Global ethanol consumption falls in 2011, but long-term bright: Czarnikow

In the UK, “After a decade of expansion, bio-ethanol usage fell in 2011,” sugar traders Czarnikow said. “This comes despite a rise in crude oil prices that should make renewable alternatives competitive: So why the fall?”

Over the long-term, Czarnikow said that higher crude prices make biofuels more viable. Short-term, the reverse has happened, as rising crude has reduced overall fuel consumption in the U.S, and hence consumption of ethanol via the country’s mandated fuel mix (“E10”, or 10% ethanol). But for U.S. exporters, Brazil remains a promising market, amid falling cane production and a shortage of domestic ethanol. Toby Cohen, director at Czarnikow, added: “The growth in bio-ethanol usage over the past decade has been huge. Despite short-term headwinds, the trend is set to continue with new technologies playing an increasing role”.