Report: Ethanol demand to outpace production

Ethanol Producer Magazine
October 2010
By Kris Bevill
Posted Oct. 1, 2010

A recent analysis of global biofuels in the next decade predicts a shortage in ethanol supply beginning in 2015 due to increased demand for biofuels to meet regulatory requirements. Hart Energy Consulting’s study of global biofuels concluded that worldwide demand for biofuels will increase by more than 100 percent over current demand levels by 2020. As a result, by 2020 global ethanol supply may be short by 5 billion gallons.

“We view this as good news for the industry,” said Tammy Klein, global study leader and assistant vice president of Hart Energy Consulting. “We are projecting increasing demand for the product in the market and high utilization rates. However, we don’t expect a rush of new facilities or additional build-out in the industry. Rather, we think it’s more likely the producers will debottleneck, possibly expand facilities and run over nameplate capacity. We expect facilities will improve efficiency and this is meaningful for future potential low carbon fuel standard (LCFS) and renewable fuel standard (RFS) compliance. This is the challenge for producers - to make their process more ‘sustainable’ and ‘GHG [greenhouse gas] friendly’ - and we think they will rise to that challenge.”

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