Biofuel production in the USA will see slow growth through to 2050, according to a report from the US Energy Information Administration’s (EIA) Annual Energy Outlook 2020.
This growth would be driven primarily by economic and policy factors, according to the AEO 2020 report, which outlines three scenarios based on current regulations, high petroleum oil prices and low petroleum oil prices.
In the reference case, which reflected current laws and regulations, biofuels production in 2050 was projected to be 18% higher than 2019 levels. However, in a High Oil price case with higher global crude oil prices, biofuels such as fuel ethanol and biodiesel would be increasingly consumed as substitutes for petroleum products, resulting in a 55% growth in biofuels production in 2050.
US biofuels consumption totalled 1.09M barrels/day in 2019 and accounted for 7.3% of total motor gasoline, distillate and jet fuel consumption. Fuel ethanol is the largest component of US biofuels.
In the AEO2020’s reference case, ethanol production slowly decreased between 2019 and 2030 and then increased towards the end of the projection period largely reflecting the reference case projection for motor gasoline production.
The projected decline in domestic ethanol-blended gasoline consumption would be offset by increasing US ethanol exports. From 2019 to the end of the production period, domestic production of biodiesel and other biofuels increased by 30,000 barrels/day and 80,000 barrels/day respectively.
In the AE2020 reference case, biofuels represented a relatively small but growing share of the domestic gasoline, distillate and jet fuel market. The percentage of biofuels blended into gasoline, diesel and jet fuel was expected to increase from 7.3% in 2019 to a high of 9% in 2040 before slightly declining through to 2050.
The High Oil Price case assumed higher levels of foreign demand for US-produced biofuels than in the reference case.
In a Low Oil Price case, domestic biofuel consumption remained similar to the reference case. EIA projected low oil prices contributing to a decrease in domestic consumption of biomass diesel (biodiesel and renewable diesel).
Total biofuel consumption increased slightly as low gasoline prices resulted in greater amounts of domestically-produced ethanol being blended into motor gasoline.