

The GHG and other environmental and economic impacts of each biofuel is different, and requires separate scrutiny. Future cellulose-based biofuels may reduce the land need per litre of ethanol by a factor of 10, which changes the concerns raised earlier. Nevertheless, in their entirety, landuse for biofuels in the name of climate action have turned into the fastest-growing pressure on farmland that already is at par with land converted for development.

6.          Summary & Recommendation

Farm organizations like the National Farmers Union are highly critical of biofuels, mostly because the benefits from GHG reductions are far outweighed by the negative impacts of the biofuel boom. Main arguments are

• Several environmental externalities that are not taken into account through a mere GHG lens (e.g. the destruction of habitat from an increasing land use intensity);
• Ethanol puts additional pressure on food production, and increases the price of food that is already problematic for many eaters;
• Corn ethanol is furthering the financialization of agriculture and pushing traditional family farms. Ethanol creates a production system that is highly suited for industrialized and investor-owned production assets including land.

Many environmental organizations have not taken a formal position to the impressive rise of landuse for biofuels, and corn ethanol in particular. Today, the growth of land demand for ethanol exceeds any other farming commodity. Some climate advocates support the increase of biofuels, while other climate advocates indicate that the benefits from ethanol are overstated, because some negative externalities are not fully included, and others entirely disregarded.

Given the tremendous pressure on today’s ecosystems by agricultural expansion, and the apparent goal conflicts when increasing ethanol production on prime farmland, I recommend that environmental and food organizations recognize and advocate for the limited role that ethanol production can have in our transition away from fossil fuels.

7.           References

All links were last tested at publication date, Nov 6, 2023.

[1] https://ero.ontario.ca/index.php/comment/26116

[2] https://ofa.on.ca/wp-content/uploads/2019/03/OFA-letter-regarding-proposed-O.Reg-amendments-ethanol-content-in-Gasoline-under-EPAct-1990.pdf

[3] https://data.ontario.ca/dataset/ontario-field-crops-production-estimate/resource/02daebd7-a430-4220-83fa-7e7afc3d5efa

[4] Conversion factors are variable and depend on the fermentation process and the dryness of the distillery corn.

[5] Allen Trenkle Department of Animal Science Iowa State University, https://web.archive.org/web/20111112062021/http://www.ksgrains.com/ethanol/DDGSFacts.pdf

[6] Wet corn distillers grains with solubles (WDGS)  contain primarily unfermented grain residues (protein, fibre, fat and up to 70% moisture). WDG has a shelf life of four to five days. Due to the water content, WDG transport is usually economically viable within 200 km of the ethanol production facility. Research at Iowa State University has shown that WDGS can be added to corn-based rations for finishing cattle at levels ranging from 10% to 40% of total ration dry matter. When used to replace part of the corn and supplemental protein, WDGS improves feed conversion and reduces feed cost of gain when cost of WDGS (including transportation and storage) is equal to or less than cost of corn on a dry basis.  Dry distillers grains with solubles (DDGS) can be fed to finishing cattle to replace protein supplement and corn. DDGS has an apparent energy value equal to corn grain when fed to finishing cattle at levels ranging from 10% to 20% of total ration dry matter. DDGS is WDGS that has been dried with the concentrated thin stillage to 10–12% moisture. DDGS have an almost indefinite shelf life and may be shipped to any market regardless of its proximity to an ethanol plant. Drying is costly, as it requires further energy input.

[7] Government of Canada, RG-6 Regulatory Guidance: Ethanol Distillers’ Grains for Livestock Feed

[8] https://www.biofuelwatch.org.uk/wp-content/uploads/Biofuels-Scientists-Letter2.pdf

[9] Aghaei S, Alavijeh MK, Shafiei M, Karimi K. A comprehensive review on bioethanol production from corn stover: Worldwide potential, environmental importance, and perspectives. Biomass and Bioenergy. 2022 Jun 1;161:106447.

[10] https://www.nfu.ca/campaigns/farmland/video-archive/

[11] https://dam-oclc.bac-lac.gc.ca/download?is_thesis=1&oclc_number=1357557188&id=e47851f3-cb58-4081-8cdc-b5c2cb0b09c9&fileName=Melissa_Davidson.pdf