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Increasing Global Biofuel Demand Presents Domestic Opportunities

  • Monday, 23 October 2017 14:49

US Ethanol and DDGS exports are set to increase as more countries institute policies to promote the use of ethanol in transportation fuel, a new report from the USDA said.

 Late last week, the USDA’s Economic Research Service released its Global Ethanol Mandates report, which said that the US, Brazil, the European Union and 26 other countries have ethanol blending requirements or targets. It said global ethanol production has grown 400 percent to 27 billion gallons in 2016 from 5 billion gallons in 2001. The US is currently the world’s largest ethanol producer.  

As worldwide demand for ethanol grows, the study noted, there will be a larger export market for US ethanol producers as domestic production in countries such as India and China are not currently sufficient to meet their respective blending targets.

In 2015, US ethanol was exported to over 50 coun­tries. In 2016, 15 percent of all US ethanol exports went to countries that do not have biofuel policies such as Nigeria, Oman, Singapore, South Korea, Tunisia and the United Arab Emirates.

By 2021, the report said, the eight largest ethanol-producing countries (minus the United States) would need net imports of over 6.9 billion gallons of ethanol to meet their respective ethanol blending targets and there is a strong possibility to source these gallons from the United States.

With increased ethanol production also comes increased DDGS production. The US currently supplies 85 percent of the world’s DDGS, which is used as an animal feed. US DDGS production grew from 10 million metric tons in 2005 to 38 million in 2016.

US DDGS exports went to 50 countries in 2015 and more than 70 countries over the last 10 years.