New Study Showcases Ethanol’s Advantage In Indonesia, Mexico, Nigeria

“The Fuel Ethanol Cost-Benefit Analysis Study on Indonesia, Mexico and Nigeria provides a baseline model to measure ethanol’s economic benefits. It quantifies the potential savings of the gasoline-ethanol blend when transitioning from E0,” said Stella Qian, USGC senior manager of global ethanol market development.

The study focused on measuring the financial benefits of expanding the use of ethanol from no ethanol usage (E0) to ethanol blends of five percent (E5), 10 percent (E10), 15 percent (E15) and 20 percent (E20) in Indonesia, Mexico and Nigeria. The study also discussed the strategic benefits of ethanol blending from the perspectives of energy transition and energy security.

Ethanol is the only fuel that fits into the categories of both oxygenates and biofuels, allowing it to not only assist in the combustion process and reduce carbon monoxide emissions, but to also reduce greenhouse gas (GHG) emissions. Ethanol blending is also more cost-effective, reducing the cost of gasoline, while the blending of other oxygenates, including methyl tert-butyl ether (MTBE), can increase cost.

Other highlights of the study showcased how the high octane of ethanol allows blending with less costly and lower-efficiency subgrade gasoline to achieve the desired grade octane; and the dilution benefits of ethanol could reduce the level of refinery capital expenditures necessary to achieve increasingly stringent gasoline specifications, among others.

“The results from the study also prove that economic value increases with higher ethanol blending. We hope this study will help our customers further understand both the economic and strategic benefits of ethanol,” Qian said.

Shortly after its release, the study was presented at a virtual roundtable discussion hosted by the Atlantic Council Global Energy Center, a renowned Washington, D.C.-based think tank. The discussion brought together key stakeholders to discuss the economic benefits of blended fuels and opportunities to strengthen the biofuels supply chains in Africa. The Council’s study was presented to highlight the Nigeria-focused results.

“Having the study showcased at an event organized by a reputable organization in the energy field, such as Atlantic Council Global Energy Center, offered a great opportunity to further the discussion of biofuel policy development in Africa. The study findings reveal that ethanol presents a sustainable investment opportunity for African countries working to decarbonize while simultaneously accelerating economic growth,” Qian said.

Moving forward, the Council plans to disseminate the study to key stakeholders in Indonesia, Mexico and Nigeria.

View the studies and study summary.