Our industry 2014 - (Page 11)
Global challenges 01
11
Demand
Since December 2011 the tax credit on ethanol production (46 cents/gallon)
as well as US import tariffs on foreign bioethanol (54 cents/gallon) have been
discontinued. However the US ethanol production and demand have remained
resilient. While the figures in the previous graph are correct at time of
publication, the current overall budget discussions in the United States may
result in changes to the RFS commitments and requirements.
In Brazil, ethanol from sugar cane produces ~35% of the world's bioethanol
and has replaced ~35% of the gasoline used in light vehicles in the country.
Sugar cane ethanol represents a low carbon and cost efficient fuel option in
comparison to many other biofuels.
Sugar cane: low carbon and cost-efficient fuel option
CO2 balance
%
Crude oil equivalent
US$ per barrel
100
180
80
One ton of sugar cane
produces 80 liters of
ethanol compared
to 38 liters from one ton
of corn
150
US$ 100 per barrel
oil price
128
110
85
40
45
10
Oil based gasoline
Corn ethanol
Oilseed rape
10
Palm
Cellulose
Sugar cane
10
Brazil sugar cane
US corn
Malaysia palm
EU wheat
US soybean
EU oilseed rape
CO2 output from sugar
cane bioethanol is
90% lower than oil-based
gasoline
Sources: Farrell et aI, Science January 2006; GTZ; Syngenta
The Brazilian government continues to strongly support the bioethanol industry
and has returned to the mandatory blend of 25% in May 2013 (after two
consecutive years of poor sugar cane yields the mandate was temporarily
reduced to 20%). Around 60% of the country's automobile fleet is composed
of flex-fuel cars.
The EU Renewable Energy Directive in 2009 established a target of
a minimum of 10% renewables in transport for 2020 and requested national
action plans for each member state to outline a path for meeting the target.
More recently, an increasing public debate on competition between food and
fuel, aggravated by high crop prices, triggered the European Commission to
submit a draft biofuels policy limiting food-crop based biofuels to 5% of EU
transport fuel consumption. The draft still needs to be approved by the EU
governments.
Brazil mandatory biofuels
blend rate planned to
return to 25% as sugar
cane production shows
signs of recovery
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Our industry 2014
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