The United States exported 87 000 bpd of fuel ethanol in 2020, marking the second consecutive annual drop in US fuel ethanol exports and the lowest level since 2015. US fuel ethanol imports also decreased in 2020. In 2020, the United States exported more fuel ethanol than it imported for the 11th consecutive year.
Annual US fuel ethanol exports fell by 9% in 2020. At the same time, the number of export destinations increased from 44 in 2019 to 52 in 2020. Approximately 40% of all US fuel ethanol exports went to Brazil and Canada, although both countries decreased their imports of fuel ethanol from the United States compared with 2019.
Brazil, the world’s second-largest producer and consumer of fuel ethanol, decreased its imports of US fuel ethanol significantly for the second consecutive year, dropping to 13 000 bpd in 2020. Ethanol consumption is high in Brazil because of its fuel ethanol blending requirement, which is currently set at 27%, and demand for hydrous ethanol (E100), which competes with traditional gasoline blends. Brazil primarily produces fuel ethanol from sugarcane. As a result, Brazil produces most of its fuel ethanol during the sugarcane harvest period (May through October). Brazil’s imports of US fuel ethanol typically peak in between harvest seasons.
The US and Brazil are trade partners for fuel ethanol. The US decreased its sugarcane fuel ethanol imports from Brazil in 2020 to 9000 bpd, down 4000 bpd from its 2019 level. US fuel ethanol imports from Brazil all entered the US through California because of the fuel’s favourable treatment compared with domestic corn ethanol under California’s Low Carbon Fuel Standard (LCFS). According to the LCFS scoring system, Brazil’s sugarcane ethanol emits less carbon dioxide than US corn ethanol sources.
US exports of fuel ethanol to Brazil declined in 2020 mostly as a result of uncertainty related to Brazil’s tariff-free quota, Brazil's responses to COVID-19 that decreased fuel demand, and the depreciation of the Brazilian real against the US dollar. All US fuel ethanol exports to Brazil face a 20% Brazilian tariff since the tariff-free fuel ethanol quota expired on 14 December 2020. This recent change will likely lower US fuel ethanol export volumes to Brazil in the near term.
Canada surpassed Brazil in 2020 to become the top destination for US fuel ethanol exports. Canada’s average of 21 000 bpd of fuel ethanol imports has remained largely unchanged over the past few years. The third-largest destination in 2020 for US fuel ethanol exports was India, followed by South Korea and the Netherlands. The remaining 47 destinations received approximately one-third of US fuel ethanol exports.
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