Ethanol Prices Research Articles

Scale sensitivity of ethanol production via consolidated bioprocessing with consideration of feedstock cost

AbstractWe examine feedstock cost and minimum selling price for ethanol production from corn stover as a function of scale, stover yield, participation rate, and price incentives for two conversion technologies: a conventional base case featuring thermochemical pretreatment with added cellulase, and an advanced case featuring consolidated bioprocessing with cotreatment (C‐CBP). Delivered feedstock cost ranged from $85 Mg−1 at small (10 million gallons year−1 or ~38 million L year−1) scale with high yield and participation rates to $124 Mg−1 at large scale (60 million gallons year−1 or 227 million L year−1) and low yield and participation rates. The minimum ethanol selling price (MESP) was approximately twofold lower for the advanced case compared with the base case. The payback period was several times lower for the advanced case compared with the base case, with increasing disparity at smaller scales, and was highly sensitive to ethanol price supports. For both C‐CBP and the conventional processing paradigm, MESP decreased with increasing scale, indicating that the cost penalty due to higher feedstock transport distances was more than outweighed by lower capital costs. However, the cost penalty for operation at small scale, expressed in $ gallon−1 ethanol, is lower for C‐CBP than for the conventional paradigm by roughly twofold. Particularly for initial applications of C‐CBP, we speculate that this cost penalty will likely be modest compared with the anticipated benefits of small‐scale operation such as increased opportunity to use existing infrastructure, easier plant siting and supply chain establishment, and lower total investment required.

Application of Cluster Analysis in the Evaluation of Automotive Fuel Prices Marketed in Goiás

Objective: The aim of this study is to present economic indicators constructed through cluster analysis, aiming to identify which gas station brands offer the lowest overall fuel prices. Theoretical Framework: The increasing demand for low-cost products, particularly automotive fuels, is a constant in the Brazilian market, significantly impacting both the economy and consumers' daily lives. This scenario underscores the analysis of prices as a crucial tool for understanding market behavior. Method: Data were obtained from the open data portal of the National Agency of Petroleum, Natural Gas and Biofuels (ANP), focusing on the historical price series of regular gasoline, premium gasoline, and ethanol in the state of Goiás. Cluster analysis was employed to group eight gas station brands into three distinct clusters. Results and Discussion: Findings reveal that Rodoil offers the lowest overall fuel prices, whereas Alesat, Ciapetro, and Raízen have the highest overall prices. These discoveries provide valuable insights into the competitive dynamics of the fuel market in Goiás. Research Implications: The significant debates generated in society by the rising prices of gasoline, ethanol, and other products such as cooking gas and diesel underscore the urgent need to revise fuel pricing policies in the country. Originality/Value: This study contributes uniquely by applying cluster analysis to identify price patterns among different gas station brands, offering an innovative approach to understanding competitiveness in the fuel distribution sector in Goiás.

Process simulation and economic evaluation of the Alcohol-to-Jet production of sustainable aviation fuel in the Brazilian context

In the current aviation market context, the search for more sustainable and low-carbon emission alternatives has been driving the demand for biojet fuel. In this context, this study aimed to assess the feasibility of a biojet fuel production plant in Brazil using the Alcohol-to-Jet technology with ethanol as raw material. The process was simulated in Aspen Plus® v12.1 and the results were applied in an economic analysis. The biojet fuel and ethanol breakeven prices were determined in different scenarios. In the best scenario, biojet fuel would cost US$ 1.86 per kg, which is 31% less than the average-priced sustainable aviation fuel marketed in the United States. It was also demonstrated that the process would be economically viable in the country − for substitution of conventional aviation fuel at competitive market values − if there was a 44–55% reduction in the ethanol price, which seems feasible if one considers the pre-COVID-19 pandemic levels. The obtained results indicate this process technology as an important alternative to be considered in future policies, and serve as a basis for future works, being easily adapted for other economic contexts if necessary.

The time-varying dynamic impact of US renewable energy prices on agricultural prices in China: the case of fuel ethanol.

This paper intends to look into the time-varying dynamic impact of US fuel ethanol, one of the renewable energy sources, on the prices of agricultural products (specifically corn, soybeans, rice, and wheat) in China based on monthly price data from January 2000 to January 2023. To achieve this, a time-varying parameter vector autoregressive (TVP-VAR) model is employed, which takes into account structural changes in emergencies through time-varying parameters. The empirical results show that the equal-interval impulse responses of price fluctuations in agricultural commodities are primarily positive to variations in fuel ethanol prices and production. And the intensity and direction of the effects vary at distinct time lags. Additionally, the magnitude of these responses is most pronounced in the short term for all agricultural commodities except for corn, and the duration of the impulse responses at different time points is generally longer for corn prices compared to other commodities. The study also reveals that the influence of US fuel ethanol on Chinese agricultural commodity prices is not substantial on the whole. Therefore, there is a necessity to advance the growth of biofuels and provide policy support and financial subsidies for agricultural products earmarked for food production. These actions could shed insights into the progression of Chinese renewable energy and food policies, ensuring the stability of the market in the long run.

