EIA Report Shows US Ethanol Capacity Moved Southwards in 2022

Texas, USA-Ethanol demand in the North American market has elevated as the product requirement increased as the Covid-19 cases declined. As per the statistics issued by the US Ethanol Information Administration (EIA), the total production of Ethanol in the country is collectively done by 13 states, primarily located in the Midwest region geographical-wise. According to the data published in the official statement of EIA, 275 Ethanol production units produced 21 billion gallons of Ethanol in the US until January 2022. This data has decreased by 0.2 billion gallons this year compared to the capacity produced in January 2021. The prices of Ethanol have slipped by 9% in the US market on the back of reduced production quantity by major Ethanol producers.

The US government policies, such as the Inflation Reduction Act, provide relief to health care sectors and make sure that the drugs are easily available to the public. The wealthy Ethanol industrialist tries to escape the government by not paying taxes. Also, this new act focuses on improving climate change and the destruction caused by the pollutants discharged during the manufacturing procedure of Ethanol and other chemicals in the environment. Other facets governing the US market prices of Ethanol in the US market are the fuel demand from downstream sectors, public transportation, and the cost of Ethanol production.

Petroleum Administration for Defense District (PADD) consists of the districts producing Ethanol in the states. According to the official data, West Coast, Alaska, and Hawaii produce the least amount of Ethanol. The PADD region consists of 9 ethanol-producing units, collectively producing 199 MMgy of Ethanol yearly. As per ChemAnalyst, the market prices of Ethanol may elevate in the US market as the demand for the product may surpass the production proportionally, impacting the prices of Ethanol in the domestic market.