27 March 2012 15:20 [Source: ICIS news]
SAO PAULO (ICIS)--Global ethanol production will grow slightly in 2012 to 102.17m cubic meters, a 2% increase from 100.19m cubic meters in 2011, commodity information service FO Licht said on Tuesday.
The outlook for the sector has improved in economic terms, but the biofuel will continue to struggle with political uncertainties, said FO Licht managing director Christoph Berg during a presentation in Sao Paulo, Brazil.
Political support for biofuels is no longer guaranteed, he said, citing increased regulation in Brazil and possible changes to US renewable fuels mandates.
He also cited the continuing debate in Europe surrounding the potential impact from indirect land use change (ILUC) caused by increased biofuels use.
This is a “Pandora’s box”, Berg told delegates, referring to ILUC.
Despite the political uncertainties, higher gasoline prices and less volatility in commodity markets, which he said helps to keep production costs down, were both economically positive for ethanol.
Berg spoke at the opening of FO Licht’s eighth annual Sugar and Ethanol Brazil conference.
The two-day event began on Tuesday. The conference was organised in partnership with IBC Brasil.
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