Bioethanol Market

Bioethanol Market

Bioethanol is set to have and important role as a transition solution for road transport, due to the need to reduce greenhouse gas emissions and the difficulty of immediately changing the road transport fleet to electric vehicles. Europe has decided to minimize its greenhouse gas emissions, for which it has set short, medium and long term goals:
  • RED I – 2020: 20% reduction in greenhouse gas emissions in relation to 1990, increasing renewable energy use up to 20% compared to the total used, with 10% in the transport sector and increasing energy efficiency to 20%.
  • RED II – 2030: 40% reduction in greenhouse gas emissions in relation to 1990, increasing the use of renewable energy to 32% compared to the total used, with 14% in the transport sector and increasing to 32.5% the energy efficiency.
  • 2050: reduce between 80 and 95% of greenhouse gas emissions in relation to 1990, and make the economy efficient in relation to energy use and with very low emission rates.

These objectives can currently only be met by increasing the use of biofuels, so forecasts for ethanol demand until 2030 are increasing, due to the following estimates:

  • Restrictions on the use of vehicles with diesel engines. New car registration trend has changed, being gasoline cars the majority of new car registrations. Estimates are that the diesel car fleet will go down to 15%. In 2012 it was 60%.
  • Increase in the number of vehicles in circulation, mostly using gasoline or hybrids.
  • The massive use of electric vehicles (BEV or PHEV) will not occur before the year 2030, it is estimated that the sales of these vehicles in 2030 will be only between 30 and 40%.
  • Second generation technology not available at commercial scale for the medium term.

The demand for ethanol can be incentivized through the following mechanisms:

  • European and national regulations, which involve the use in a greater proportion of biofuels.
  • The demand for gasoline, which should continue to increase based on new cars registration even manufacturers are determined to increase the efficiency of internal combustion engines.
  • The continuous incorporation of E10 as most common blend in EU.
  • The increase in the demand for mixtures with higher ethanol content (E85), due to certain positive fiscal considerations that make it a more economical and sustainable alternative. This fuel can be used in Flex Fuel vehicles or those converted to that system.