Call for Action as Pandemic ‘Sets Back’ Biofuel Industry Growth
(Biofuels International) The Biofuture Platform is leading calls for urgent collaboration from policymakers following a 12% drop in biofuel output this year announced in the International Energy Agency. The multi-stakeholder initiative designed to take action on climate change by promoting international coordination on the sustainable low-carbon bioeconomy, has labelled this as a potentially critical setback, which could act as a barrier to green recovery and have long-term negative impacts on the decarbonisation of the transport sector.
Excerpt from Investing.com: Given its position as an additive, ethanol has always lagged the action in oil and gasoline. The ethanol content of most of the motor gasoline sold in the United States does not exceed 10% by volume.
Brighter Times Under Biden?
Some of those who track the industry, however, think ethanol could be in for brighter times with the environment-focused policies of President-Elect Joseph Biden, who takes office Jan. 20. While there are concerns the Biden administration will prioritize renewables over fossil fuels, market watchers think biofuel’s importance in the current energy mix looks set to be preserved.
Others are more pessimistic. They anticipate lower demand for gasoline through December due to the seasonal slack in fuel uptake during the winter, and more fallout from the COVID-19 pandemic. That will limit any upside for ethanol, they argue.
Dan Flynn, analyst at the Price Futures Group in Chicago, is expecting positive change for ethanol under the Biden administration. His rationale:
“On the ethanol front, the market is loving the continued success in the corn and soybeans strength. The industry is ready to jockey for position and see what type of transition of administrations will impact the grains and energy markets when the vote is officially certified.”
“The market will most likely follow the grains and energies, until there is more concrete news to deliver.”
Expect More Of The Same From Winter And COVID
Farzad Taheripour, research associate professor in the department of agricultural economics at Purdue University, argues that gasoline demand will likely drop by about 10% between now and the end of the year due to winter and other conditions. He says:
“We were projecting that by the end of 2020, the reduction in demand for gasoline would be less than 10%.”
In a blog posted on SeedWorld, he adds:
“Actual observations now confirm that the demand for gasoline in September was 9% lower than its level in 2019.” READ MORE
