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China-U.S. Potential Non-food Ethanol Exportation

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  • Yeboah, Osei-Agyeman
  • Ofori-Boadu, Victor
  • Li, Tongzhe

Abstract

To reduce national oil dependency, ethanol has been given a center stage of U.S. energy sources. The Renewable Fuel Standard (RFS) program was launched to increase the volume of renewable gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2012, among which 15 billion are corn-based ethanol, while U.S. corn-based ethanol can hardly achieve this level. There is a trend that indicates U.S. importing ethanol from other countries, so a bilateral trade system has been established between U.S. and Brazil since 2003. The annual import is 211 million gallons in 2008 (USDC, 2009). Nevertheless, this amount is far away from the target, and the worldwide food shortage called us to divert our attention from fuel to food. China, as the third largest ethanol producer, has extreme ethanol growth potential with low production costs and large sources of cassava, which is a non-food feedstock for ethanol. This paper uses Data Envelopment Analysis (DEA) to measure and compare the efficiency of ethanol production in China and Brazil. To estimate the extent output can be proportionally expanded without altering the input quantities employed in each country. The output orientated method has been developed with annual ethanol production from the inputs-- land for ethanol crops, agricultural labor force and capacity of ethanol production. The DEA results show that China has been more efficient in ethanol production than Brazil since the year 2007. This means China has comparative advantage over Brazil in producing ethanol, hence U.S. can import from China instead of Brazil in the future.

Suggested Citation

  • Yeboah, Osei-Agyeman & Ofori-Boadu, Victor & Li, Tongzhe, 2010. "China-U.S. Potential Non-food Ethanol Exportation," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56469, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea10:56469
    DOI: 10.22004/ag.econ.56469
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    References listed on IDEAS

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    1. Fengxia Dong, 2007. "Food Security and Biofuels Development: The Case of China," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 07-bp52, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Zhang, Cheng & Han, Weijian & Jing, Xuedong & Pu, Gengqiang & Wang, Chengtao, 2003. "Life cycle economic analysis of fuel ethanol derived from cassava in southwest China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 7(4), pages 353-366, August.
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    2. Frank, Björn & Abulaiti, Gulimire & Enkawa, Takao, 2014. "Regional differences in consumer preference structures within China," Journal of Retailing and Consumer Services, Elsevier, vol. 21(2), pages 203-210.

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