News Energy
Bioethanol production will not be restored until 2023
Bioethanol production in the US has plummeted by 13% in the past year. That will cost the industry $4 billion in lost sales. The decrease was caused by the corona crisis, which meant that there was much less demand for fuel. The American research institute FAPRI expects the market to fully recover in 2023 and to grow further after that.
The demand for ethanol is growing faster than that for fuels, according to FAPRI. In many parts of the world, including the EU, fuel producers are required to add 10% biofuel to fossil fuels (think of B10 diesel or E10 petrol). FAPRI assumes that the blending percentages will be further increased, so that the worldwide demand for bioethanol will increase more quickly.
The Netherlands focuses on residual flows
Investments in biofuels are also being made in the Netherlands. For example, the Finnish biofuel producer Neste announced yesterday (Monday 15 March) that it was building a new factory in Rotterdam. In this factory, mainly residual flows such as used frying fat, animal fat from the food industry and vegetable oil residues will be processed into biofuel.
Ethanol production plays an important role in American agriculture. About 35% of the maize is used for the production of biofuels. Corn is one of the largest crops in the US. The lagging production of ethanol has not had a negative effect on the agricultural sector in the US in 2020. Raw material prices have risen sharply in the past six months.
US farm income is estimated at $112 billion by the University of Missouri. That is well above the 10-year average. The solvency ratio is therefore increasing for the first time since 2012. The improved financial position of farms is also reflected in land prices. They are expected to rise by 5% this year.
Jurphaas Lugtenburg
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