It
has been used as a fuel for over 100 years, with the first ethanol-powered
vehicles appearing in the late 1880s. However, it wasn’t until the 1973 oil
crisis that several countries began introducing it into their fuel supplies as
a way to reduce dependence on imports. Brazil was one of the early adopters and
today obtains over 40% of its transportation fuel from sugarcane-based ethanol.
In the United States, corn-based started gaining momentum in the late 1970s and
the Renewable Fuel Standard was established in 2005, mandating the blending of
increasing volumes of renewable fuels into gasoline.
Production Methods
There are two primary methods for producing it – from grain or from cellulosic
waste materials. Grain Ethanol
is the most common type produced today, with over 99% coming from corn in
the U.S. The process starts by milling the corn kernels to extract starch, then
using enzymes and yeast to ferment the starch into it. It is separated using a
distillation process. Cellulosic ethanol can be made from numerous waste
materials high in cellulose like agricultural residues, forestry waste,
municipal solid waste, and energy crops. However, breaking down the cellulose
into fermentable sugars is more complex, so commercial cellulosic ethanol
facilities are still limited. Lignocellulosic has the potential to utilize many
more feedstocks than first generation grain.
Impact on the Fuel Supply
The blending of it into gasoline reduces petroleum use and imports. In 2020,
around 15 billion gallons of corn ethanol displaced over 1 billion barrels of
imported oil. Biofuel producers credit with lowering fuel prices due to reduced
oil consumption. However, others argue that federal mandates artificially
inflate demand and corn prices, raising costs to livestock and food producers.
Studies on the energy balance of corn have shown it lowers lifecycle greenhouse
gas emissions by around 43% compared to gasoline. Cellulosic has an even
greater emissions reduction potential of over 80-90%, but higher production
costs currently limit its market penetration.
International Markets
Outside of the U.S., Brazil remains the largest producer with most fuel derived
from sugar cane. Europe has also developed industries in recent years driven by
climate targets, though volumes remain below the U.S. and Brazil. China has
plans to massively increase its use to curb rising oil imports and air
pollution, but has relied primarily on corn imports so far. Other countries
like Canada and Colombia also use it but on a much smaller scale than the top
three. Given the available resources, countries in tropical regions have the
clearest advantages for cellulosic production using agricultural residues or
energy crops. International trade could help match expanding demand with local
feedstock opportunities.
Outlook for Markets
Projections for it use vary significantly depending on factors like policy
support, technology advances, and oil prices. The U.S. Energy Information
Administration estimates domestic consumption rising to around 20 billion
gallons by 2030 under current RFS levels. Private analysts think cellulosic
capacity could grow tenfold by 2030 but still remain a small portion of total
renewable fuel use. Other models show gasoline demand peaking within the next
decade due to electrification of transport, potentially limiting it blending
opportunities. Overall most analyses point to steady increases in global
production led by the U.S., Brazil, and China as nations pursue low-carbon fuel
goals and energy security. But long-term prospects will rely heavily on
reducing production costs and developing cellulosic at commercial scale.
In conclusion, it has already provided meaningful contributions to the global
fuel supply as a renewable alternative to petroleum. Grain-based production is
an established industry, while cellulosic technologies offer even greater
emission reductions if costs can be minimized. Policy support and technology
progress will be determining factors in how significantly markets may grow
worldwide in the coming decades as a replacement for oil-based transportation
fuels.
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