Price Assessment

The price of Ethanol Fuel

  • What is Fuel Ethanol?
  • How do we assess fuel ethanol?
  • Evolution of Ethanol Market

What is Fuel Ethanol?

Fuel ethanol makes up for a growing fraction of overall fuel consumption in most countries. Investments have accelerated dramatically over the last decade, particularly in Brazil, the US and Europe, as governments in these regions introduced ambitious policies and mandatory targets for renewable fuels.

Exponential growth in ethanol consumption been driven by various aspects, including energy security, the need to address climate change issues and achieve lower gas emissions, as well as a push to create and sustain new jobs in agriculture and biotechnology.

Today, the US and Brazil together represent around 90% of the ethanol produced and consumed in the world. In the US, ethanol already makes up for around 10% of the gasoline market and consumption is set to more than double by 2022.

In Brazil, ethanol can be used as a standalone biofuel in over half of the country's light vehicle fleet thanks to the widespread introduction of flex-fuel cars, which can run on either gasoline or ethanol or any mixture of the both.

S&P Global Commodity Insights publishes several Platts fuel ethanol price benchmarks tailored to specific markets in the US, Brazil, Europe and Asia that are used by the industry to manage risk in this growing market and along the entire transport fuels chain.

Platts' fuel ethanol prices in the Chicago and Rotterdam marketplaces are also used by exchanges to settle derivatives contracts.

How do we assess fuel ethanol?

Platts' fuel ethanol price assessments by S&P Global Commodity Insights are based on robust and transparent market data that includes, but is not limited to, firm bids and offers, expressions of interest to trade and confirmed trades reported during the Market On Close process every day.

In Europe, fuel ethanol is assessed in euros per cubic meter and reflects the tradable and repeatable spot market value at 1630 London time. In the US, fuel ethanol is assessed in cents per gallon and reflects market value at 1330 Houston time.

S&P Global gathers price data from a wide segment of the market, including ethanol producers and distributors as well as agricultural traders, fuel blenders and refiners.

Data collected by S&P Global is published in full on our real time service Platts Biofuels Alert and is summarized in our daily publication Biofuelscan.

Evolution of Ethanol Market

Platts began assessing ethanol in Chicago in 2003 and in Rotterdam in 2007.

S&P Global Commodity Insights has since then expanded Platts suite of offerings to include 9 independent daily fuel ethanol physical price assessments in the US, 1 in Brazil, 4 in Northwest Europe and 6 in Asia.

S&P Global has also introduced ethanol price assessments for financially-settled ethanol swaps in the US and Europe as well as price indicators for US Renewable Identification Number credits for the current and next calendar years.

We continuously work with key industry stakeholders to ensure that our price assessments evolve in step with changing market conditions. S&P Global regularly holds methodology forums, webinars and one-to-one meetings to exchange views on the future of fuel ethanol.