In 2005, the U.S. Congress passed the first Renewable Fuels Standard (RFS) aimed at replacing oil imports with renewable fuels. In 2007, the Congress expanded the RFS, making it much more comprehensive with clear goals to accelerate the development of new renewable fuel technologies. The expanded RFS, known as RFS2, requires an increasing amount of renewable fuel use annually through 2022, when total consumption must be at least 36 billion gallons.

While the initial requirements (up to 15 billion gallons per year) are satisfied by corn-based ethanol, called first generation biofuels, the RFS2 requires increasing levels of next generation renewable fuels, such as those made from cellulosic feedstocks and from sugarcane. Cellulosic ethanol and biomass-based diesel make up 16 billion gallons of the 36 billion gallon RFS2 and sugarcane-based ethanol meets the requirements for an additional 5 billion gallons.

Thus, the RFS2 has created a potential market in the U.S. for Brazilian-produced sugarcane ethanol, much of which can be dehydrated in Caribbean facilities such as those of EthylChem. In addition to the RFS2, the State of California has begun its own quest for better air and less dependence on fossil fuels for its transportation needs. California has implemented its Low Carbon Fuel Standard (LCFS) whereby transportation fuels sold in the state must have an increasingly lower carbon footprint, or “carbon intensity,” (CI) than California’s gasoline in 2005.

The California requirements are even more stringent than the RFS2, such that ethanol manufactured in most U.S. facilities cannot meet the standards. However, ethanol produced from sugarcane easily qualifies, thus creating even greater opportunities for CBI ethanol dehydration facilities like EthylChem’s. Another U.S. regulation, called the Caribbean Basin Initiative (CBI), however, permits only 7% of U.S. consumed ethanol to enter the country duty free from specifically designated Caribbean facilities.

CBI ethanol imports above this level would be subject to a tariff and compete directly with ethanol imported directly from Brazil. As U.S. consumption grows though, so does the 7% volume, such that it already exceeds the current CBI capacity. This one product currently provides millions of dollars each year injected into the Caribbean economy in hundreds of direct jobs and support services for the nine facilities located in five Caricom countries. These facilities also support hundreds of indirect jobs and support activities in the region. This in turn supports over US$250 million invested in Caricom countries, primarily by both local and U.S. investors.

Throughout the world, ethanol is providing thousands of both direct and indirect jobs and adding billions of dollars to local and national governments. Ethanol continues to reduce the world’s dependence on fossil fuels, especially from nations controlled by “less than friendly” governments. As the U.S. Renewable Fuels Association stated, “There is no fuel available at scale today that can match ethanol’s ability to improve overall environmental quality compared to gasoline.

From its biodegradable nature to reductions in greenhouse gas emissions and tailpipe pollution, ethanol provides a tool to address environmental concerns without requiring an entirely new way for goods and people to get from one place to another.” Ethanol is universally recognized as the only “low carbon” alternative to gasoline available in adequate and growing supplies today. All credible comparisons to gasoline demonstrate a clear reduction (40-60%) in greenhouse gas (GHG) emissions with the use of ethanol versus petroleum-derived gasoline. In the U.S. alone, use of ethanol has removed tons of GHG emissions from motor vehicles, the equivalent of removing over 3 million vehicles from the road.

In Brazil, ethanol provides about 50% of the country’s liquid transportation needs either as hydrous ethanol (95% ethanol/5% water) or blended with gasoline at a ratio of 20-25% ethanol/75-80% gasoline. The European Union continues to expand its use of ethanol to reduce its GHG with specific volume percentage requirements growing over the next decade. Several countries use 10% ethanol already with others at 5% levels. Canada and many countries in the Far East also continue to expand mandates for ethanol usage either locally or nationally. No other transportation fuel has grown so rapidly or offers so much potential for reducing GHG than ethanol. For decades, fossil fuels transported the world; the future belongs to renewable fuels like ethanol.