This post is one in a series of feature stories on trends that shape advanced energy markets in the U.S. and around the world. It is drawn from Advanced Energy Now 2017 Market Report, which was prepared for AEE by Navigant Research.
Global biofuel markets are driven by a unique elixir of national annually adjusted production targets, oil prices, and desire for energy independence. Biofuels have endured more than a decade of scrutiny for everything ranging from subsidies to environmentalist concerns to possible impacts on food prices. Despite all of this, biofuels have proven a resilient global market led by the United States and Brazil. Revenue from ethanol production dropped dramatically in 2016 – down to $37 billion globally, and to $20.6 billion in the United States – as ethanol prices have fallen in competition with low-priced oil (see figure below). In both worldwide and U.S. markets, ethanol revenue hit its lowest point in the six years Navigant Research has been tracking the industry. In addition to the low oil prices, and resulting low gasoline prices, low corn prices contributed to the decline in ethanol pricing. Corn prices also fell to the lowest in a decade in October 2016, right after the U.S. corn harvest ended.