In the News
Mar 2, 2023
WASHINGTON - U.S. Senator Amy Klobuchar, a senior member of the Senate Agriculture Committee, released the following statement in response to the Environmental Protection Agency’s proposed E15 rule.
“Giving certain states, including Minnesota, the flexibility to use E15 in the summer starting in 2024 is a good first step, but we need action now. In order to boost our economy and decrease prices at the pump, we should be giving consumers access to E15 nationwide this summer to prevent a disruption in sales. This is why I joined Senators from both sides of the aisle to call on the Administration to remove barriers to E15 starting in summer 2023, and I’ll keep pushing to pass bipartisan legislation that I introduced to make E15 available year-round for all Americans.”
Klobuchar has long been a strong advocate for investing in renewable fuel infrastructure, increasing American biodiesel production, and upholding the Clean Air Act’s Renewable Fuel Standard (RFS).
She leads bipartisan legislation with Senator Deb Fischer (R-NE) to make E15 available year-round. TheConsumer and Fuel Retailer Choice Actwould enable the year-round, nationwide sale of ethanol blends higher than 10 percent, helping to lower fuel prices and provide certainty in fuel markets for farmers and consumers.
Read the original press release here.
Feb 27, 2023
Adding low-cost ethanol to the nation’s gasoline supply improves energy security and saves the average American household more than $750 per year, according to a new study conducted by energy economists from the University of California-Berkeley and leading universities in Brazil and the Czech Republic.
The analysis concluded that “adding ethanol to gasoline decreases the price paid by U.S. drivers at the pump. We estimate the average discount per gallon to be $0.77 between 2019 to 2022 and averaged across our models. …this would add up to total savings of $95.1 billion per year for U.S. consumers.”
Spread across 124 million U.S. households, this equates to an average annual savings of $767 per household. Adding ethanol to gasoline reduces demand for petroleum, which in turn puts downward pressure on prices for crude oil and refined products. In addition, ethanol is typically priced below other octane boosters and gasoline blendstocks at wholesale terminals where fuels are blended. The combination of ethanol’s lower cost and its ability to pressure oil prices by extending fuel supplies results in large savings for consumers. The authors of the new study attribute much of this benefit to the Renewable Fuel Standard.
“The accessibility of renewable fuels limits the bargaining power of the largest oil producers and brings about a higher degree of fuel security to the U.S.,” the study’s authors concluded. “We estimate that blending roughly 330 million barrels of ethanol into U.S. gasoline lowers global crude oil prices as well as retail gasoline prices. The main conclusion is that the RFS program has lowered the prices of gasoline at the pump at a statistically significant level.”
Renewable Fuels Association President and CEO Geoff Cooper said the study’s results come at a critical time for U.S. policymakers. “American consumers would be paying much higher prices at the pump if not for the inclusion of more than 14 billion gallons of low-cost, low-carbon ethanol in our nation’s gasoline supply each year,” Cooper said. “This new study confirms that adding ethanol to gasoline is a proven solution for significantly reducing gas prices and providing economic relief to American families. As war in Eastern Europe continues to wreak havoc on global energy markets, and as abnormally high inflation rates continue to bedevil the U.S. economy, the Biden administration and Congress should take note of this study’s findings. And they should act immediately to allow increased use of higher ethanol blends, like E15 and E85, year-round and nationwide.”
The new study, which was commissioned by the Renewable Fuels Association, is available here.
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Mar 2, 2023
A new analysis from a renowned carbon accounting firm finds that the greenhouse gas emissions reductions achieved under the Renewable Fuel Standard far exceed the GHG savings originally projected by EPA. In the 15 years since the RFS was expanded, the use of biofuels under the program has resulted in cumulative savings of more than 1.2 billion metric tons of carbon dioxide-equivalent GHG emissions, with corn ethanol providing the largest share of GHG reductions.
“The RFS2 has resulted in significant GHG reductions, with cumulative CO2 savings of 1,212 million metric tonnes over the period of implementation to date,” according to the study, which was conducted by Life Cycle Associates. “The GHG reductions are due to the greater than expected savings from ethanol and other biofuels, including continuous technology investments reducing the carbon intensity (CI) for corn ethanol.”
