Global biofuels growth set to slow on weak Brazil prospects: IEA
London (Platts)--13Dec2011/828 am EST/1328 GMT
The pace of global biofuels production growth will be slower than
previously forecast over the next five years due to weaker prospects for
Brazilian ethanol and as the US market becomes saturated, the International
Energy Agency said Tuesday.
Updating medium-term forecasts made in June, the IEA said it sees global
biofuels growth from 2010 to 2016 at just 400,000 b/d, versus 500,000 b/d
previously. It now expects biofuels supply to reach 2.22 million b/d in 2016,
up from 1.822 million b/d in 2010.
Brazilian ethanol production in 2011 is now expected to decline by
75,000 b/d to 375,000 b/d due to a poor sugar cane harvest and high sugar
prices, the IEA said.
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Over the next five years, the IEA has reduced its outlook on average for
Brazilian ethanol output by an average 100,000 b/d, reaching 530,000 b/d in
"Challenging production economics and underinvestment in cane production
and ethanol distillery capacity looks likely to persist over the medium
term," the IEA said in its latest monthly report.
In the US, ethanol production growth is likely to slow over the
medium-term, the IEA said, with the year-end expiry of a 45 cent/gallon
blenders tax credit set to slow distillery investment amid increasing
saturation in the US market.
The IEA said US ethanol output is still likely to reach 980,000 b/d in
2016, in line with the Renewable Fuels Standard, but revised down its outlook
by an average 20,000 b/d over the 2012-2014 period.
US biodiesel production was also revised down, by 10,000 b/d on average
from 2012-2016, the IEA said.
In Europe, The IEA revised down its biofuels production estimate by
10,000 b/d for 2010-2016, largely due to lower biodiesel output.
--Robert Perkins, email@example.com