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Market penetration of ethanol

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  • Szulczyk, Kenneth R.
  • McCarl, Bruce A.
  • Cornforth, Gerald

Abstract

This research examines in detail the technology and economics of substituting ethanol for gasoline. This endeavor examines three issues. First, the benefits of ethanol/gasoline blends are examined, and then the technical problems of large-scale implementation of ethanol. Second, ethanol production possibilities are examined in detail from a variety of feedstocks and technologies. The feedstocks are the starch/sugar crops and crop residues, while the technologies are corn wet mill, dry grind, and lignocellulosic fermentation. Examining in detail the production possibilities allows the researchers to identity the extent of technological change, production costs, byproducts, and GHG emissions. Finally, a U.S. agricultural model, FASOMGHG, is updated which predicts the market penetration of ethanol given technological progress, variety of technologies and feedstocks, market interactions, energy prices, and GHG prices. FASOMGHG has several interesting results. First, gasoline prices have a small expansionary impact on the U.S. ethanol industry. Both agricultural producers' income and cost both increase with higher energy prices. If wholesale gasoline is $4 per gallon, the predicted ethanol market penetration attains 53% of U.S. gasoline consumption in 2030. Second, the corn wet mill remains an important industry for ethanol production, because this industry also produces corn oil, which could be converted to biodiesel. Third, GHG prices expand the ethanol industry. However, the GHG price expands the corn wet mill, but has an ambiguous impact on lignocellulosic ethanol. Feedstocks for lignocellulosic fermentation can also be burned with coal to generate electricity. Both industries are quite GHG efficient. Finally, U.S. government subsidies on biofuels have an expansionary impact on ethanol production, but may only increase market penetration by an additional 1% in 2030, which is approximately 6 billion gallons.

Suggested Citation

  • Szulczyk, Kenneth R. & McCarl, Bruce A. & Cornforth, Gerald, 2010. "Market penetration of ethanol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 394-403, January.
    • Handle: RePEc:eee:rensus:v:14:y:2010:i:1:p:394-403
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    3. Mofijur, M. & Masjuki, H.H. & Kalam, M.A. & Ashrafur Rahman, S.M. & Mahmudul, H.M., 2015. "Energy scenario and biofuel policies and targets in ASEAN countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 46(C), pages 51-61.
    4. Chen, Hongzhang & Fu, Xiaoguo, 2016. "Industrial technologies for bioethanol production from lignocellulosic biomass," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 468-478.
    5. Shafiei, Ehsan & Davidsdottir, Brynhildur & Leaver, Jonathan & Stefansson, Hlynur & Asgeirsson, Eyjolfur Ingi & Keith, David R., 2016. "Analysis of supply-push strategies governing the transition to biofuel vehicles in a market-oriented renewable energy system," Energy, Elsevier, vol. 94(C), pages 409-421.
    6. Laurini, Márcio Poletti, 2017. "The spatio-temporal dynamics of ethanol/gasoline price ratio in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1-12.
    7. Paolo Iodice & Massimo Cardone, 2021. "Ethanol/Gasoline Blends as Alternative Fuel in Last Generation Spark-Ignition Engines: A Review on CO and HC Engine Out Emissions," Energies, MDPI, vol. 14(13), pages 1-18, July.
    8. Masum, B.M. & Masjuki, H.H. & Kalam, M.A. & Rizwanul Fattah, I.M. & Palash, S.M. & Abedin, M.J., 2013. "Effect of ethanol–gasoline blend on NOx emission in SI engine," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 209-222.
    9. Szulczyk, Kenneth R. & Ziaei, Sayyed Mahdi & Zhang, Changyong, 2021. "Environmental ramifications and economic viability of bioethanol production in Malaysia," Renewable Energy, Elsevier, vol. 172(C), pages 780-788.

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