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    Canada Launches Fund to Build Ethanol Plants

    Goal is to reduce dependence on imports of renewable fuels from the United States.

    OTTAWA -- Canada earmarked C$60 million ($45 million) to help build ethanol plants starting next year to replace imports of the renewable fuel from the United States, Agriculture Minister Lyle Vanclief said.

    Canada is keen to use its big grain-growing industry to help reduce consumption of climate-changing fossil fuels as part of its Kyoto protocol commitments, which the province of Ottawa ratified late last year, the Canadian Press reported.

    "Presently, we import about 100 million liters (26 million U.S. gallons) of ethanol from the United States on an annual basis and the first thing we want this announcement to do is displace this importation of ethanol," Vanclief said.

    Ethanol is a renewable high-octane, alcohol-based fuel made from converted plant starches, which can reduce carbon monoxide emissions from automobiles. About 7 percent of gasoline now sold in Canada is blended with ethanol and there are more than 1,000 gas stations that sell ethanol-blended gasoline, the government said.

    As part of a drive to limit greenhouse gases, which are blamed for global warming,
    Ottawa is seeking to have 35 percent of the gasoline sold in Canada by 2010 to contain 10 percent ethanol.

    "Ten years from now when you start hearing about things like biorefineries it will have started here. This is a huge step forward for our industry," said Bliss Baker of industry lobby group Canadian Renewable Fuels Association.

    Ethanol from grain has about 40 percent fewer greenhouse gas emissions than gasoline, and ethanol from cellulose fibers such as straw -- a new approach still under development -- has about 80 percent fewer emissions.

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