US taking the lead in global biofuel production

The US biofuel industry is rapidly growing and leading the global biofuel industry due to government support, coming up of new projects and plants, and rising domestic demand.

US Biofuel Market Analysis, a new research report from RNCOS, anticipates the US biofuel industry, particularly ethanol production, to lead the world biofuel production during 2008-2017.

As per the report, the US has emerged as the world's largest biofuel industry, with its ethanol production soaring to 4.9 billion gallons in 2006, an increased of around 1 billion gallons from the production level in 2005, and contributed 36% of the total global ethanol production. While the growth in ethanol production was substantially high in 2006 from 2005, the industry still continues to enhance its production capacity.

Seeing this remarkable performance of the US biofuel industry, a senior research analyst at RNCOS comments that it will not be wrong to say that the global ethanol industry is centred around the US.

Moreover, the US is expected to lead the global ethanol production in future. The main reasons behind this projection, says the analyst, are the long-term government intervention (Renewable Fuels Standard policy) and setting up of more ethanol plants. Besides, continuous rise in domestic ethanol demand will encourage domestic producers to keep adding to the production volume in coming years.

The RNCOS research says that this radical rise in ethanol production in the US has virtually affected every aspect of field crops sector - from domestic demand and exports to prices, acreage allocation among crops, and even the livestock sector. Under such commodity market effects, government payments, farm income and food prices have changed significantly.