US tops as number one fuel ethanol producer, consumer and exporter
The United States (US) is the world leader in the production, consumption, and export of fuel ethanol. The 15.8 billion (US) gallons (≈ 59.8 billion litres) of ethanol produced in 2019 represent 54 percent of global output. In comparison, Brazil accounted for only 30 percent of global production, despite significant growth over the last two years according to statistics recently released by the Renewable Fuels Association (RFA).
According to the Renewable Fuels Association (RFA), American ethanol exports declined modestly in 2019 to an estimated 1.5 billion gallons (≈ 5.67 billion litres), second only to the record 1.7 billion gallons (≈ 6.43 billion litres) shipped in 2018 and representing approximately 10 percent of the ethanol produced in the United States.
For the fifth straight year, Brazil and Canada remained the top two destinations for US ethanol, taking nearly half of the nation’s exports. Shipments to Canada have been fairly stable in recent years.
However, exports to Brazil fell in 2019 as a result of sizable inventories early in the year, higher ethanol production, the continued implementation of a tariff-rate quota, and the restriction of quota volumes during the September-February period. The decline in shipments to Brazil was the main factor causing overall US exports to recede in 2019.
Prohibitive tariffs imposed by China in connection with the trade conflict with the United States caused shipments to fall to negligible levels for most of 2019. On the other hand, longstanding antidumping duties by the European Union (EU), which the US industry had actively worked to overturn, were allowed to end.
Exports to a large majority of the top-ten destinations for American ethanol were higher in 2019. There were notable increases in shipments to India, the third-largest market, as well as to Colombia and South Korea.
Almost a doubling of imports
Ethanol imports to the US more than doubled from the nearly 80 million gallons (≈ 302.8 million litres) received in 2018. Brazilian sugarcane-based ethanol benefitted from the high prices of credits toward the California Low Carbon Fuel Standard (CLCFS) and from widening price spreads among categories of Renewable Fuel Standard (RFS credits (Renewable Identification Numbers – RINs) that resulted from small refinery exemptions (SRE) issued by the Environmental Protection Agency (EPA).
Multiple opportunities exist to regain momentum in export growth. A resolution of the trade conflict with China could reopen a large-scale market. Canadian provinces are moving to higher blends. Average blend rates are increasing in India, and there is potential for barriers to the use of US ethanol to be lowered.
Considerable market development efforts have been conducted by the US industry in Mexico. Finally, Brazil is likely to remain a top destination, and the US industry remains engaged to ensure that it receives fair treatment as the RenovaBio program is implemented in 2020.
Growing markets for distillers grains
US biorefineries satisfied growing domestic animal food needs while also exporting at least one of every four tons of distillers grains produced. According to the RFA, broadened educational and B2B outreach helped to grow the US bio-product customer base into the most diverse mix in the industry’s history.
In 2019, 53 countries purchased a cumulative 10.8 million tonnes of US distillers grains. Half of these exports landed in Southeast and East Asia, despite China’s decision in June to maintain anti-dumping and anti-subsidy tariffs on US distillers grains imports. Another quarter of sales were transborder shipments, with Mexico extending its position as the top distillers grains customer for a third consecutive year.
The RFA anticipates that mounting demand and geographic diversity lie ahead as countries around the globe embrace the use of these safe and economical ethanol bio-products.