IEA drops US ethanol outlook, citing policy uncertainty

In France, the International Energy Agency released its 2013 Mid-Term Oil Market Report, projected that US ethanol growth will stall almost completely through 2018 due to political opposition to the US Renewable Fuel Standard, the ethanol blend wall, stalling gasoline demand, and rising feedstock costs.

“Though there is no clear indication the RFS2 will be amended, growing market perception of policy uncertainty introduces an additional downside risk to our medium-term forecast,” the IEA’ report said.

The IEA is projecting 937,000 barrels/day of US biofuels production in 2013, a drop of 4 percent from its last year’s forecast for 2013 production – though the US will continue to account for 48 percent of global biofuels production. Overall global demand is expected to rise to 2.4 million barrels per day by 2018, up from 1.8 million barrels.day in 2013.