In more recent years, increased use of renewable natural gas and renewable diesel has also led to significant GHG reductions. Notably, the study found, “these emissions savings occur even though cellulosic biofuels have not met the RFS2 production targets.”
“This report demonstrates that the RFS has been remarkably successful in driving down carbon emissions from the transportation sector,” said RFA President and CEO Geoff Cooper. “In fact, the RFS is the only federal program on the books today that requires the use of lower-carbon fuels in our vehicles. And we’re just getting started. Our producer members have unanimously committed to achieve net-zero carbon emissions by 2050 or sooner, and this report shows we are well on our way toward that goal thanks to new technology and efficiency improvements both on the farm and at the biorefinery.”
The new report is an update to previously published studies in 2021 and 2019. It was conducted for the Renewable Fuels Association by Stefan Unnasch, Debasish Parida and Brian Healy of Life Cycle Associates.
Read more here
Feb 28, 2023
The ethanol industry’s contribution to the U.S. economy increased in 2022 as production volumes continued to recover from COVID pandemic levels and producers received higher prices for ethanol and co-products like distiller grains and corn oil, according to an analysis conducted for the Renewable Fuels Association by ABF Economics.
In 2022, more than 78,800 U.S. jobs were directly associated with the ethanol industry, with an additional 342,800 indirect and induced jobs supported across all sectors of the economy. The industry created $34.8 billion in household income and contributed just over $57 billion to the nation’s gross domestic product—the second-highest GDP contribution ever. The jobs, GDP, and household income values exhibited significant increases from 2021 levels.
“The U.S. ethanol industry continues to make a vital contribution to the nation’s economic well-being,” said RFA President and CEO Geoff Cooper. “Last year, as our country battled historic inflation and economic uncertainty, the industry supported more than 400,000 good-paying jobs and spurred reinvestment in rural communities across the country. And as gas prices hit record highs in 2022, ethanol producers increased their output of lower-cost, lower-carbon renewable fuel to help deliver economic relief to consumers around the world.”
The 2022 report also shows that the industry spent nearly $47 billion on raw materials, other inputs, and goods and services to produce ethanol last year, with corn purchases alone accounting for more than $38 billion. The report also provides a breakdown of economic impacts and jobs supported by the ethanol industry in major ethanol-producing states in 2022.
“The ethanol industry continued to make a significant contribution to the economy in terms of GDP, job creation, generation of tax revenue, and displacement of crude oil and petroleum products in 2022,” the report concluded. “The importance of the ethanol industry to agriculture and rural economies is particularly notable. Growth and expansion of the ethanol industry as it applies new technologies and addresses new markets will enhance the industry’s position as the original creator of green jobs and will enable America to make further strides toward reducing greenhouse gas emissions and positively dealing with climate change.”
Read the full report here.
Feb 23, 2023
U.S. fuel ethanol production was up nearly 2 percent the week ending Feb. 17, according to data released by the U.S. Energy Information Administration on Feb. 23. Weekly ending stocks of fuel ethanol expanded by 1 percent.
Fuel ethanol production averaged 1.029 million barrels per day the week ending Feb. 17, up 15,000 barrels per day when compared to the 1.014 million barrels per day of production reported for the previous week. When compared to the same week of last year, production for the week ending Feb. 17 was up 5,000 barrels per day.
Weekly ending stock of fuel ethanol reached 25.588 million barrels the week ending Feb. 17, up 249,000 barrels when compared to the 25.339 million barrels of stocks reported for the previous week. When compared to the same week of last year, stocks for the week ending Feb. 17 were up 81,000 barrels.
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Feb 21, 2023
The USDA’s Economic Research Service on Feb. 7 published a report discussing its analysis of U.S. Energy Information Administration data and predicting possible domestic and global demand for ethanol through 2030.
EIA’s various outlook scenarios through 2030 predict that U.S. gasoline consumption could decrease by as much as 3.3 percent or increase by as much as 5.3 percent over the next decade when compared to 2021 levels. For E85, the EIA predicts U.S. consumption will grow between 1.4 percent and 10.4 percent between 2021 and 2030, depending on U.S. economic growth over the decade. “The projected increase in ethanol consumption across all scenarios—despite falling gasoline consumption in some scenarios—is due in part to EIA’s assumption that the Renewable Fuel Standard will increase total U.S. consumption of renewable fuels,” said the ERS researchers in the report.
