WORLDBIOFUELS

## 316 / World Biofuels: FAPRI 2009 Agricultural Outlook 

# World Ethanol The world ethanol price increased 13.7% in 2008, to $1.76 per gallon. It is projected to decrease by almost 16%, to $1.48 per gallon, in 2009 because of the dramatic drop in crude oil prices coupled with a signi fi cant reduction in U.S. ethanol imports. The ethanol price continues its downward trend until 2011, after which it begins to increase because of higher ethanol demand from the U.S. brought about by the EISA 2007 biofuel mandates. World net trade increased by 20.2% in 2008; it decreases in 2009 by 1.3%. As world demand for ethanol increases more than production over the projection period, net trade is expected to rise by 302.5%, reaching 4.9 billion gallons by 2018. Brazil’s ethanol production totaled 6.7 billion gallons in 2008, an increase of 21%. This translates into 293.3 mmt of sugarcane used in ethanol production. Production of ethanol in Brazil increases 111.2% by the end of the projection period, to 14.1 billion gallons. Sugarcane used in ethanol production increases 88.2%, reaching 552 mmt by 2018. Brazil’s ethanol consumption increased in 2008 by 21.3%, to 5.5 billion gallons. Its ethanol consumption is projected to increase 66.9% by 2018. Brazil’s net ethanol exports reach 4.9 billion gallons in 2018, an increase of 320.4%, partly because of the increase in U.S. ethanol import demand. Ethanol production in the EU increased almost 26% in 2008. EU ethanol production is projected to reach 1.6 billion gallons in 2018, an increase of 175.1%. Consumption in the EU increased 26.2% in 2008, to 0.9 billion gallons. It is expected to reach 2.2 billion gallons in 2018, an increase of 146% over the decade. Total EU biofuels consumption reaches 3.1% of transport fuels in 2018. EU net imports rise from 318 million gallons in 2008 to 617 million gallons by 2018 as consumption increases more than production. Chinese fuel ethanol production increased 9.3% in 2008, to 500 million gallons. Production is projected to continue to increase and reach 622.8 million gallons by 2018. Ethanol consumption in China increased in 2008 to 448 million gallons. It increases 59.2%, to 713.8 million gallons, by 2018. China becomes a net importer of ethanol in 2011. Its net imports reach 91 million gallons in 2018. In India, ethanol is produced mainly from molasses, a co-product in sugar production from sugarcane. India’s ethanol production decreased by 9.8%, from 571 million gallons in 2007 to 515 million gallons in 2008 because of a decline in sugarcane production. Production rises to 578 million gallons in 2018, an increase of 12.2%. Consumption of ethanol in India was 490 million gallons in 2008 and is projected to increase 51%, to 739.5 million gallons, in 2018. India’s net imports increase to 171.6 million gallons in 2018.

## World Biofuels: FAPRI 2009 Agricultural Outlook / 317 

# World Biodiesel The world price of biodiesel (Central Europe FOB) decreases to $3.74 per gallon in 2009, driven by a lower crude oil price and large supplies in the world market. The price then recovers as EU countries attempt to achieve their biofuel targets and because of rebounding crude oil prices. Expanded production in Argentina and Brazil also contributes to the temporary price decline and to a sharp increase in exports before the start of the countries’ B5 mandates. However, the world price increases to $5.56 per gallon by 2018, driven by higher demand from the EU. World net trade plunges in 2010 as Argentina, Brazil, and Indonesia increase their mandate-driven consumption. Net trade averages 786 million gallons over the rest of the baseline, driven mainly by strong EU demand. Currently, the EU has the world’s most developed biodiesel industry. Production increased 6% in 2008, but it declines 7% in 2009 because of strong competition from abroad. Domestic production then recovers and reaches 2.6 billion gallons by 2018. Pushed by the biofuel target, domestic consumption continues to grow during the outlook period, reaching 2.9 billion gallons by 2018. The biodiesel share of diesel in transport is, however, still only 4.2%. Net imports increase rapidly between 2008 and 2009 as a sizeable volume of biodiesel is delivered from Argentina and Brazil. However, net imports slow down when these two countries’ B5 mandates are executed in 2010. Net imports are expected to hit 291 million gallons at the end of the decade. Encouraged by its biodiesel mandate and the world market, Argentina’s biodiesel production expands from 269 million gallons to 500 million gallons between 2008 and 2018. Domestic consumption jumps signi fi cantly in 2010 as the B5 mandate is exercised. Consumption continues to increase for the remainder of the outlook period but at a slower pace, hitting 230 million gallons by 2018. Net exports grow to 320 million gallons in 2009 and then drop by 41% the following year because of the mandate. Trade rebounds in 2011 and grows to 270 million gallons by 2018. Similar to the outlook in Argentina, Brazil’s biodiesel production is motivated by its mandate and the international market. Production increases to 875 million gallons by the end of the decade. Consumption jumps in 2008, 2009, and 2010 because of the mandate (B2.5 by 2008, B3 by 2009, and B5 by 2010). Domestic use is projected to reach 719 million gallons by 2018. Because of the mandate, Brazil’s net exports drop by 59% in 2010 and then grow for the remainder of the outlook, supplying 157 million gallons by 2018. Indonesian production increased from 30 million gallons in 2007 to 105 million gallons in 2008, driven by strong production margins. The growth in the industry slows down over the rest of the baseline because of a rise in palm oil prices relative to biodiesel. By the end of the period, production hits 309 million gallons. A domestic consumption mandate is implemented starting in 2009. As the mandate-driven consumption increases, net exports decline from their peak of 173 million gallons in 2012 to 112 million gallons in 2018.

