Ethanol imports: support for national production and benefit for consumers

The Vice Presidency of Economic and Regulatory Affairs of the Colombian Petroleum Association (ACP) presented an analysis of the benefits that free importation of ethanol represents for the country. 

• The ACP economic report analyzes the benefits of ethanol imports in terms of supply, air quality, and consumer prices.
• Imported ethanol complements national production, meeting 20% of the demand.
• The stable blend of 10% of ethanol in oxygenated gasoline represents a reduction of emissions of approximately 500,000 tons of CO2 per year.
• Consumers on the Atlantic Coast are the most benefited with a more competitive fuel price.

The analysis reflects that the free importation of ethanol since 2017 has served as a complement to national production. Furthermore, this new source of supply allowed the Ministry of Mines and Energy to set a stable blending percentage of 10% of ethanol in oxygenated gasoline since March 2018.

Although local supply has increased, on average, from 8 million gallons/month in 2017 to 11 million gallons/month in 2019, national production is still insufficient to meet the local market, so imports have served as a backup for market supply, meeting 20% of total demand.

Likewise, the analysis shows that without imports, the country would only have been able to manage blending percentages varying between 5% and 8% to the detriment of air quality, since ethanol, regardless of whether it is produced from sugarcane or corn, generates 70% less emissions of CO during combustion.₂compared to fossil fuel gasoline. For this reason, the 10% of ethanol content in oxygenated gasoline represents a reduction of emissions of approximately 500,000 tons of CO.₂per year.

Finally, the report highlights that the prices of imported ethanol are more competitive than national ethanol and these efficiencies have reflected a benefit for the final consumer, mainly on the Atlantic Coast where gasoline prices at service stations have been between 100 and 160 pesos per gallon below their reference price since the Government authorized imports.

“What the report shows is that it would not be convenient for the country to increase the cost of imports that represent only 20% of the ethanol consumed in the country and are the complement of insufficient local production to meet the blending percentage established by the Ministry of Mines and Energy; on the contrary, what is important is to review the price regulation of ethanol so that the Colombian consumer benefits from lower prices, better fuel quality, and environmental benefits,” concluded Alexandra Hernández, Vice President of Economic and Regulatory Affairs of the ACP.

[prefix_calltoaction title=»Economic report on ethanol imports supporting national production» button_text=»View report here» button_link=»https://acp.com.co/web2017/es/asustos/economicos/633-informe-economico-importaciones-de-etanol-respaldo-a-la-produccion-nacional/file» target=»blank» button_color=»#ffffff» button_background=»#f57305”]Since 2005, Colombia has begun using biofuels with the aim of reducing pollutant emissions from gasoline and ACPM through the use of bioethanol derived from sugarcane and biodiesel extracted from palm oil.[/prefix_calltoaction]