USDA – Global Demand for Fuel Ethanol, 2023

The United States has experienced significant growth in the consumption of ethanol as a transportation fuel, mainly derived from corn. This has had a significant impact on the country's agricultural sector. The continuation of the Renewable Fuel Standard program, along with an increase in global vehicle numbers and demand for high-octane fuels, could sustain the global demand for ethanol. However, advancements in fuel efficiency and the rise of alternative drivetrains like electric vehicles may slow down or even reduce ethanol consumption in the US. This report focuses on the current fuel ethanol markets in the US and internationally, and explores potential market opportunities for US ethanol through projections of future fuel ethanol demand in international markets. The study also examines the impact of ethanol policies in export market countries on the overall demand for US corn-based ethanol. The study found that US gasoline consumption is expected to see changes ranging from a 3.3 percent decrease to a 5.3 percent increase from 2021 to 2030. Ethanol consumption in motor gasoline and E85 is projected to increase between 1.4 percent and 10.4 percent above 2021 levels, depending on US economic growth. The projected increase in ethanol consumption is attributed in part to the assumption that the Renewable Fuel Standard will increase the total consumption of renewable fuels in the US. Overall, the total global demand for gasoline is expected to stagnate, making changes in blend rates the main factor influencing future fuel ethanol demand. The study also highlights the impact of non-US countries meeting their blend targets on projected demand for fuel ethanol. Under the "Historical Blends" scenario, international fuel ethanol consumption is projected to increase between 5.7 percent and 7.4 percent by 2030, driven primarily by increased demand in India, Brazil, and China. Under the "Targeted Blends" scenario, international fuel ethanol consumption is projected to increase by 173 percent to 180 percent by 2030, with the largest increases expected in Canada, China, and Brazil. In summary, the report provides insights into the current and future market trends for fuel ethanol, emphasizing the role of blend rates domestically and internationally in determining the demand for ethanol.