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EIA: US ethanol imports from Brazil down in 2013; US net exporter for the year

5 May 2014

US imports of sugarcane ethanol from Brazil fell by 40% last year to 242 million gallons, according to the US Energy Information Administration (EIA). Because Brazil is the largest source of ethanol imports into the United States, this drop led the United States to be a net exporter of the product for the year. Export volumes of corn-based ethanol to Brazil declined, but were more than offset by higher export volumes to Canada and a number of other countries.

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Although the net level has varied from month to month, since 2011 the United States has both imported ethanol from and exported ethanol to Brazil. Source: EIA. Click to enlarge.

The United States and Brazil are the two largest producers and exporters of ethanol in the world, with ethanol being produced from corn feedstocks in the United States and sugarcane in Brazil. Starting in 2010, growing corn harvests and limited growth in the domestic ethanol market led the United States to become a net exporter of ethanol and the world’s leading supplier. At the same time, decreased sugarcane harvests in Brazil led to significant reductions in Brazilian ethanol output and a reversal in traditional ethanol trade patterns, as US volumes began entering Brazil to meet domestic demand.

Brazilian ethanol production recovered in 2012. This reduced Brazil’s need for US ethanol imports, while Brazil exported significant volumes to the United States, largely due to growing US Renewable Fuel Standard (RFS) targets.

In addition to the RFS, the California Low Carbon Fuel Standard (LCFS) creates an incentive to import sugar-based ethanol from Brazil because of its lower carbon intensity, seen in imports of ethanol into the West Coast from Brazil.

In the fourth quarter of 2013, Brazil had a record sugarcane harvest and increased ethanol production. However, US imports of ethanol from Brazil fell by 95% compared with the fourth quarter of 2012, when drought in the United States pushed domestic production to record low levels. Another major driver was the U.S. Environmental Protection Agency’s (EPA) announcement of proposed reductions to 2014 RFS, as well as growing volumes of biomass-based diesel imports.

In 2013, the United States imported 306 million gallons and exported 622 million gallons of ethanol, the latter of which was the third highest annual total on record. The United States remained the world’s largest supplier of fuel ethanol, despite high corn prices and increased domestic demand.

Canada received more than half of all US ethanol exports, with its total reaching 325 million gallons last year. US exports to Brazil fell to 33 million gallons, as increasing volumes of Brazilian ethanol were available for domestic consumption.

According to the EIA, the trend in 2014 is for the United States to remain a strong net exporter of ethanol, with the potential for substantially larger levels of exports, given the recent abundant corn crop and EPA’s proposed reduction in domestic RFS targets. US ethanol import volumes in 2014 will likely be contingent on a combination of Brazilian sugarcane yields, final advanced biofuels RFS targets, and imported volumes of competing advanced biofuels, such as renewable diesel.

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Comments

(LCFS) creates an incentive to import sugar-based ethanol from Brazil...hmm

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