Refiners and blenders pocket 45 cents for every gallon of ethanol blended with gasoline. The subsidy, courtesy of the U.S. government, helps the industry stay afloat amidst the dwindling demand for gasoline and increasing costs of ethanol production. It's been argued that,
Ethanol has been blended with gasoline for years now in a fuel typically called E10 (which is made with 10 percent ethanol). E15 could soon become the new norm if, as industry experts predict, the U.S. reaches the "blend wall" and changes come soon.
Ethanol is widely regarded as a clean fuel source, but producing the biofuel can be an entirely different story. Plenty of guidelines exist to keep track of environmental concerns associated with ethanol production and, if those regulations aren't followed, you better be prepared for some stiff fines.
In a gesture to improve biofuel trade relations with the U.S. and other countries, Brazil's Council of Ministers of the Board of Foreign Trade (MDIC) has temporarily lifted the country's tariff on imported ethanol, changing the tax rate from 20 percent to zero percent. The tariff will be lifted through the end of 2011.
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Photo by Hummanna. Licensed under Creative Commons license 2.0.
While we spent a lot of late 2007 talking about the very real ethanol glut that was happening in America, the good news for people who have a lot invested in the biofuel (farmers, for one) is that prices have been on the upswing since mid-November. According to an article in the Wichita Eagle, the rebound is taking the form of a 35-cent-per gallon increase and is "within 10 cents of the wholesale price of unleaded gasolin
While the auto industry reactions were pretty much universally positive when the new energy bill passed earlier this month, Citigroup is ready to throw a bit of water on the parade. The banking giant is predicting that the new legislation will make ethanol even more expensive in 2008. According to an article on Sebastian Blanco
Here's the deal: ethanol is not the only reason that the average price of a bowl of cereal and milk is moving from 44 cents last year to 49 cents this year to an expected 56 cents next year. But, as AP writer Lauren Villagran explains, a weak U.S. dollar, high fuel prices and China's growing economy don't hide the fact that the rapid increase in corn ethanol production is affecting people at the grocery store.
What's better, high or low ethanol prices? It all depends on whom you're asking. For mega-bank Citigroup, higher prices mean things are "improving."
Good news for Brazilians: the prices for ethanol has dropped 38 percent because of an increase in sugarcane production. Prices will continue its decrease, according to Júlio Maria Borges, an analyst at JOB Consultaría, even when the harvest finishes.