The US Department of Agriculture (USDA) recently in its report predicted increased Global Demand for Fuel Ethanol through 2030. The U.S. Department of Energy’s Energy Information Administration (EIA) projections to 2030 indicate that U.S motor gasoline consumption is expected to see changes ranging from a 4.5-billion-gallon decrease (3.3 percent) to a 7.2-billion-gallon increase (5.3 percent) from 2021 levels. These figures correspond to average consumption changes of between -499 million and 797 million gallons per year. EIA projections also indicate that U.S. consumption of ethanol in motor gasoline and E85 is expected to increase between 196 million gallons (1.4 percent) and 1.4billion gallons (10.4 percent) above 2021 levels, depending on U.S. economic growth over the decade.
The projected increase in ethanol consumption across all scenarios—despite falling gasoline consumption in some scenarios—is due in part to EIA’s assumption that the Renewable Fuel Standard will increase total U.S. consumption of renewable fuels.
Total global demand for gasoline is expected to stagnate over the next decade, leaving changes in blend rates— domestically or abroad—as the main determinant for future changes in fuel ethanol demand. The other part of the report focused on blend rates outside of the United States and the impact that non-U.S. countries meeting their targets has on projected demand for fuel ethanol.
• Under the “Historical Blends” (HB) scenario, international fuel ethanol consumption is projected to increase by 0.75 billion gallons (5.7 percent) between 2018 and 2030 and by 0.95 billion gallons (7.4 percent) between 2021 and 2030. The projected 2018 to 2030 increase is primarily driven by an increased demand of 234 million gallons in India, 276 million gallons in Brazil, and 347 million gallons in China. The projected 2021 to 2030 increase is primarily driven by an increased demand of 113 million gallons in Thailand, 193 million gallons in China, and 739 million gallons in Brazil.
• Under the “Targeted Blends” (TB) scenario, international fuel ethanol consumption is projected to increase by 23.7 billion gallons (180 percent) between 2018 and 2030 and by 23.4 billion gallons (173 percent) between 2021 and 2030. The largest increases from 2018 to 2030 are projected to occur in Canada (3.3 billion gallons), China (5.6 billion gallons), and Brazil (6.4 billion gallons). The largest increases from 2021 to 2030 are also projected to occur in Canada (3.4 billion gallons), China (5.5 billion gallons), and Brazil (6.9 billion gallons).
Taken together, the HB and TB scenarios present an evaluation of fuel ethanol consumption outside the United States over the next decade. The HB scenario represents a USDA, Economic Research Service estimate under current trends, and the TB scenario represents a potential upper boundary based on certain policy and market scenarios.
The study did not assign the likelihood of any policy being implemented or discontinued. USDA’s ERS researchers did not model a scenario where countries reduce their ethanol consumption as there was not an established non-ad hoc approach to determining which countries would reduce consumption and by how much.
To view the full report, click here
