Brazilian ethanol to compete with US biodiesel in 'advanced' pool

By Luke Geiver | October 20, 2011

All U.S. biodiesel classifies as an advanced biofuel under U.S. EPA’s RFS2 program, and the 2012 advanced biofuel pool of 2 billion gallons is considered an opportunity to grow the biodiesel industry beyond the confines of the 1 billion gallon biomass-based diesel volume required under the program. 

The EPA has already recognized sugarcane-based ethanol as an advanced biofuel, and it appears the Brazilian sugarcane association is making plans to take advantage of that classification. According to a release issued by UNICA, as of the beginning of October, 107 Brazilian sugarcane processing facilities have been registered. In February, that number was only 55. Although volume requirements for the conventional biofuel portion of the RFS2 in 2012 can easily be met by corn ethanol producers in the U.S., the same cannot be said for the required advanced biofuel volumes.

The recognition of sugarcane-based ethanol as an advanced biofuel is one that Leticia Phillips, representative in North America for UNICA, said makes the Brazilian-based fuel desirable in U.S. markets, “so it makes sense for Brazilian mills to prepare for this opportunity.” Philips also pointed to that opportunity as a reason for the increase in mills registering with the EPA as any biofuel producer would have to do in order to qualify for the RFS2.

Brazilian sugarcane-based ethanol producers are specifically targeting California, which features more stringent greenhouse gas regulations on any biofuel consumed in the state as part of California’s Low Carbon Fuel Standard. Under the state’s LCFS, 44 mills have already registered to export fuel to the state.

The Volumetric Ethanol Excise Tax Credit along with the import tariff on Brazilian ethanol is set to expire at the end of 2011.

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