Bloomberg report outlines 2013 issues to watch

By Erin Voegele | March 06, 2013

Bloomberg New Energy Finance has published a white paper outlining eight issues it has identified as being central to the biofuels industry in 2013. The report, titled “US biofuels in 2013: stories to watch,” addresses fuel mandates, cellulosic biofuel production, Brazil, the ethanol blend wall, renewable identification numbers, blending economics, the U.S. farm industry and politics.

Regarding cellulosic biofuels production, the report notes that Bloomberg has been tracking progress of plants that aim to produce next-generation biofuels on its own, and has even made site visits to some plant to confirm its assessments. Based on its assessment, Bloomberg said it expects 22 million gallons of cellulosic biofuels to be produced in 2103. The EPA’s official estimate came in at 14 million gallons.

“The EPA expects this production to come from two commissioned plants (developed by KiOR and INEOS Bio), whereas our forecast also includes output from three other plants that we expect to become operational this year (plants developed by POET/DSM, Abengoa, and Fiberight),” said Bloomberg in the white paper.

The report also addresses the impact of Brazilian ethanol production. Bloomberg’s assessment assumes Brazilian ethanol producers will export approximately 660 million gallons of ethanol to the U.S, 6 million gallons less than the EPA’s estimate. With the 10 percent ethanol blend wall effectively in place, the report notes that the role played by Brazilian ethanol imports to meet the RFS advanced biofuel volume requirements will depend on several factors, such as the use of banked RINs and blending economics. Whether or not last year’s drought continues into 2013 will also be a major factor impacting how the advanced biofuel volume pool is met.

A full copy of the whitepaper can be downloaded from the Bloomberg New Energy Finance website.