Sugar crops are a major feedstock for renewable bioethanol production for use as a transportation fuel. Other feedstocks include starch-rich crops such as corn, wheat and cassava. Because it is a clean, affordable and low-carbon biofuel, ethanol from sugar crops has emerged as a leading renewable transportation fuel. Ethanol for fuel can be used in two ways:

• Blended with gasoline at levels ranging from 5 to 27.5% to reduce petroleum use, boost octane ratings and cut tailpipe emissions.
• Pure ethanol – a fuel made up of 85 to 100% ethanol and which can be used in specially designed engines such as flexifuel vehicles.

There are several benefits often recognised from fuel ethanol use. These include

• Cleaner Air. Ethanol adds oxygen to gasoline which helps reduce air pollution and harmful emissions in tailpipe exhaust.
• Reduced Greenhouse Gas Emissions. Compared to gasoline, ethanol from sugar crops significantly cuts carbon dioxide emissions.
• Better Performance. Ethanol is a high-octane fuel that helps prevent engine knocking and generates more power in higher compression engines.
• Lower Petroleum Usage. Ethanol reduces global dependence on oil.

Brazil is the world leader in fuel ethanol production from sugarcane.

Despite continuing relatively low crude oil prices, most of global demand was still supported by legislative programs which guarantee consumption and sometimes price floors for producers. Even so, world fuel ethanol output fell by 1.7% from 100.3 bln litres in 2015 to 98.6 bln litres in 2016. The fall was driven by a 3.1 bln litre decline in Brazil. In the EU production fell with decommissioning of production capacity and declining consumption. In Asia, output grew on the back of higher volumes offered to the oil majors in India and growing production in Thailand. Brazil and the US together accounted for 86% of the world’s total fuel ethanol output in 2016, much the same as in the previous three years.

World Fuel Ethanol Production and Consumption (bln litres)

Global fuel ethanol consumption eased by 0.7%,falling from 98.5 bln litres in 2015 to 97.8 bln litres in 2016. Whilstconsumption in the US rose by 3.2% to 54.5 bln litres, offtake in Brazil fellby a considerable 9.0% to 26.2 bln litres. Rising inclusion obligations in theEU failed to result in additional offtake because gasoline use contracted. Gainsin demand in smaller consumers like Argentina, Colombia, Philippines andThailand were not sufficiently large to prevent a smaller global total in 2016.