Ethanol Production, Demand Down

EIA: US Ethanol Production, Demand Seen Holding Below 2019

OAKHURST, N.J. (DTN) -- Fuel ethanol production this year and in 2022 will remain below the 2019 output rate because of limited potential growth in higher-blended ethanol sales and the lingering impact of COVID-19 responses on gasoline demand, the Energy Information Administration said in its latest Short-term Energy Outlook on Wednesday.

Fuel ethanol production is seen averaging 970,000 barrels per day (bpd) this year, up 7% from 2020, which was down 12% from the 2019 output rate and is expected to average 1 million bpd in 2022, 4% more than this year yet still slightly below the 1.03 million bpd 2019 production rate.

Fuel ethanol consumption, which averaged 949,000 bpd in 2019 and fell 13% to average 822,000 bpd in 2020, is seen gradually rising on growth in gasoline consumption. U.S. fuel ethanol consumption is expected to average 896,000 bpd in 2021 and 917,000 bpd in 2022.

"This level of consumption results in the fuel ethanol share of total gasoline, which was an estimated 10.2% in both 2019 and 2020, remaining near this level during 2021 and 2022. This stable fuel ethanol share assumes that growth in higher-level fuel ethanol blends is limited by a lack of consumer demand for higher levels of fuel ethanol blending beyond 10% of gasoline (E10) despite significantly elevated renewable identification number (RIN) prices which could incentivize increased fuel ethanol blending by some gasoline blenders and retailers."