Europe fuel ethanol prices fall after issues over quality

24 November 2010 17:40  [Source: ICIS news]

LONDON (ICIS)--European fuel ethanol prices have fallen as the quality of product being offered did not meet the industry standard outlined by renewable energy directives, market participants said on Wednesday.

Demand would continue to fall if issues over quality continued, sources said.

Prices were assessed at €580-630/cbm ($773-840/cbm) FOB (free on board), compared with €600-630/cbm in the previous week.

Fuel ethanol volumes had been found to contain relatively high traces of gasoline since August and this had resulted in lower demand, market sources said.

European renewable energy directives are aimed at reducing emissions by imposing the use of renewables in fuels.

It was believed that fuel ethanol volumes had been tainted when passing through pipelines or being distributed in trucks and that the situation was not caused intentionally, sources said.

While traces of gasoline in volumes made no technical difference to the product and were not illegal, it was not suitable for some end-users or buyers needing to comply with renewable energy directives, sources said.

One trader said it had customers which were sensitive about quality, and that it would not buy material during open market trading as the material contained gasoline and it would be unable to sell the product on.

$1 = €0.75

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By: Sarah Trinder
+44 20 8652 3214

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