Net exports are calculated as the difference between exports and imports. The 2016 calendar year concluded with U.S. net exports of 838 million gal. -- the second-highest level ever, exceeded only in 2011. U.S. ethanol shipments exceeded 1 billion gal. in 2016, and incoming shipments totaled nearly 215 million gal.
According to USGC, Brazil was, for a majority of the 2000s, the largest net exporter of ethanol in the world, and the U.S. was among the world’s largest net importers. The U.S. became a net exporter of ethanol in 2010, exporting more than 410 million gal. and importing more than 131 million gal. that year.
By 2011, U.S. exports rose so sharply (more than 1.2 billion gal.) that the U.S. seized the top world net exporter of ethanol slot from Brazil. However, USGC said the widespread drought in the 2012-13 marketing year decreased the competitiveness of U.S. ethanol in global markets and cut global exports. In 2014, U.S. net ethanol exports rebounded, exceeding Brazil’s net exports by 166 million gal.
“Today, the U.S. is both a major ethanol exporter and one of the world’s largest importers,” USGC noted. In fact, roughly 85% of U.S. ethanol imports originate from Brazil, with most imports entering the U.S. through the Gulf of Mexico ports (largely Houston/Galveston, Texas) and West Coast ports (California).
Brazilian ethanol imported into Houston-Galveston is processed into ETBE (a fuel oxygenate) and then is re-exported to Japan to meet that country’s strict greenhouse gas criteria, which favors Brazilian ethanol over U.S. ethanol. This is one issue USGC and its partners are working to address as part of their ethanol market development efforts in Japan.
“The importation of Brazilian ethanol into California is driven by the state’s Low Carbon Fuel Standard, which favors sugarcane ethanol over Midwest corn ethanol based on California’s calculation of carbon intensity,” USGC explained. “This year, however, the United States has imported very little Brazilian ethanol due to the much lower price for U.S. corn ethanol relative to Brazilian ethanol.”
Conversely, USGC said U.S. ethanol exports to Brazil have increased substantially due to the price disparity relative to competitively priced corn-based ethanol.
“The relatively high price of sugar compared to ethanol has redirected Brazilian sugarcane into sugar production rather than ethanol. As a result, Brazil has increased its imports of price-competitive U.S. ethanol to meet growing fuel ethanol demand -- a trend USGC expects to continue through much of 2017,” the council said.