Saturated domestic market prompts record ethanol exports

US ethanol exports during the first four months of 2010 have already surpassed the amount exported during the whole of 2009.

That is according to the industry trade body, which said new USDA figures showed that 40.8 million gallons of ethanol were exported in April 2010.

In just a third of the year, the US exported 124.3 million gallons – more ethanol than all 12 months of 2009 put together, when 113 million gallons were exported.

Exports are on track to make 2010 a record year, the Renewable Fuels Association suggested.

It explained that the high level of exports were partly caused by US ethanol producers being “forced” into selling more fuel abroad because American markets are now “saturated” with a legal limit in place banning more than 10% of ethanol in regular transport fuel blends.

The RFA, whose members represent 90% of US ethanol production, said exports to Europe, India, Jamaica, Australia and Canada were either stable or up in April, but exports to Brazil dropped to “virtually zero”.

The recovery of Brazil’s own ethanol output was the cause between the cut in exports to the South American country, the RFA said.
Saturated

Meanwhile, the domestic market for US ethanol remains “saturated”, according to the RFA, with the US Environmental Protection Agency yet to announce a decision to lift the current cap on including ethanol in transport fuel.

The ethanol industry is hoping that the EPA will lift the ethanol blend limitation from 10% up to 15%, perhaps with an intermediate 12% step.

RFA Vice President of Research Geoff Cooper said: “American ethanol producers continue to be forced to look for overseas markets for their product as domestic markets for ethanol remain saturated due to the regulatory cap on blending levels.”

Mr Cooper said the low cost of US ethanol reflected the industry’s improving efficiencies.

He added: “It also underscores the domestic opportunities lost due to the arbitrary cap on ethanol blending. As a matter of national energy security, America should first seek to maximize its use of domestic renewable fuels before it turns to overseas markets.”

source: brighterenergy.org