Globally, the USDA report specifically looks a historical blends (HB) scenario and a targeted blends (TB) scenario. Under the HB scenario, fuel ethanol consumption is expected to increase by 5.7 percent between 2018 and 2030, driven primarily by increased demand in India, Brazil and China. Between 2021 and 2030, ethanol consumption is expected to increase by 7.4 percent, due primarily to increased demand in Canada, China and Brazil. Under the TB scenario, international fuel ethanol consumption could increase by 180 percent between 2018 and 2030, due primarily to increased demand in Canada, China and Brazil. Between 2021 and 2030, ethanol consumption could increase by 173 percent, also primarily due to increased demand in Canada, China and Brazil.
A full copy of the USDA report is available on the ERS website.
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Feb 20, 2023
The U.S. Government Accountability Office on Feb. 9 issued a determination that states the U.S. EPA’s June 2022 denial of 69 small refinery exemptions (SREs) under the Renewable Fuel Standard is not a rule, and therefore is not subject to the requirements of the Congressional Review Act.
Sens. Bill Hagerty, R-Tenn.; Shelly Moore Capito, R-W.V.; and Roger Wicker, R-Miss., in June 2022 sent a letter to U.S. Comptroller General Gene Dodaro asking him to review whether the EPA’s June 3, 2022, denial of 69 SREs constitutes a rule for the purposes of the CRA. The CRA, signed into law in 1996, requires the GAO to report on major rules that federal agencies make. Federal agencies promulgating rules must submit a copy to both houses of Congress and the GAO before the rules can take effect. The CRA also empowers Congress to overturn rules issued by federal agencies via passage of a joint resolution.
The GAO on Feb. 9 announced it had completed the requested review and issued its decision, concluding that the June 2022 denial qualifies as an order—not a rule—under the CRA because its purpose was to provide the final disposition of particular SRE petitions.
A fully copy of the GAO decision is available on the agency’s website.
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Feb 7, 2023
December U.S. ethanol exports slipped 9% to a 17-month low of 74.2 million gallons (mg), or 41% less than the volume shipped a year ago. Essentially all U.S. ethanol exports landed in just eight countries, with Canada securing an unprecedented 66% of total exports. December marks Canada’s 21st month as our largest customer with 48.8 mg (up 2% from Nov.) moving across the border, the bulk of which was denatured ethanol. U.S. ethanol exports quadrupled to the Philippines (to 8.8 mg, an 11-month high) and doubled to Jamaica (to 4.1 mg, nearly a 3-year high). Mexico (4.0 mg) imported 23% fewer gallons while South Korea (3.9 mg) cut imports in half. Vietnam, which imported U.S. ethanol for essentially the first time since July 2020, purchased a record 2.4 mg. Some significant markets for U.S. ethanol were noticeably absent in December, including the European Union, Brazil, and India. Total U.S. exports for the year were 1.35 billion gallons, the fourth highest on record.
The U.S. imported 2.2 mg of undenatured ethanol from Brazil. Total U.S. imports for the year were 79.3 mg, or 36% more than 2021.
U.S. exports of dried distillers grains (DDGS), the animal feed co-product generated by dry-mill ethanol plants, leapt 22% to a three-month high of 887,433 metric tons (mt). While the mix of larger customers varied from recent norms, Mexico remained our top customer for the sixth consecutive month despite an 18% decline to 169,032 mt (equivalent to 19% of December exports). Shipments to South Korea bounced back 35% to 124,216 mt and Colombia imported a record 64,373 mt. Other larger markets included Vietnam (61,964 mt, -9% to a 10-month low), United Kingdom (58,149 mt, up from zero to the largest monthly volume in over 4 years), Canada (57,287 mt, -5%), Indonesia (56,248 mt, +7%), Turkey (48,891 mt, +246%), Japan (46,850 mt, +23%), and the European Union (40,740 mt, +48%)—primarily to Ireland. Notably, imports to China hit an 11-month high (27,985 mt) while Taiwan imported the largest volume in 11 years (27,595 mt). Total U.S. DDGS exports for the year of 11.0 million mt were 4% more than 2021.
