On November 30, 2018, the Environmental Protection Agency (EPA) published its final rule for the 2019 renewable volume obligations (RVOs) for cellulosic biofuel, advanced biofuel, and total renewable fuel under the Renewable Fuel Standard (RFS). This also contained the EPA’s final rule for biomass-based diesel (BBD) volume standards for calendar year 2020. The EPA was required by law to issue a final rule setting the 2019 RVOs by November 30.
The negative impact on U.S. ethanol exports to Brazil due to Brazil’s 159 million gallon (600 million liter) annual ethanol import tariff rate quota (TRQ), or 20 percent out-of-quota tariff, has been partially offset by consistently high gasoline prices. From January to October 2018, Brazil has been the main destination for U.S. ethanol exports, with shipments reaching 425 million gallons. Exports to Brazil were up 19 percent year-over-year and made up 30 percent of total shipments during the first 10 months of 2018. Brazil’s ethanol blending rate remains at 27 percent (E27). According to the USDA-FAS report, high gasoline prices, as well as a sustained surplus of sugar in the world market in the 2018/19 marketing year, are boosting Brazil’s sugar-ethanol production this year, which is projected up 9 percent to 30.755 billion liters (8.12 billion gallons) from 2017. In addition, Brazil is expected to import 2.0 billion liters (528 million gallons) of ethanol in 2018. Brazil’s ethanol imports are mainly for fuel use and are almost entirely sourced from the United States. Given the pace of U.S. ethanol shipments so far, and the expected volume of Brazil’s ethanol imports, 2018 could be a record year for U.S. ethanol exports to that country. The TRQ will be reevaluated two years after its implementation (September 1, 2019).
A recent study conducted by FTI Consulting on the U.S. biodiesel industry looks at the impact of biodiesel tax credit on the biodiesel industry growth. The study shows the biodiesel tax credit is essential to the industry’s growth and prosperity. In addition, the study finds the U.S. biodiesel industry supported $21.6 billion in sales, created employment for over 60,000 workers adding $3.8 billion, plus approximately $2 billion in state/federal tax revenues combined in 2017. FTI Consulting’s study that shows the impacts of biodiesel industry on the U.S. economy, environment, and energy security can be found here.
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