News last update:6 Aug 2012

GFAI holds ethanol economics seminar

Five factors determine the future viability of the dry mill ethanol industry, said Dr. Robert Hauser, at a recently held ethanol economics seminar in Illinois, USA.

Hauser, head of the Department of Agricultural and Consumer Economics at the University of Illinois, Urbana-Champaign UIUC) along with fellow UIUC professsor Darrel Good, spoke to a group of 50 members of the Grain and Feed Association of Illinois (GFAI) attending the seminar on August 13.

Five factors
Hauser said there are five factors that determine the future viability of the dry mill ethanol industry:
• Subsidies. The level of federal subsidies will be a significant factor in the level of ethanol production.
• RFS. The renewable fuels standard must be maintained.
• Blends. Fuel blends could play a significant role if increased above 10% ethanol.
• Tariffs. Maintain existing policies that provide U.S. producers an even laying field.
• Cellulosic ethanol. The industry is still waiting for breakthroughs in this area.

Hauser said little is known about the economics of producing ethanol from cellulosic material because it hasn't been tried on a commercial scale as yet. He said that early studies indicate that ethanol can be produced for 60 to 90 cents more per gallon when using miscanthus instead of corn.

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