01 April 2012 19:29 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--The US and Brazil will swap ethanol shipments in 2012 to meet a US renewable fuels mandate, a market participant said on Sunday.
The US will need to import ethanol from Brazil, the source said, because of a Renewable Fuels Standard (RFS) rule that requires the US to use 2bn gal of advanced biofuels this year. The source spoke on the sidelines of the International Petrochemical Conference (IPC).
The US produces large amounts of corn-based ethanol, but it does not meet the RFS standards for an advanced biofuels.
An advanced biofuel is a renewable fuel other than ethanol made from corn that achieves a 50% greenhouse gas (GHG) emissions reduction requirement when compared with gasoline.
Brazilian sugarcane ethanol qualifies as an advanced biofuel and could be used to meet that mandate.
However, Brazil’s sugarcane harvest is expected to be flat in 2012, which will make it difficult for the country to ship excess material to the US, hence a potential swap between the two countries.
In fact, Brazil is expected to import corn-based ethanol from the US in 2012 to meet growing demand for motor fuel at home, market participants have predicted.
The US is awash with corn-based ethanol while Brazil is likely to have another weak crop, the source at the IPC event said, referring to a drop in Brazil’s sugarcane production last year because mainly of extremely dry weather in the country’s key centre-south region.
The centre-south, which accounts for 90% of Brazil’s ethanol output, produced 492.23m tonnes of sugarcane in 2011, an 11.6% drop from 556.94m tonnes in the previous year, according to data from Brazilian sugarcane industry association Unica.
The likely outcome for 2012, the source said, is that the US will ship corn-based ethanol to Brazil, while Brazil will send ships loaded with sugarcane-based ethanol to the US.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections