Ameer Randolph
Ethanol fuel is a type of fuel that contains ethyl alcohol, the same type of alcohol found in alcoholic drinks. It is most often used as a motor fuel, and its consumption has been increasing globally. The top ethanol fuel-producing countries in 2011 were the United States and Brazil, which together accounted for 87.1% of world production. Other countries that use ethanol fuel include Canada, several European countries, China, India, and some Central American countries. Brazil has been the world's largest consumer of ethanol fuel for many years, and it has the largest and most successful biofuel programs in the world.
| Characteristics | Values |
|---|---|
| Top ethanol fuel-producing countries in 2011 | United States, Brazil |
| Top ethanol fuel-producing countries in 2023 | United States, Brazil |
| Countries with fledgling ethanol industries | Germany, Spain, France, Sweden, India, China, Thailand, Canada, Colombia, Australia, some Central American countries |
| Countries with the highest ethanol consumption in 2018 | Brazil, China, Canada, India, Thailand, Germany, Argentina, France, Japan, the United Kingdom |
| Countries with growing ethanol consumption | United States, European Union, Canada |
| Countries with poor E85 coverage | Switzerland, the Netherlands |
| Leading country in Europe regarding ethanol usage | Sweden |
| Countries with ethanol-blended fuel | Brazil, United States, Canada, Europe |
| Countries with ethanol-blended fuel in Central and South America | All countries in Central America, northern South America, and the Caribbean |
| Countries with ethanol fuel blending programs | India, Brazil, Colombia |
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What You'll Learn
Leading ethanol producers
The United States is the world's leading producer of ethanol fuel. In 2023, the US produced an estimated 15.6 billion gallons of biofuel, with most of it being produced from corn. The US is also the leading producer of biofuel overall. US ethanol production reached 57.54 billion litres in 2011, accounting for 62.2% of global production. In 2021 and 2022, the US produced over 15 billion gallons of ethanol.
Brazil is the second-largest producer of ethanol fuel in the world, accounting for over one-quarter of global ethanol fuel production in 2023. In 2011, Brazil produced 5.6 billion US gallons of ethanol, accounting for 25% of global production. Brazil has the largest and most successful biofuel programs in the world, with production of ethanol fuel from sugarcane. Brazil is considered to have the world's first sustainable biofuels economy. In 2006, Brazilian ethanol provided 18% of the country's road transport energy consumption. Brazil is also one of the largest markets for biofuels worldwide, with flexible-fuel vehicles being the most common type of light vehicles across the country.
Colombia's ethanol program began in 2002, with a law mandating a mix of 10% ethanol with regular gasoline, with the plan to gradually reach a 25% blend in 20 years. Sugarcane-based ethanol production began in 2005, with all of the ethanol production coming from the Department of Valle del Cauca, Colombia's traditional sugar cane region.
Sweden is the leading country in Europe regarding the use of ethanol as fuel, although it has to import most of its ethanol. All Swedish gas stations are required by an act of parliament to offer at least one alternative fuel.
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Brazil's ethanol usage
Brazil is one of the world's top ethanol fuel producers, alongside the United States. Together, the two countries accounted for 87.1% of the world's ethanol fuel production in 2011. Brazil's ethanol fuel program is based on the most efficient agricultural technology for sugarcane cultivation in the world. Sugarcane has been cultivated in the country since 1532 and was one of the first commodities exported to Europe by Portuguese settlers. The first use of sugarcane ethanol as fuel in Brazil dates back to the late 1920s and early 1930s, with the introduction of the automobile in the country.
In response to the 1973 oil crisis, the Brazilian government began promoting bioethanol as a fuel. The Pró-Álcool (National Alcohol Program) was launched in 1975 to phase out automobile fuels derived from fossil fuels in favor of ethanol produced from sugarcane. The government made it mandatory to blend anhydrous ethanol with gasoline, with percentages fluctuating between 10% and 22% from 1976 until 1992. In 1993, a federal law fixed the mandatory blend at 22% anhydrous ethanol (E22) by volume across the country. This law also allowed the executive branch to set different percentages of ethanol within pre-established boundaries. Since 2007, the mandatory blend has been 25% anhydrous ethanol and 75% gasoline or E25.
The success of "flex" vehicles, which can run on any proportion of gasoline and hydrous ethanol, coupled with the mandatory E25 blend, allowed ethanol fuel consumption in Brazil to achieve a 50% market share of the gasoline-powered fleet in February 2008. In 2018, flex-fuel cars that could run on pure ethanol or a gasoline-ethanol blend made up 80% of Brazil's light vehicle fleet. Brazil's car manufacturing industry has also developed flexible-fuel vehicles that can run on a blend of gasoline and hydrous ethanol, with flex vehicles dominating the passenger vehicle market with a 94% market share of all new cars and light vehicles sold in 2013.
Brazilian sugar companies are increasing their capacity to produce ethanol due to depressed global sugar prices and government policies expected to boost demand for biofuels. Brazil's dramatic switch to ethanol in the 2018-19 season slashed its sugar production by 20%, and the country could lose its position as the world's biggest sugar producer to India. However, the increased focus on biofuels has shielded Brazilian sugar cane processors from plunging global sugar prices.
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Ethanol in Europe
Ethanol, a type of alcohol-based fuel, is used in many countries around the world. The use of ethanol in Europe is driven by the mandates of the Renewable Energy Directive (RED), which aims to replace 10% of all energy used in transport with renewable energy by 2020.
In Europe, ethanol is mainly used as a biofuel additive for gasoline. Most petrol sold in Europe is a blend of 5% bioethanol and 95% gasoline, denoted by an E5 label. Some countries have moved to a new generation of fuel that contains up to 10% bioethanol, known as E10. This has become the primary type of petrol used in the UK since 2021. Belgium and France have also introduced E10, with major public information campaigns to raise awareness of its benefits.
Sweden is the leading country in Europe regarding the use of ethanol as fuel, with all Swedish gas stations required by law to offer at least one alternative fuel. As of July 2008, there were 1,200 stations offering bioethanol in Sweden, and one in five cars in Stockholm drove at least partially on alternative fuels, mostly ethanol.
In Germany, France, and the UK, the three largest consumers of ethanol in the European bloc, bioethanol markets were established but suffered due to the removal of federal tax incentives after 2015. In the Netherlands, regular petrol with no bio-additives is being phased out due to EU legislation that requires a minimum of 5.75% of total fuel consumption volume to be of non-mineral origin.
The European Committee for Standardization (CEN) has commissioned research into the costs and benefits of introducing a fuel containing 20% bioethanol (E20). The results of the project, which concluded in 2019, will help develop new quality and specification standards for E20 fuel.
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Central American initiatives
Central American countries have a long tradition of growing sugar cane, which is used to produce sugar and alcoholic beverages. In 2005, the Dominican Republic-Central America Free Trade Agreement (CAFTA) maintained the benefits granted by the Caribbean Basin Initiative (CBI), which was approved by the US in 1983. CAFTA provisions established country-specific shares for Costa Rica and El Salvador within the overall quota. An initial annual allowance was established for each country, with gradually increasing annual levels of access to the US market.
Brazil's president toured Mexico and several countries in Central America and the Caribbean in 2007 to promote Brazilian ethanol technology. The US and Brazil signed a Memorandum of Understanding (MOU) in 2007, which may bring the two countries closer on energy policy. Brazil is the world's second-largest producer of ethanol fuel and has led industrial production for several years, accounting for 26.1% of the world's ethanol fuel production in 2017. Brazil's success in the ethanol industry is due in part to investments in agricultural research and development by both the public and private sectors.
The US Grains Council's (USGC) Latin America office is leading efforts to promote ethanol blending across Central America and the Caribbean. The council organized the third "Growing Energy" conference in Costa Rica, bringing together ethanol industry leaders and policymakers to discuss the future of biofuels in Latin America. Costa Rica's Vice Minister of Energy, Ronny Rodríguez, spoke about the nation's goal of achieving a 10% ethanol blend in premium gasoline by 2026. Representatives from Guatemala and Panama discussed similar targets, with plans to implement ethanol blending by 2024.
The Brazilian Development Bank (BNDES) has also announced support for two new corn ethanol projects, which will boost the country's corn ethanol production capacity.
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India's ethanol blending program
India is one of several countries that are developing an ethanol fuel industry. The country is on its way to achieving its target of blending 20% of petrol with ethanol by 2025-26. This is part of the Ethanol Blended Petrol (EBP) Programme, which has been implemented throughout the country, except for the Union Territories of Andaman and Nicobar and Lakshadweep islands. Here, Oil Marketing Companies (OMCs) sell petrol blended with 10% ethanol.
The roadmap for achieving these targets involves increasing the capacity of sugarcane-based distilleries from 426 crore litres in 2021 to 760 crore litres in 2026. Grain-based distilleries' capacity should increase from 258 to 740 crore litres. In December 2023, the government announced that India's ethanol production capacity had already increased to 1,380 crore litres, with 875 crore litres coming from sugarcane and 505 crore from food grains. This means that the targeted total ethanol capacity has nearly been achieved, although with a greater sugarcane-based component.
The development of the ethanol economy has impacted different states in varying ways. While fuel ethanol pricing is the same across India, states determine the pricing of Extra Neutral Alcohol (ENA) used in consumable liquor and other uses. Uttar Pradesh, for example, reserves 25% of its ethanol for ENA. The pricing of ENA has been a deciding factor for sugarcane-based distilleries in choosing between highly pure fuel ethanol and ENA.
The Indian government has taken several steps to increase the production of ethanol, including amending the Industries (Development & Regulation) Act, 1951, to allow the central government exclusive control of denatured ethanol to ensure its smooth movement across the country. The government has also reduced the Goods & Service Tax (GST) on ethanol for the EBP Programme from 18% to 5%.
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Frequently asked questions
Many countries use ethanol fuel for cars, including Brazil, the United States, Canada, China, India, Germany, France, the United Kingdom, and some Central American countries.
The United States is the largest producer of ethanol fuel, producing 13.9 billion US gallons in 2011 and 15.6 billion gallons in 2023.
Brazil was the world's largest consumer of ethanol fuel from 1981 to 2002 and the second-largest consumer from 2003 to 2018, after the United States.
The E10 standard, which contains 10% ethanol, has been the primary type of petrol used in the UK since the end of summer 2021.
Brazil's ethanol fuel is mainly produced from sugarcane, and the country is considered to have the world's first sustainable biofuels economy.
