What is Fuel Ethanol?
Fuel ethanol makes up for a growing fraction of overall fuel consumption in most countries. Investments have accelerated dramatically over the last decade, particularly in Brazil, the US and Europe, as governments in these regions introduced ambitious policies and mandatory targets for renewable fuels.
Exponential growth in ethanol consumption been driven by various aspects, including energy security, the need to address climate change issues and achieve lower gas emissions, as well as a push to create and sustain new jobs in agriculture and biotechnology.
Today, the US and Brazil together represent around 90% of the ethanol produced and consumed in the world. In the US, ethanol already makes up for around 10% of the gasoline market and consumption is set to more than double by 2022.
In Brazil, ethanol can be used as a standalone biofuel in over half of the country's light vehicle fleet thanks to the widespread introduction of flex-fuel cars, which can run on either gasoline or ethanol or any mixture of the both.
S&P Global Commodity Insights publishes several Platts fuel ethanol price benchmarks tailored to specific markets in the US, Brazil, Europe and Asia that are used by the industry to manage risk in this growing market and along the entire transport fuels chain.
Platts' fuel ethanol prices in the Chicago and Rotterdam marketplaces are also used by exchanges to settle derivatives contracts.