Bad weather, crop failures, regulatory confusion, economy fears put the price squeeze on biofuels

Biofuels Digest
Joelle Brink
June 29, 2012

Any way you look at it, this hasn’t been a good year for biofuel feedstocks. In the US rising crop costs have squeezed both farmers’ and producers’ margins, while in Brazil high sugar prices have made ethanol uncompetitive with subsidized gasoline, Europe is awash in biodiesel amid shrinking production and low demand, and in the US demand for all road fuel is rapidly declining with spot ethanol mainly negative, forcing Valero and some other ethanol producers to idle production.

Is this the end of the biofuels world? Not just yet according to energy columnist Gerard Wynn, but in the short run we may be in for 1996-style output and price stagnation.

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