Ethanol 2020 Export Highlights

Top 10 Export Markets for U.S. Ethanol

(values in million USD)
Commodity  2016 2017 2018 2019 2020 2019-2020 % Change 2016-2020 Average
Canada 593 621 590 573 594 4%            594
Brazil 458 736 761 493 317 -36%            553
India 176 281 258 298 312 4%            265
EU27+UK 21 101 167 185 288 56%            152
South Korea 71 91 134 196 172 -12%            133
Colombia 10 56 76 116 121 4%              76
Mexico 58 56 51 52 119 128%              67
Peru 76 72 69 79 69 -13%              73
Philippines 103 101 125 94 67 -29%              98
Nigeria 34 45 33 33 58 74%              41
All Others 442 251 400 229 217 -5%            308
Total Exported 2,042 2,412 2,663 2,349 2,333 -1%         2,360

Source: U.S. Census Bureau Trade Data - BICO HS-10

Highlights

In 2020, U.S. ethanol exports totaled 1.3 billion gallons valued at $2.3 billion. This volume was 9 percent lower than 2019 due to reduced demand for fuel use, and 20 percent below the record 1.7 billion gallons shipped in 2018. Year-over-year value fell only 1 percent due to higher prices for fuel ethanol and increased shipments of higher-value, medical-grade ethanol.

U.S. fuel ethanol to Brazil saw the largest absolute decline in 2020, due to Brazil’s COVID-19 impacted fuel market and a 40-percent depreciation in Brazil’s currency. Brazil’s 20 percent import duty continued to impact the market. Export volumes were also lower than expected to other fuel markets in 2020, most notably the Philippines, Colombia, and Peru. Sales to Canada held mostly steady as U.S. suppliers backfilled Canada’s increased sales to Europe. By contrast, U.S. fuel ethanol sales to mainland China rose from zero to 21.2 million gallons. Sales to Hong Kong added 10.5 million gallons.

Differing from fuel ethanol markets and driven by demand for hand sanitizer, U.S. exports of other industrial and consumer ethanol rose, most notably to Mexico (up $67 million) and Nigeria (up $25 million). For the remaining top 10 markets, ethanol sales rose to the EU27+UK on strong demand for hand sanitizer and high local fuel ethanol prices, industrial ethanol sales to India inched higher to a record $312 million, and industrial ethanol sales to South Korea dropped as China covered South Korea’s demand for medical-grade product.

Drivers

  • Regulations, limited infrastructure, and oil company resistance limit growth of ethanol blends above 10 percent in the U.S. market, thus raising the importance of export growth. Limited growth for higher blends and mostly static fuel demand also limit U.S. domestic market expansion.
  • U.S. ethanol exports are mostly impacted by fuel markets since most is used as transport fuel. Sales are also impacted by markets for ethanol used as an industrial chemical and in consumer products, including hand sanitizers, with 20-25 percent of U.S. exports typically used for these non-fuel applications.
  • In 2020, COVID-19 and reduced mobility severely impacted global gasoline markets and thus fuel ethanol demand. The impact on U.S. ethanol exports was sharp and swift with lower sales of fuel ethanol from March onward supporting a rise in the non-fuel portion of U.S. exports to an unprecedented 40 percent.
  • Canada and Brazil remain the top markets for U.S. ethanol. Canada’s fuel ethanol imports are stable with no trade restrictions on U.S. suppliers who consistently cover about 40 percent of Canada’s consumption. U.S. suppliers also cover virtually all of Brazil’s fuel ethanol imports, but trade is impacted by several factors including sugar and oil prices and a volatile exchange rate.
  • The United States has free trade agreements with four of the top 10 ethanol export destinations, which help reduce barriers to U.S. ethanol.

Global Ethanol Exports

Stacked bar graph showing global ethanol exports

Looking Ahead

As the spread of COVID-19 slows and vaccines are distributed in 2021, global demand for gasoline and ethanol will start recovering. Beyond 2021, with the world emerging from the pandemic, gasoline and ethanol markets will further recover, although the pace and degree will vary by country.

Pre-pandemic, the United States supplied half of the world’s ethanol exports, but its market share dropped to an estimated 43 percent in 2020 as fuel demand collapsed and some countries (notably China and Brazil) captured more of the trade in medical-grade product. Markets should mostly rebalance in the coming 1-2 years, permitting U.S. market share to rise as the pandemic recedes and fuel ethanol reasserts its dominance in trade.

Demand for mobility grows as population and incomes grow, but ethanol-blended gasoline is only one of several means to meeting increased demand for mobility while lowering greenhouse gas emissions. Increased mass transit, improved fuel efficiency, lifestyle changes including telework, and alternative drive trains like electric motors are all factors affecting transport demand, with which ethanol must compete. Antidumping and countervailing duties placed by China, Brazil, the EU27+UK, and others, and licensing restrictions or import bans imposed by Argentina, Thailand, India, and the Philippines, all limit (or threaten to limit) the United States’ ability to export fuel ethanol, while markets for ethanol used as an industrial chemical and in consumer products are relatively barrier-free.

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