University of Illinois at Urbana-Champaign professors Scott Irwin and Darrel Good have drastically revised a prediction <a href="http://ethanolproducer.com/articles/9437/brazilian-ethanol-expected-to-help-meet-advanced-biofuel-mandate" target="_blank">posted</a> to the university&rsquo;s farmdoc daily website on Jan. 10, which noted that Brazilian ethanol was expected to meet a significant portion of the renewable fuel standard (RFS) advanced biofuel volume mandates for 2013. In a new post published on Jan. 16, they respond to several comments made by readers, and ultimately determined that under current economic conditions, domestically-produced biodiesel will likely be the most attractive fuel to obligated parties for meeting the mandate. However, they specify that could change if soy oil prices increase by 10 percent or more.
In the post, Irwin and Good respond to three primary comments:
- That there a 2.5 percent Ad Volorem tax on Brazilian ethanol that adds to its cost
- Under the scenario of an ethanol blend wall, substituting Brazilian ethanol for domestically produced ethanol results in an opportunity cost to the blender
- Relative economics of the two products may vary by location within the U.S.
Taking these factors into account, Irwin and Good agree that the use of biodiesel represents an economic advantage. However, they also note that the incentive for using biodiesel could cause prices for soybeans corn feedstock to increase, tipping the scale back in favor of Brazilian ethanol. They estimate that biodiesel prices would need to increase by about 40 cents per gallon for this to happen.&nbsp;&nbsp;
&ldquo;The biofuels and petroleum industries are still adjusting to the changing market realities brought on by the reinstatement of the biodiesel tax credit,&rdquo; said Irwin and Good in the post. &ldquo;It is not yet clear how the RFS for advanced biofuels will be met in 2013, but clues will be provided by changing price relationships and the pace of weekly ethanol imports available <a href="http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&amp;s=W_EPOOXE_IM0_NUS-Z00_MBBLD&amp;f=W" target="_blank">here</a> and the pace of biodiesel production reported <a href="http://www.eia.gov/biofuels/biodiesel/production/" target="_blank">here</a>.&rdquo;
A full copy of the post can be accessed on the farmdoc daily <a href="http://farmdocdaily.illinois.edu/2013/01/domestic-biodiesel-versus-brazilian.html" target="_blank">website</a>.
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University of Illinois at Urbana-Champaign professors Scott Irwin and Darrel Good have revised a prediction posted to the university's farmdoc daily website on Jan. 10 regarding the use of Brazilian ethanol and biodiesel to meet 2013 mandates. 

Professors revise RFS advanced biofuel estimates

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