The Biofuel Industry and Global Trade Nexus

Over the last two decades, global biofuels production has grown significantly. While several types of renewable biofuels exist, the significant share consists of ethanol and biodiesel. The biofuels trade is mainly driven by the adoption of greenhouse gas (GHG) emissions reduction policies by the developed countries, including the U.S., E.U., and Brazil. Among several renewable fuels, biofuels are considered to have diverse environmental, social, and economic impacts. Therefore, the biofuels industry in general needs to consider the importance of these factors while evaluating the future perspective of biorefineries. On a global scale, the current and future issues, including energy security, food security, rural development, agriculture and industrial policy, trade, and GHG emissions reduction related to biofuels, need to be considered. Policies always drive biofuel production, use, and trade. Given the importance of policy within the biofuel industry, this chapter summarizes country-specific policy objectives, instruments, and priorities—case studies of major biofuels producing countries are presented as a critical element. We find that while ethanol trade and production have faced more targeted policies and tariffs than biodiesel, the future of biodiesel trade will depend on how the importing countries implement the sustainability requirements. Domestic ethanol use has been saturated in the USA as it hits the gasoline blending capacity. Thus, in the future the U.S. ethanol demand will depend on export market, and how the foreign countries adopt their domestic biofuels use mandate. Competition from other global ethanol producing countries, particularly Brazil can not be ignored too.