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Feb 1, 2023
U.S. fuel ethanol production was up nearly 2 percent the week ending Jan. 27, according to data released by the U.S. Energy Information Administration on Feb. 1. Weekly ending stocks were down nearly 3 percent.
Fuel ethanol production averaged 1.028 million barrels per day the week ending Jan. 27, up 16,000 barrels per day when compared to the 1.012 million barrels of production reported for the previous week. When compared to the same week of last year, production for the week ending Jan. 27 was down 13,000 barrels per day.
Stocks of fuel ethanol fell to 24.442 million barrels the week ending Jan. 27, down 635,000 barrels when compared to the 25.077 million barrels of stocks reported for the previous week. When compared to the same week of last year, stocks for the week ending Jan. 27 were down 1.412 million barrels.
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Feb 1, 2023
Greenfield Global Inc., Canada’s leading alcohol, solvent and biofuels producer, on Jan. 24 welcomed Francis Drouin, Parliamentary Secretary to the Minister of Agriculture and Agri-Food, to Greenfield’s sponsored laboratory space at the University of Alberta to share progress on a $2M agricultural waste-to-clean fuel project funded by Agriculture and Agri-Food Canada under the Agricultural Clean Technology (ACT) Program, Research and Innovation stream.
Greenfield, in close collaboration with the University of Alberta’s Faculty of Engineering, is leading the development of a new clean technology that will convert agricultural waste into renewable diesel fuel. Promoting a circular agriculture economy, this technology has the potential of reducing the overall greenhouse gas emissions in the agricultural and transportation sectors by up to 90 percent when compared to fossil-based diesel fuel.
“Climate change solutions not only help the environment but can also improve the economy and support producers – and projects like this are a great example,” said Francis Drouin, Parliamentary Secretary to the Minister of Agriculture and Agri-Food, on behalf of the Honourable Marie-Claude Bibeau. “This new technology will convert agricultural waste to renewable fuel, add value for producers and boost the energy industry, all while reducing greenhouse gas emissions.”
“Our R&D collaboration with the University of Alberta to produce drop-in, renewable diesel fuel from organic waste will allow farming, trucking, construction, standby generators, and other fossil fuel intensive sectors to decarbonize, which is directly aligned with Canada’s climate action plans and helping Canada achieve net-zero emissions by 2050”, said Howard Field, president and CEO of Greenfield Global. “Greenfield has been decarbonizing Canada’s light-duty vehicle emissions for decades, producing fuel ethanol from industrial corn that is blended into gasoline. We are dedicated to the ongoing development of state-of-the-art technology with our partners in research, agriculture, and industry and we appreciate the Government of Canada’s shared commitment and support for innovative and important climate technologies.”
Additional benefits of Greenfield’s technology include being feedstock agnostic and utilizing a spoke-and-hub approach to the collection of feedstocks, production of biocrude, and the refining of biocrude into renewable diesel.
Three key contributors that supported Greenfield’s funding submission process and helped make this project possible were the Canadian Federation of Agriculture, the Ontario Federation of Agriculture, and the Grain Farmers of Ontario. The collaboration of all parties involved will contribute to the successful commercialization of this technology which will produce a sustainable liquid fuel, improve waste management and reduce greenhouse gas emissions.
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Jan 30, 2023
The attorneys general of Iowa, Illinois, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin are urging the Biden administration to take action on petition filed by a bipartisan coalition of governors in April 2022 seeking a permanent solution to year-round E15 sales within their states.
Iowa Gov. Kim Reynolds, Nebraska Gov. Pete Ricketts; Illinois Gov. JB Pritzker, Kansas Gov. Laura Kelly; Minnesota Gov. Tim Walz, North Dakota Gov. Doug Burgum; South Dakota Gov. Kristi Noem, and Wisconsin Gov. Tony Evers April 28, 2022, sent a letter to U.S. Administrator Michael Regan seeking a solution to year-round E15 sales under a provision of the Clean Air Act that allows the governor of any state to request that the 1-psi volatility waiver contained in the statute for gasoline-ethanol blends be removed in the state.
