The United States has taken the lead in ethanol exports over Brazil according to the new study, “U.S. & Brazil Ethanol Outlook to 2022,” published by Hart Energy. The report predicts that the U.S. will retain this position into 2022 and beyond. Another major finding is that Hart Energy does not believe the U.S. ethanol industry can meet two major policy goals: Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS). The reason is that these production goals do not meet the realities of commercialization and availability. However, the report maintains that changes in policy are imperative for production goals to be met over the next several years.
“Much of the focus has been on the ‘blend wall,’ biodiesel, and cellulosic biofuels targets of the RFS program in the public forum,” said Tammy Klein, assistant vice president of Hart Energy. “But what’s so striking to us is that Brazilian ethanol is needed to meet targets under those programs — and our forecast shows it will not be available at critical points in the study period.”
Klein added that Brazilian ethanol will also be in high demand in other parts of the world, especially Europe. Ethanol is a key part of the strategy for increasing octane and meeting renewable fuel targets worldwide. Yet the report forecasts wide fluctuations in Brazilian ethanol exports and estimates that the county won’t meet its peak levels of 2008 until 2019.
The study examines public policies, market developments, economics as well as addresses numerous factors affecting the ethanol industry, including a forecast for crude oil, gasoline, ethanol feedstocks and ethanol production, supply, demand, and Renewable Identification Numbers (RINs). The Outlook contends renewable fuel mandates in the U.S. will also create opportunities for increased production of corn-based ethanol and biodiesel.
Maelle Soares Pinto, director of Hart Energy’s Global Biofuels Center concluded, “The good news is the U.S. ethanol industry has been able to move forward despite the ‘blend wall’ and open new export markets around the world. The constraints we are seeing with Brazilian ethanol could open up opportunities for the U.S. ethanol industry, and this will be a key subject of study for us this year.”
Hart Energy will host a webinar on the study findings on Tuesday, May 15, 2012. More information on these findings and methodology is available by visiting the Global Biofuels Center.