The United Kingdom will increase the share of ethanol in its motor fuel to 10%, up from a current 5%, with the country saying the move is aimed at reducing the impact of driving in the country. The UK Department of Transport said the change could reduce carbon dioxide emissions by 750,000 metric tons per year, the equivalent of taking 350,000 cars off the road.
U.S. biofuel groups welcomed the move, hoping that it translates into additional demand for U.S. ethanol as the UK biofuel infrastructure needs to be increased to meet the rising demand. The U.S. exported around 600,000 barrels of ethanol to the UK in 2020, down about 55,000 barrels from 2019 levels as COVID restrictions limited travel and gasoline demand in the UK.
Data from the UK indicated that overall ethanol consumption was at 4.7 million barrels in 2019.
The hoped-for rise in U.S. ethanol exports to the UK would be a welcome demand development, but may not be a sustained market given an expected push to bolster the biofuel infrastructure in the UK.