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Renewable Energy
The Economics of Ethanol
Renewable Energy
Alternative Energy Investment Shares
US Ethanol Production & Imports
Ethanol Reality Check
Ethanol
Ethanol - Basic FactsU.S. - Corn Brazil - Sugarcane
Energy balance* 1.3 8.3
Average cost $0.30 per liter $0.22 per liter
Production – 2006 4.6 billion liters
Exports – 2006 3 billion liters
Exports – 2025 200 billion liters
Tax credits $0.51 per gallon
Tariff (ad valorem)(secondary)(per liter)
2.5%$0.54 per gallon$0.1427 per liter
20%--
*ratio of energy output to energy input claimed by renewable fuels advocates
Ethanol – Ad Valorem Tariffs
Country
Ad Valorem Tariff*
Specific Tariff Equivalent
U.S. 2.5% 3.6 cents
Canada 16% 19 cents
Brazil 20% 25 cents
E.U. 54% 65 cents
Japan 113% 135 cents
*Source: Renewable Fuels Association, June 30, 2005; assumes a wholesale ethanol price of $1.20 per gallon.
Ethanol – Inputs per 1000 litersInput Quantity Kcal x
1000Cost ($)
Corn 2,690 kg 2,522 284.25
Transport 2,690 kg 322 21.40
Water 40,000 l 90 21.16
Stainless Steel 3 kg 12 10.60
Steel 4 kg 12 10.60
Cement 8 kg 8 10.60
Steam 2,546,000 kcal 2,546 21.16
Electricity 392 Kwh 1,011 27.44
95% => 99.5% 9 kcal/L 9 40.00
Sewage effluent 20 kg BOD 69 6.00
Total inputs 6,597 $453.21
Total output 5,130
Energy Balance
0.778
*Source: Pimental, D., and Tad Patzek, “Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower,” Natural Resources Research, March 2005
Ethanol vs. Other Renewables
Renewable Fuel
Energy Balance
Units Cost per 1000 units
Corn Ethanol 0.778 Liters $453.21
Switchgrass Ethanol
0.688 Liters $537.00
Wood cellulose Ethanol
0.636 Liters $575.00
Soybean biodiesel
0.758 Kg $1,212.16
Sunflower biodiesel
0.459 Kg $1,662.48*Source: Pimental, D., and Tad Patzek, “Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower,” Natural Resources Research, March 2005