Under federal law, the EPA is required to respond to such a request within 90 days. The agency, however, has not yet responded to the April 2022 request. In a letter to Regan and Shalanda Young, director of the White House Office of Management and Budget, the attorneys general urge the administration “to comply with the law and issue the mandated regulations so that E15 will be available this summer.”
A rulemaking process related to the governors’ request is in progress. The EPA on Dec. 5, 2022, delivered a notice of proposed rulemaking (NPRM) to the OMB related to the petition. OMB review marks a final step before a proposed rulemaking is released for public comment. The OMB also addressed the petition in its 2022 Fall Unified Agenda and Regulatory Plan, which was released on Jan. 4. That unified agenda indicates the EPA is targeting March 2023 for completion of the E15 rulemaking.
The Renewable Fuels Association is also calling on the EPA to respond to the governors’ petition. “It’s been nine months since a group of eight Midwest governors petitioned the Biden administration to ensure lower-cost, lower-carbon E15 would be available year-round in their states,” said Geoff Cooper, president and CEO of the RFA. “By law, the governors’ petition should have been approved by the administration 90 days after it was received, but that never happened. Now, with the 2023 summer driving season just around the corner, these states are tired of waiting. It’s past time for the White House and EPA to follow through on the governors’ petition, and we applaud these attorneys general for their efforts to break the logjam.”
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Jan 26, 2023
Novozymes released 2022 financial results on Jan. 26, reporting a 25 percent increase in bioenergy sales when compared to 2021. Total sales for the company were up 9 percent in 2022 when compared to the previous year.
Novozymes attributed the growth in bioenergy sales to a 2 percent increase in U.S. ethanol production, expanded corn ethanol production in Latin America, and growth in solutions for biodiesel production. Sales of enzymes used in second-generation biofuels production also contributed to the growth, according to the company.
Bioenergy accounted for 21 percent of total company sales last year. Household care; food, beverages and human health; grain and tech processing; and agricultural, animal health and nutrition accounted for 28 percent, 24 percent, 15 percent, and 12 percent of sales, respectively.
Moving into 2023, Novozymes expects additional growth in bioenergy sales to be driven by pricing, market penetration enabled by innovation, capacity expansion of corn ethanol in Latin America and market penetration with enzymatic solutions for biodiesel production. Growth is also expected to be supported to a degree by sales of solutions for second-generation ethanol production. Growth in bioenergy sales is expected to be in the mid- to high-single-digit rate this year. The mid-point range of this growth forecast assumes flat to slightly declining performance in U.S. ethanol production, according to the company.
A full copy of Novozymes’ 2022 report is available on the company’s website.
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Jan 23, 2023
U.S. ethanol production during the fourth quarter of 2022 nearly caught up to pre-COVID levels despite falling energy prices and lower gasoline demand, according to the latest quarterly report released by CoBank’s Knowledge Exchange.
Production was at 15.5 billion gallons on an annualized basis, down slightly from the five-year average. CoBank called the level of production “reasonable” in the context of ending stocks that were approximately 8.5 percent above the five-year average.
Margins for the fourth quarter averaged 27 cents per gallon, up from 25 cents per gallon for the first nine months of last year. Margins were in line with long-run historical averages of 25 cents to 30 cents per gallon, according to CoBank. The report also notes that profitability was well above average in October and November. Higher corn prices and a 12 percent decline in ethanol fuel prices, however, reduced margins in December.
According to CoBank, the ethanol industry is moving into 2023 with some positive tailwinds, including implementation of the Inflation Reduction Act, continued build-out of renewable diesel production capacity, and a continued push for year-round E15 sales in the Midwest.
A full copy of the quarterly report is available on the CoBank website.
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Jan 18, 2023
By Mackenzie Boubin
Ethanol exports for marketing year (MY) 2021/22 totaled 1.45 billion gallons, marking the third largest MY on record, and 230 million gallons above 2020/21’s numbers. This 1.45 billion gallons is valued at $4 billion, and its production required the use of the equivalent of 515 million bushels of corn.
Ethanol remained a robust and diversified market with U.S. ethanol exported to nearly 80 different countries in 2021/22. Total U.S. ethanol exports for 2021/22 were up in eight of the top 10 markets, with Canada, the European Union, Nigeria, Singapore and the United Kingdom all setting records.