## 318 / World Biofuels: FAPRI 2009 Agricultural Outlook



# Ethanol Trade

Net Exporters Brazil China Total Net Exports * Net Importers Canada European Union India Japan South Korea United States ROW Total Net Imports * Prices Anhydrous Ethanol Price, Brazil ** Ethanol, FOB Omaha Note: 1 gallon = 3.7857 liters; 1 metric t o * Total net exports are the sum of all pos ** Represents world ethanol price. 

# Biodiesel Trade

Net Exporters Argentina Brazil Indonesia Malaysia United States Total Net Exports * Net Importers European Union Japan ROW Total Net Imports * Prices Central Europe FOB Price ** Biodiesel Plant Note: 1 gallon = 3.7857 liters; 1 metric t o * Total net exports are the sum of all pos ** Represents world biodiesel price. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 1,165 1,169 1,466 1,820 2,124 2,395 2,818 3,268 3,647 4,236 4,896

52 31 13 -9 -21 -35 -44 -54 -67 -78 -91 1,216 1,201 1,479 1,820 2,124 2,395 2,818 3,268 3,647 4,236 4,896

165 260 312 364 412 460 503 550 599 657 711 318 318 352 401 436 467 494 523 559 586 617

0 23 59 90 107 120 130 139 153 163 172 149 196 234 273 308 343 377 412 447 481 516 81 104 132 154 175 195 215 236 257 276 297 436 195 250 353 454 528 772 1,037 1,211 1,605 2,070

67 104 140 176 212 247 282 317 353 388 423 1,216 1,201 1,479 1,820 2,124 2,395 2,818 3,268 3,647 4,236 4,896 (U.S. Dollars per Gallon) 1.76 1.48 1.36 1.29 1.34 1.37 1.45 1.51 1.53 1.62 1.69 2.47 1.68 1.75 1.81 1.91 1.99 2.10 2.19 2.17 2.06 2.00 o n = 1237.1644 liters. s itive net exports.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 264 320 188 218 239 253 262 268 270 271 270

-1 167 69 103 127 144 154 160 162 161 157 102 117 149 166 173 171 165 155 143 128 112 51 47 48 48 48 48 48 47 47 47 47 353 322 284 244 199 178 174 178 184 187 184 771 974 737 779 785 794 803 809 806 794 769

300 487 253 296 304 313 323 329 327 315 291

4 19 17 16 15 15 15 15 15 14 14 465 468 468 467 466 466 466 465 465 465 464 771 974 737 779 785 794 803 809 806 794 769 (U.S. Dollars per Gallon) 5.25 3.74 4.08 4.47 4.73 4.86 5.02 5.14 5.28 5.43 5.56 4.64 3.45 3.53 3.84 4.12 4.24 4.33 4.41 4.49 4.59 4.69 o n = 1136.36 liters. s itive net exports.

## World Biofuels: FAPRI 2009 Agricultural Outlook / 319 

# U.S. Biofuels Produc t

Ethanol Production Consumption Net Trade Biodiesel Production From Soybean Oil From Other Fats and Oils Consumption Net Trade 

# Argentine Biofuels P r

Biodiesel Production Consumption Net Trade Use in Biodiesel Production Soybean Oil 

# Brazilian Biofuels Pr o

Ethanol Production Consumption Net Trade Use in Ethanol Production Sugarcane Biodiesel Production Consumption Net Trade Use in Biodiesel Production Soybean Oil 

# Canadian Biofuels P r

Ethanol Production Consumption Net Trade Use in Ethanol Production Corn Wheat 

# c tion and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 9,262 10,295 11,504 12,384 13,185 13,715 14,508 15,320 15,990 16,361 16,736 9,511 10,387 11,680 12,693 13,597 14,220 15,243 16,318 17,163 17,936 18,781 -436 -195 -250 -353 -454 -528 -772 -1,037 -1,211 -1,605 -2,070

677 804 921 1,040 1,149 1,178 1,174 1,178 1,184 1,187 1,184 394 429 496 578 656 668 657 658 661 663 660 284 375 425 462 493 510 517 520 522 524 525 324 482 638 796 950 1,000 1,000 1,000 1,000 1,000 1,000 353 322 284 244 199 178 174 178 184 187 184 

# P roduction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 269 333 380 414 439 458 472 482 490 496 500

6 13 192 196 200 205 210 214 219 225 230 264 320 188 218 239 253 262 268 270 271 270 (Thousand Metric Tons) 941 1,157 1,314 1,427 1,507 1,564 1,604 1,631 1,649 1,661 1,667



