Canada invests C$80 mln in Quebec biofuel plant

VANCOUVER (Reuters) - Canada will invest nearly C$80 million ($77 million) to expand a Quebec ethanol plant, the government said on Tuesday, as it promotes the use of the grain-based fuel as a substitute to gasoline and creates jobs.

Ottawa, through its ecoENERGY for Biofuels program, will pump C$79.75 million over seven years into GreenField Ethanol Inc’s Varennes ethanol facility.

The Varennes plant’s capacity will increase to 145 million liters of ethanol a year. Its current capacity is 120 million liters annually, according to the company’s website. GreenField is Canada’s biggest ethanol company.

Compared with gasoline, grain-based ethanol can reduce greenhouse gas emissions by up to 40 percent. For biodiesel, the emissions reduction can be as much as 60 percent.

Canada has earmarked C$1.5 billion for the biofuel industry over nine years.

GreenField produces 450 million liters of fuel ethanol a year, which is sold at 1,300 gas stations around Canada. The Varennes plant began operations in 2007.

Neither the company nor a government spokesperson were immediately available for comment.

Reporting by Nicole Mordant; Editing by Frank McGurty