Canada was the largest market for U.S. ethanol in 2021/22 with nearly 470 million gallons exported, a 33 percent increase year-on-year and the highest on record. Canada’s recently released Clean Fuel Regulations formalized policy that provides stable demand for biofuels into 2030 and beyond. As a result, the Canadian government anticipates that the country will achieve a 15 percent national ethanol blend rate by 2030 as an avenue to comply with CFR carbon mitigation requirements, up from its current 8 percent national ethanol blend average.
South Korea surpassed India to become the second-largest market for U.S. ethanol in MY 2021/22, totaling 176 million gallons (consuming 62 million bushels), worth $444 million, up 28 percent from MY 2020/21.
The EU was the third largest market for U.S. ethanol in 2021/22, with exports up 60 percent year-on-year, hitting a new record of 140 million gallons exported. U.S. ethanol exports to the UK reached 84 million gallons, an increase of over 600 percent from 2020/21, landing as the sixth largest market for U.S. ethanol exports in 2021/22. Furthermore, as a result of the continued rollout of its national E10 policy and implementation of Renewable Transport Fuel Obligation (RTFO), the UK reached an eight percent national blend average, up from 4.7 percent in 2021.
Utilizing U.S. ethanol as a measure to reduce inflationary pressures, increase human health and contribute to decarbonization efforts is an idea that is resonating throughout the globe as more countries seek to implement higher biofuel standards and utilize ethanol to the fullest potential. These goals are a critical aspect of the U.S. Grains Council’s mission of developing overseas markets for U.S. product, to the benefit of domestic producers and foreign end-users alike.
The USGC’s ethanol staff, along with its ethanol advisory team, have identified key priority and second tier markets to grow demand as a part of the Council’s target of helping U.S. producers export four billion gallons of ethanol by 2025. With growing markets such as Japan, Indonesia, India and Canada, U.S. ethanol is well positioned to deliver an affordable, sustainable, reliable and consistent product to countries looking to immediately reduce transportation emissions and consumer costs.
With many emerging opportunities across the world, the Council’s ethanol team strives to develop access and support educational and informational campaigns to the various stakeholders within the global fuel supply chain.
Building upon the momentum for MY 2021/22, the Council will continue to assist countries in creating their own clean fuel standard or discretionary blend levels that would incentivize ethanol consumption, and display how U.S. ethanol can easily be implemented within existing world infrastructure as a right here-right now solution to carbon mitigation strategies.
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Jan 17, 2023
By Geoff Cooper
In 2022, the U.S. ethanol industry regained the same sort of momentum that fueled its remarkable growth following passage of the Renewable Fuel Standard 17 years ago. Just look at what we were able to accomplish last year: In December, the Environmental Protection Agency proposed RFS volumes through 2025 that provide certainty and an opportunity for growth. The agency also put an end to abusive small refiner exemptions that had decimated RFS demand for years and established a pathway for ethanol to serve as a “biointermediate” feedstock for new applications like sustainable aviation fuel. At the direction of President Biden, EPA also provided emergency waivers allowing the summertime use of E15, while also committing to make E15 more broadly available to consumers across the country by the summer of 2023. At the same time, USDA finalized rules enabling ethanol producers to access $700 million in COVID relief funding and expanded the HBIIP program, providing resources for gasoline marketers wanting to provide E15 and flex fuels like E85 to consumers.
On Capitol Hill, the Inflation Reduction Act adopted in August heralded new tax incentives for sustainable aviation fuels, established a Clean Fuel Production Credit, enhanced the 45Q carbon capture credit, and appropriated another $500 million for higher ethanol blend infrastructure. Other bills that would establish a growing role for high-octane, low-carbon fuels—including the Next Generation Fuels Act—attracted growing support in both parties and both chambers of Congress. In an important development, we also gained a crucial new ally in our work toward making E15 available year-round, the American Petroleum Institute. With the API’s support, we saw the Consumer and Fuel Retailer Choice Act filed in both the House and Senate with momentum building for a permanent solution.
In the marketplace, ethanol production, demand and exports all continued to rebound from the pandemic malaise. That’s real momentum, and the Renewable Fuels Association will continue to build on the successes of last year while we move our industry to new levels this year.
