FAPRI report assumes VEETC isn’t renewed, ethanol production dips

Ethanol Producer Magazine
By Holly Jessen March 09, 2011

A report presented to legislators March 7 assumed that the blender’s credit would expire at the end of 2011, resulting in a decrease in ethanol production. In previous years the annual Missouri Food and Agricultural Policy Research Institute (MU FAPRI) report has assumed the tax credit would be extended, however, the assumption was changed this year to match what was assumed by the Congressional Budget Office.

With the expiration of the tax credit FAPRI’s baseline projects ethanol production to go from 13.6 million gallons in the 2010-’11 marketing year (measured from September to August) to 12.9 million gallons in 2011-’12. Production then climbs back up to 13.5 million gallons the next year, after which it continues to increase slowly to 18.4 million gallons in 2020-’21. The growth is modest compared to rapid growth in recent years and will likely mean the U.S. won’t be able to rely totally on domestic production of the renewable fuel. “Imports of sugar-based ethanol rise to satisfy most of the RFS2 for advanced biofuels not met by cellulosic biofuels or biodiesel,” the report projected.

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