Currently, bioethanol stands as the primary renewable energy source in the U.S. and is widely used in gasoline blends. A common perception is that the crops used for ethanol production compete directly with food production. However, this is no longer the case. The ethanol industry primarily utilizes Dent Corn, a specific variety distinct from the Food-Grade or Sweet Corn we consume.
Interestingly, the processing of Dent Corn for ethanol yields valuable byproducts, notably Distillers Dry Grain (DDG) and Cereal Oils. DDG has become a fundamental feed source for livestock, including cattle, poultry, and hogs, thus indirectly supporting the human food chain. Furthermore, the bioethanol sector is continually enhancing DDG production to better preserve proteins and amino acids, leading to improved feed-conversion ratios and greater efficiency in livestock farming.
At Benchmark, we favor sorghum as a feedstock for ethanol production due to its significant advantages over corn. Sorghum exhibits greater drought tolerance, lower input costs, reduced competition for land use, and the potential for cellulosic ethanol production. The high starch content in sorghum grains makes them readily convertible into fermentable sugars, resulting in efficient ethanol fermentation and potentially higher ethanol yields per acre.
FUTURE OF ETHANOL AS A BLEND ENHANCER TO GASOLINE
Looking ahead, ethanol blending in U.S. gasoline is anticipated to increase, driven by government policies like the Renewable Fuel Standard (RFS), evolving market trends, environmental considerations, and technological advancements. The RFS, administered by the EPA, mandates increasing volumes of ethanol blending to lower greenhouse gas emissions and reduce reliance on imported oil. While E10 (10% ethanol, 90% gasoline) remains the most common blend, there is growing momentum for higher blends such as E15 and E85 as retail infrastructure expands.
Several factors support this trend:
-Renewable Fuel Standard (RFS): This federal mandate sets increasing annual targets for renewable fuel blending, including specific volumes for ethanol.
-State-Level Initiatives: Many states, particularly in the Midwest, are advocating for year-round availability of higher ethanol blends like E15.
-Low Carbon Fuel Standards (LCFS): States with LCFS programs incentivize the use of low-carbon fuels such as ethanol to decrease the carbon intensity of transportation fuels, with more states considering similar legislation.
BENCHMARK ETHANOL OUTLOOK
From Benchmark's perspective, we foresee continued growth in ethanol blending, particularly with E15 and E85, driven by supportive policies, environmental concerns, and market dynamics. Ethanol is poised to remain a vital component of the U.S. transportation fuel mix. While competition from other alternative fuels like electric vehicles and hydrogen exists, hybrid and flex-fuel vehicles will continue to support ethanol blending.
Another important aspect is the role of ethanol in addressing the issue of aromatics in gasoline. While aromatics are added to gasoline to boost octane and energy density, they pose significant health and environmental risks. Ethanol offers a cleaner-burning alternative that also increases octane. Consequently, ethanol is increasingly being used to replace aromatics in modern gasoline formulations, helping to meet both performance and environmental objectives for new high-compression engines.
Recent studies further highlight the benefits of ethanol blending, including life-cycle analyses from the U.S. DOE Argonne National Laboratory, EPA MOVES model studies demonstrating air quality improvements, SAE technical papers showing engine efficiency gains, and research from Harvard/MIT linking urban aromatic emissions to health problems.
In conclusion, bioethanol production in the U.S. represents a sustainable energy model with numerous benefits, from supporting the agricultural sector and livestock production to improving air quality and reducing our reliance on imported fossil fuels. We believe that continued support for and advancement in ethanol blending will play a crucial role in our nation's energy future.
