Report discusses future of ethanol market in Spain

A report recently filed with the USDA Foreign Agricultural Service’s Global Information Network provides insight into the future ethanol market in Spain following the 2016 expiration of the ethanol-specific biofuel blending target.

The report indicates that ethanol consumption in Spain was driven solely by mandates since 2013. The ethanol-specific biofuel target was phased out last year. Since that time, ethanol consumption has been market driven, depending on price competitiveness and the need for petrol companies to observe volumetric blending limits.

Spain consumes far more diesel than gasoline. The diesel-gasoline average ratio is approximately 3:1, compared to 2:1 in the entire European Union. According to the report, some in the biofuel industry have expressed concern that phase-out of the ethanol-specific target may result in blenders choosing to meet mandates with biodiesel or HVO.  

The report indicates that poor margins forced Abengoa’s Spanish in-land plant to halt production in March 2016, which resulted in decreased domestic production. Lower ethanol production levels are also expected this year due to continuing tight margins. The report also notes, however, that lower domestic ethanol production is opening up new opportunities for dried distillers grains imports.

According to the report, Spain currently has four ethanol plants, with a combined production of 494 million liters (130.5 million gallons). The facilities operated at 100 percent capacity in 2015, falling to 66 percent last year. This year, the plants are expected to operate at 57 percent capacity.

Corn is the primary ethanol feedstock in Spain, with 97 percent of production expected to be corn-based this year, along with 3 percent wine alcohol. Last year, 85 percent of ethanol production in Spain was from corn, with 12 percent from wheat and 3 percent from wine alcohol. Barley was also used as an ethanol feedstock in 2009, 2010 and 2011.

Spain is expected to consume 265,000 cubic meters of ethanol this year, up from 253,000 cubic meters last year. Gasoline consumption is expected to reach 6.45 million cubic meters this year, up from 6.38 million cubic meters last year. Spain imported 25,000 cubic meters of ethanol last year, and exported 99,000 cubic meters.