Market Evaluation: Fuel Ethanol

Piacente, Erik
Borges da Cunha, Kamyla
Dolzan, Paulo B.
Walter, Arnaldo
Rosillo-Calle, Frank

2007

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In recent years it has been observed a rapid growth on fuel ethanol consumption. Many countries have recently set mandates for biofuels but so far the consumption of fuel ethanol has been concentrate in Brazil and USA. Trade of fuel ethanol is estimated as equivalent to about 10% of the world consumption in 2005 and Brazil is by far the main exporter. The most important potential markets of consumer – USA and EU – have trade regimes that constrained the comparative advantages of some producer countries. This paper aims at evaluating the development of fuel ethanol market as automotive fuel up to 2030 and the potential for international biotrade. Based both on forecasts of gasoline consumption (estimated with a simple model) and on targets/mandates of fuel ethanol use it is estimated that the fuel ethanol demand can reach 272 Gl in 2030 (from 33 Gl in 2005), displacing 10% of the estimated demand of gasoline at that year. The analysis was developed explicitly considering fuel ethanol consumption and production in USA, EU 25, Japan, China, Brazil and in the rest of the world (ROW-BR). Then, an exploratory exercise was developed in order to evaluate the potential international trade in 2030. In case of extreme protective policies to preserve the interests of farmers in USA and EU, imported volumes by USA, EU, Japan and China would reach 24 Gl, less than 20% of the estimated consumption of fuel ethanol in these countries/regions. In case USA and EU set quotas equivalent to 30% of their estimated consumption of ethanol, imports would be increased to 45.9 Gl (38% of the estimated consumption). It is estimated that Brazil alone could supply this demand by 2030, but other countries in the world – mostly developing countries – have potential to be large-scale producers and exporters of fuel ethanol during the following 25 years. [Abstract]

Bioetanol; Mercados de energía;