Brazil, China drive ethanol export growth
U.S. ethanol exports in 2016 rose to the second highest levels on record, according to a note released by the EIA today. The U.S. exported more than 1 billion gallons of ethanol last year, an increase of 26% above levels seen in 2015.
Ethanol is typically used as a blending component in gasoline, typically making up less than 10% by volume. Many countries have set ethanol mandates requiring gasoline to contain certain proportions of ethanol, either as an environmental measure or to increase the octane level of the fuel.
Brazil was the primary destination of U.S. fuel ethanol exports, receiving 267 million gallons of ethanol in 2016. Brazil has no tariff for ethanol and mandates a high amount of the fuel in its gasoline, making it a very attractive destination for ethanol exports.
Ethanol exports to China have grown significantly in recent years, from only 3 million gallons in 2014 to 179 million gallons in 2016. Chinese ethanol blending requirements have made it a prime destination for ethanol exports. In addition, in 2016 China temporarily reduced its ethanol tariff from 30% to 5%, further enhancing it as an ethanol destination. This tariff rose back to 30% at the start of 2017, meaning that future ethanol exports to China may not reach this peak level again.
U.S. imports of ethanol are much smaller than exports, at 36 million gallons in 2016. This is almost exclusively sugarcane ethanol from Brazil to California. This is because Californian regulations consider sugarcane ethanol to have much lower carbon content than corn ethanol.
Largest corn harvest on record sends U.S. 2016 ethanol production to highest level on record
U.S. ethanol production in 2016 was the highest ever at 15 billion gallons, about 1 million barrels per day. This is in large part because 2016 saw the largest corn harvest on record in the U.S., up 11 % from last year.
