239
represents about one fifth of Brazil’s total production and 6.2% of expected global
production of 155 billion liters. Incidentally, the USA is expected to be by far the
largest importer, and the expected amount of 9.5 billion liters is nearly equal to
Brazil’s entire export amount. The EU is expected to import another 2.4 billion liters
(Table 14.7).
14.5.4 Possibility of Large-Scale Trade
The fundamental limitations of large-scale trade are illustrated by the OECD/FAO
projections (OECD/FAO 2011, 92). Out of the total global production of 91.6 billion liters of ethanol in 2008–2010, only about 3.8 billion liters were exported, and
of this amount, about 3.3 billion liters were imported by the USA and the EU, leaving little available for other areas. In 2020, global ethanol production is expected to
grow significantly to about 155 billion liters, but only 11 billion liters are expected
to be exported, mostly by Brazil (9.7 billion liters) and mostly to the USA (9.5 billion liters). In Asia, the largest ethanol exporters in 2020 are expected to be China
(1,200 million liters), Thailand (509 million liters), and the Philippines (153 million
liters), while the major importers are expected to be Japan (769 million liters), India
(614 million liters), and Malaysia (11 million liters) (OECD/FAO 2011, 92) (See
Table 14.7).
For biodiesel, the scale of expected trade is even smaller. Total global biodiesel
production in 2008–2010 of 17.6 billion liters was dominated by the EU (9.2 billion
liters), the USA (1.7 billion liters), Argentina (1.6 billion liters), and Brazil (1.6 billion liters). Total global exports accounted for only 2.5% of total production; the
main exporters were Argentina (1329 million liters), the USA (748 million liters),
and Malaysia (559 million liters), with the EU being the largest importer (1.6 billion
liters) (OECD/FAO 2011, 93).
In sum, there is no clear potential source of large-scale exports that would be
needed if all Asian countries were to simultaneously increase their blending mandates significantly beyond domestic production capabilities. The world cannot rely
on Brazil alone. If a sufficient number of countries in East Asia or elsewhere were
to significantly increase biofuel blending mandates, it would likely cause a global
biofuel supply shortage. Globally there would be pressure to shift more land to fuel
crops and increase the risk of non-sustainable production practices.
It is worth mentioning the various barriers to biofuel trade (see Table 14.8). One
of the main determinants of biofuel trade is the relative prices of inputs such as
feedstocks and competing fossil fuels. These relative prices fluctuate considerably
and contribute to the volatile nature of biofuel trade. Trade protection tends to be
high, as countries want to promote their domestic industries. Biofuels also suffer
from high transportation and insurance costs. All of these factors tend to discourage
biofuel trade.
Generally, trade is considered to increase efficiency. However, this may not necessarily always be the case for biofuels, if the trade is motivated by strong blending
14 A Regional Perspective on Biofuels in Asia
represents about one fifth of Brazil’s total production and 6.2% of expected global
production of 155 billion liters. Incidentally, the USA is expected to be by far the
largest importer, and the expected amount of 9.5 billion liters is nearly equal to
Brazil’s entire export amount. The EU is expected to import another 2.4 billion liters
(Table 14.7).
14.5.4 Possibility of Large-Scale Trade
The fundamental limitations of large-scale trade are illustrated by the OECD/FAO
projections (OECD/FAO 2011, 92). Out of the total global production of 91.6 billion liters of ethanol in 2008–2010, only about 3.8 billion liters were exported, and
of this amount, about 3.3 billion liters were imported by the USA and the EU, leaving little available for other areas. In 2020, global ethanol production is expected to
grow significantly to about 155 billion liters, but only 11 billion liters are expected
to be exported, mostly by Brazil (9.7 billion liters) and mostly to the USA (9.5 billion liters). In Asia, the largest ethanol exporters in 2020 are expected to be China
(1,200 million liters), Thailand (509 million liters), and the Philippines (153 million
liters), while the major importers are expected to be Japan (769 million liters), India
(614 million liters), and Malaysia (11 million liters) (OECD/FAO 2011, 92) (See
Table 14.7).
For biodiesel, the scale of expected trade is even smaller. Total global biodiesel
production in 2008–2010 of 17.6 billion liters was dominated by the EU (9.2 billion
liters), the USA (1.7 billion liters), Argentina (1.6 billion liters), and Brazil (1.6 billion liters). Total global exports accounted for only 2.5% of total production; the
main exporters were Argentina (1329 million liters), the USA (748 million liters),
and Malaysia (559 million liters), with the EU being the largest importer (1.6 billion
liters) (OECD/FAO 2011, 93).
In sum, there is no clear potential source of large-scale exports that would be
needed if all Asian countries were to simultaneously increase their blending mandates significantly beyond domestic production capabilities. The world cannot rely
on Brazil alone. If a sufficient number of countries in East Asia or elsewhere were
to significantly increase biofuel blending mandates, it would likely cause a global
biofuel supply shortage. Globally there would be pressure to shift more land to fuel
crops and increase the risk of non-sustainable production practices.
It is worth mentioning the various barriers to biofuel trade (see Table 14.8). One
of the main determinants of biofuel trade is the relative prices of inputs such as
feedstocks and competing fossil fuels. These relative prices fluctuate considerably
and contribute to the volatile nature of biofuel trade. Trade protection tends to be
high, as countries want to promote their domestic industries. Biofuels also suffer
from high transportation and insurance costs. All of these factors tend to discourage
biofuel trade.
Generally, trade is considered to increase efficiency. However, this may not necessarily always be the case for biofuels, if the trade is motivated by strong blending
14 A Regional Perspective on Biofuels in Asia