# r oduction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 6,673 7,749 8,546 9,140 9,662 10,190 10,843 11,558 12,258 13,119 14,091 5,509 6,508 7,067 7,318 7,539 7,796 8,027 8,291 8,612 8,885 9,197 1,165 1,169 1,466 1,820 2,124 2,395 2,818 3,268 3,647 4,236 4,896 (Thousand Metric Tons) 293,259 326,134 356,811 378,589 397,029 415,414 438,506 463,708 487,905 518,019 551,996 (Million Gallons) 291 528 682 728 765 794 818 837 853 865 875 266 361 613 626 638 651 664 677 691 704 719

-1 167 69 103 127 144 154 160 162 161 157 (Thousand Metric Tons) 863 1,557 1,997 2,115 2,205 2,273 2,323 2,359 2,384 2,400 2,408 

# roduction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 222 247 261 261 263 266 271 275 284 292 301 387 507 573 625 675 726 774 825 883 949 1,012 -165 -260 -312 -364 -412 -460 -503 -550 -599 -657 -711 (Thousand Metric Tons) 1,615 1,796 1,898 1,898 1,914 1,936 1,969 2,003 2,064 2,122 2,191

695 772 816 816 823 832 847 861 887 912 942

## 320 / World Biofuels: FAPRI 2009 Agricultural Outlook 

# Chinese Biofuels Pr o

Ethanol Production Consumption Net Trade Use in Ethanol Production Corn 

# European Union Bio f

Ethanol Production Consumption Net Trade Use in Ethanol Production Wheat Corn Barley Biodiesel Production Consumption Net Trade Use in Biodiesel Production Rapeseed Oil Soybean Oil Sunflower Oil 

# Indian Biofuels Prod u

Ethanol Production Consumption Net Trade 

# Indonesian Biofuels P

Biodiesel Production Consumption Net Trade Use in Biodiesel Production Palm Oil 

# o duction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 500 509 516 522 535 548 562 577 591 607 623 448 478 503 531 556 582 607 631 659 686 714

52 31 13 -9 -21 -35 -44 -54 -67 -78 -91 (Thousand Metric Tons) 3,403 3,630 3,690 3,737 3,798 3,890 3,985 4,091 4,197 4,303 4,417 

# f uels Production and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 569 683 800 889 983 1,079 1,178 1,276 1,370 1,469 1,566 887 1,001 1,152 1,290 1,420 1,547 1,672 1,799 1,930 2,056 2,183 -318 -318 -352 -401 -436 -467 -494 -523 -559 -586 -617 (Thousand Metric Tons) 1,385 1,663 1,947 2,163 2,393 2,627 2,868 3,105 3,335 3,576 3,812

378 453 531 590 653 716 782 847 910 975 1,040 630 756 885 983 1,088 1,194 1,304 1,411 1,516 1,625 1,733 (Million Gallons) 1,711 1,594 2,048 2,148 2,228 2,257 2,325 2,386 2,454 2,527 2,617 2,012 2,083 2,303 2,446 2,533 2,571 2,649 2,716 2,782 2,844 2,909 -300 -487 -253 -296 -304 -313 -323 -329 -327 -315 -291 (Thousand Metric Tons) 5,077 3,131 4,439 4,713 5,022 5,265 5,533 5,723 5,933 6,156 6,343

702 1,074 1,260 1,284 1,291 1,264 1,253 1,233 1,217 1,200 1,184

54 474 504 515 526 528 532 535 539 543 549 

# uction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 515 497 488 487 498 509 523 537 548 563 578 490 513 543 572 595 620 642 666 693 716 739

0 -23 -59 -90 -107 -120 -130 -139 -153 -163 -172 

# Production and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 105 172 218 249 270 284 293 300 304 307 309

3 55 69 83 97 112 128 144 161 179 197 102 117 149 166 173 171 165 155 143 128 112 (Thousand Metric Tons) 367 601 760 869 942 992 1,025 1,048 1,063 1,073 1,079

## World Biofuels: FAPRI 2009 Agricultural Outlook / 321 

# Japanese Biofuels P r

Ethanol Net Trade Biodiesel Net Trade 

# South Korean Biofue

Ethanol Net Trade 

# Malaysian Biofuels P

Biodiesel Net Trade 

# Rest of World Biofue

Ethanol Net Trade Biodiesel Net Trade 

# roduction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) -149 -196 -234 -273 -308 -343 -377 -412 -447 -481 -516

-4 -19 -17 -16 -15 -15 -15 -15 -15 -14 -14



# e ls Production and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) -81 -104 -132 -154 -175 -195 -215 -236 -257 -276 -297 

# P roduction and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) 51 47 48 48 48 48 48 47 47 47 47



# e ls Production and Consumption 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Million Gallons) -67 -104 -140 -176 -212 -247 -282 -317 -353 -388 -423

-465 -468 -468 -467 -466 -466 -466 -465 -465 -465 -464