In 2023, RFA will continue to pursue policy and regulatory solutions that provide parity for E15, allowing year-round accessibility for consumers and to reduce costs at the pump. We still believe that the secret to sustained success in the ethanol industry lies in the ability to reduce carbon emissions and pursing policies promoting and incentivizing low carbon fuels at the pump, such as E15, E20/30 and E85.
As exciting as last year’s successes are, RFA and the ethanol industry are poised for even more success in 2023. As we move forward this year, RFA members will continue living our pledge to achieve net-zero carbon emissions by 2050 and lead efforts here and abroad in expanding market opportunities for ethanol. We look forward to showcasing our annual National Ethanol Conference with well-known industry leaders and presenters at the end of February in Orlando. Our conference topics reflect on the past year and the continued momentum going into 2023 with a very appropriate theme—Ready. Set. Go!
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Jan 5, 2023
In December, the International Energy Agency (IEA) – the leading intergovernmental organization that provides policy recommendations, analysis and data on the global energy sector – released its Renewables 2022 Analysis. The report is available for use by countries looking at cases to accelerate their transition to net zero.
Renewables 2022 includes analysis on the renewable energy sector, including developments and trends for transportation, including increasingly ambitious energy targets in the European Union (EU), growth in ethanol consumption in Brazil, biofuel blending in India and global feedstock availability to meet the rise of sustainable aviation fuel (SAF), many topics on which the U.S. Grains Council (USGC) provided review and comment in the run up to its publication.
“In this most recent IEA report, total global biofuel demand is estimated to increase more than 20 percent between 2020 and 2027, and world ethanol consumption is projected to rise in an accelerated case scenario,” said Isabelle Ausdal, USGC manager of global ethanol policy and economics. “This reinforces the U.S. industry’s recognition of ethanol’s importance as a tool for countries to accelerate their greenhouse gas (GHG) emission reductions and underscores the importance of scaling up technologies such as carbon capture, utilization and storage (CCUS) to reach net zero carbon intensity.”
According to IEA’s report, ethanol consumption in Europe is expected to remain steady at 2021 levels, with the most significant growth in the United Kingdom (U.K.) where consumption is projected to expand by more than 50 percent to meet its Renewable Transport Fuel Obligation (RTFO) and national E10 blending. Recognition was also given to the U.K., Finland and the Netherlands for national E10 blending and the increase in popularity of flex fuel vehicles in France.
While remaining steady in the EU, increased ethanol consumption is forecasted to occur largely in emerging economies aiming to reduce oil imports and boost local economies, while also helping to reduce GHG emissions. IEA projects overall demand for biofuel in Brazil to expand by 40 percent between 2022 and 2027, with ethanol accounting for 70 percent of this change. This is attributed to Brazil’s ethanol mandate, discretionary blending, RenovaBio program and increasing gasoline demand.
Grain-based ethanol production capacity in India is currently not adequate to supplement sugar-based ethanol to meet demand and IEA predicts it will meet only E12 using exclusively domestic production within the next few years. Otherwise, IEA forecasts that India will meet its E20 demand in an accelerated scenario through expanding grain-based ethanol production capacity, allowing imports and addressing vehicle compatibility issues. India estimates grain-based ethanol will provide 46 percent of its supplies by 2025 or 2026.
As demand increases at the country level, global demand for SAF also increases. Due to this boom in aviation demand, IEA expects the world will see a feedstock crunch. Additional pressure will be added as the EU extends limits on the number of eligible supplies. Ethanol was highlighted as a viable feedstock in SAF production to backfill the soaring demand for wastes, oils and fats. The U.S. was identified as the country with the most significant growth potential for SAF production, assuming policies will favor SAF over renewable diesel.
“Policies are the main drivers of biofuel and renewable energy use. With consistent and progressive implementation, IEA’s accelerated scenarios can help countries expedite their progress to meet their 2030 climate targets and beyond,” Ausdal said. “The IEA is a global policy force in the movement toward a net-zero energy future. We greatly value their insights and partnership in contributing to a report so widely respected. The Council looks forward to continued collaboration and the representation of ethanol in the renewable energy future.”
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