World Grain - April 2022 - 39

ing food shortages and insecurity because of the war in
Ukraine, such as the Middle East and North Africa.
Increasing the blend rate for ethanol could help reduce
the price at the pump, Zuckerberg said, given that the price
of non-blended gasoline is much higher than the cost of
fuel ethanol. Gasoline including 15% ethanol (E15) is approved
for use in vehicles model year 2001 and newer, but
there are barriers to year-round sales of the fuel. The RFA
is working with legislators on a bill that would broaden
use of E15.
" RFA makes a strong business case for higher ethanol
blends to help reduce gas prices at the pump, " Zuckerberg
said. " Moving to E15 would be a win-win for both consumers
and the environment, with a greater reduction in
tailpipe emissions and lower motor vehicle fuel costs.
E-15 is a no-brainer. "
Brazil ethanol production
Unlike the United States, Brazil's ethanol industry is still
struggling with the impacts of COVID-19 and a tight
crop due to continuing drought and severe frost. Most of
Brazil's ethanol is produced from sugar cane, but the cornbased
industry is growing significantly.
Total ethanol production in 2021 was estimated at 30.43
billion liters, a decrease of 13% from 2020, according to a
report from the Foreign Agricultural Service (FAS) of the
US Department of Agriculture. Ethanol from sugar cane
was estimated at 27 billion liters with sugar-ethanol producers
favoring sugar production due to pricing and the
severely damaged sugar cane crop.
Corn ethanol production for 2021 was estimated at 3.9
billion liters, a 40% increase from 2020, the FAS said.
Production is expected to reach 8 billion liters by 2028.
So far in 2022, corn ethanol production is continuing
to grow with UNICA, the Brazilian sugar cane industry
association, reporting that production in February was up
nearly 39% compared with last year.
The potential for expansion of Brazil's corn ethanol industry
is limited by local fuel demand, profitability and
logistical challenges, the FAS said. Most corn ethanol is
produced in Brazil's Center-West region, close to cheap
corn supplies and poultry operations that use distillers
grains. Most of the ethanol is consumed in the region or
distributed to buyers in 10 states in western and northern
Brazil.
" One major limitation for growth of the corn ethanol
sector is the low population density of the region, which
corresponds to little fuel demand in general, " the FAS
said. " Moreover, the options to transport ethanol out of
the region are limited, with most ethanol needing to travel
1,000 kilometers or more by truck before potentially being
placed on barges or larger ocean-going vessels. "
Producers are exploring options to sell to the population
centers in the northeastern region, which frequently lack
World-Grain.com / World Grain / April 2022
39
ethanol to meet local demand. States in southern Brazil
are another target market for corn ethanol producers.
Biodiesel concerns
For biodiesel, the EU leads the way in production with
over 30% of the market share of fuel produced in 2021.
The United States is second in global production with a
20% market share.
Biodiesel presents its own concerns, particularly when
it comes to feedstock availability. Ukraine exports about
80% of the world's sunflower oil, and overall is the largest
exporter of vegetable oils. If there are supply issues as
the war continues, everyone will be scrambling to source
enough feedstocks for food and fuel.
Supplies were already tight and prices high prior to
Russia's invasion of Ukraine, Nicholson said.
" All those importers of sunflower oil from that area of
the world have had to come look at other places in the
world for vegetable oil, which was already tight before we
got here, " he said.
It's unclear what the planting season for sunflower seeds
will look like in Russia and Ukraine, Zuckerberg said.
" Clearly there is production and export risk given the
ongoing closures of Ukraine ports and sanctions placed
against Russia, not to mention the fact that many Ukraine
farmers are on the battlefield rather than the farm field, "
he said.
Biodiesel
plants already have been idling capacity,
Nicholson said, noting that volumes on annual basis
peaked in 2018 and have been coming down ever since.
In 2020, capacity in the United States was at 2.5 billion
gallons but only 1.82 billion gallons were produced.
Capacity in 2021 dropped to 2.2 billion gallons, according
to the US Energy Information Administration.
DDGS is an
ethanol byproduct
that
is used in the
feed industry.
©sMicheal Hendricks - istock.com
http://www.World-Grain.com
World Grain - April 2022

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