The shape of the Treasury yield curve and commodity prices

We decompose the U.S. yield curve into three latent factors – the level, slope and curvature – and explore the information content of the yield curve regarding the future evolution in oil, coal, copper, ethanol, gold, heating oil, natural gas, palladium, platinum, silver and zinc prices. Using data from January 1986 to November 2021, we find that the shape of the term structure is very informative about future innovations in these commodities. Results indicate that shocks to the level, which represents long-term expectations about inflation, predict positive (negative) price (volatility) changes. Shocks to the slope and curvature, which are interpreted as part of the business cycle conditions, predict negative price changes. These results are manifested mainly in the period after the financialization era in 2004. Our findings have far-reaching implications for investors, policymakers and firms involved in the mining industry.

Managing risk in commodity processing using formula pricing contracts: An application to ethanol

AbstractAs is the case with many commodity processors, manufacturers of ethanol face considerable margin risk from a wide range of input and output prices and the interrelation of these risks with the technical operational efficiency of the plant. Buyers of ethanol desire greater budget certainty for future ethanol purchases. An approach to pricing that has found considerable use in the livestock, dairy, and milling industries is the use of component‐based formula pricing. This study constructs a Monte Carlo simulation model of a typical South Dakota ethanol plant that uses a formula contract to fix components of the ethanol price. The simulation results indicate that the contract has considerable margin risk management benefits for the ethanol producer. The buyer also achieves marginal risk management benefits but with greater budget certainty as the components are fixed. Additional observations of interest to the industry are drawn from the sensitivity results of the simulations. [EconLit Citations: Q13, G17].

Analyzing the Performance of Diversified Commodity Derivatives Portfolios in Brazil

This paper seeks to investigate how we invest in commodity derivatives by comparing the performance of portfolios constructed using the mean-variance model, hierarchical risk parity, and the naive strategy with the stock market and the risk-free rate. For this purpose, daily closing future prices of ethanol, corn, cattle, gold, coffee, and soybeans traded in Brazil from 2015 to 2023 are considered, in addition to the rate of interbank deposit certificates (CDI or DI) and the performance of the theoretical portfolio. of shares in the Ibovespa index. The constructed portfolios are analyzed using the Sharpe Ratio, CVaR, Beta, and Maximum Drawdown metrics and the comparison of their returns. The results indicate that the portfolio constructed using the mean-variance model presented the lowest risk ratios and generated the highest return, followed by the hierarchical risk parity, the naive strategy, and the Ibovespa index. These findings are useful for scientific literature that investigates finance by bringing empirical evidence of Brazilian commodities to portfolio managers, investors, and other agents in the supply chain.

Exploring the potential of the carbon credit program for hedging energy prices in Brazil

The transition to a low-carbon economy is imperative to reduce reliance on fossil fuels and mitigate pollution emissions. This preposition also aligns with the United Nations Sustainable Development Goals (SDGs-13), which highlight the climate change action. In this vein, Brazil has implemented the Decarbonization Credit (CBIOS) program to incentivize biofuel production and promote environmental sustainability through carbon credit emissions. To this end, the present study evaluates the effectiveness of the CBIO contract as a hedging tool for investors in the face of energy price fluctuations and decarbonization efforts. Specifically, we employ conditional dynamic correlation (DCC-GARCH) and optimal hedge ratio (HR) techniques to assess the relationship between CBIO and the futures and spot prices of sugar, oil, and ethanol. Our findings suggest that the current CBIO contract is not an effective hedge against energy spot and future prices. However, our analysis identifies a strengthening correlation between ethanol traded in Chicago and CBIO over time, highlighting the potential for an underlying contract to serve as an effective hedging tool in the future. Our study adds to the existing literature on carbon pricing mechanisms and their impact on financial markets, emphasizing the importance of sustainable energy policies and their potential to mitigate the risks associated with energy price volatility and decarbonization efforts.

Análisis detallado de un motor diésel alimentado con mezclas de combustible diésel, aceite de linaza, biodiésel y etanol en el contexto termodinámico, económico y medioambiental

The growing demand for energy, coupled with volatile oil prices and the environmental damage caused by the harmful gases produced when it is used, has prompted countries to explore alternative energy sources. The transportation sector, an important end-user of petroleum, must adapt to the changing energy landscape and opt for new technologies to remain competitive. The study conducted a thorough thermodynamic analysis to assess the economic and environmental impact of using biodiesel (BD) made from cold-pressed linseed crude oil, commercial diesel fuel (DF), and ethanol in a compression-ignition (CI) engine. The study conducted a detailed thermodynamic analysis of performance and emission data recorded from a single-cylinder diesel engine. The analysis included energy, exergy, sustainability, exergoeconomic, exergoenvironmental, and exergoenviroeconomic parameters. The results pointed out that the fuel energy increases with the load, with B20E5 fuel reaching 6.887 kW at 25% load and 18.908 kW at 75% load. BD and blended fuels were found to have a higher fuel energy compared to DF. At 50% load, DF and B20 fuels have fuel energies of 10.765 kW and 10.888 kW, respectively. The analysis clearly demonstrates that commercial DF outperforms both DF-BD binary fuel blends and DF-BD-ethanol blends in terms of thermal and exergy efficiency values. Furthermore, DF exhibits lower entropy generation and exergy destruction than other binary and ternary blends. At maximum load, the exergy efficiencies of DF, B20, and B20E10 fuels were 28.5%, 25.8%, and 24.7%, respectively. The exergy losses were determined to be 10.495 kW, 12.317 kW, and 13.134 kW, respectively, under the same conditions. Binary and ternary fuel blends have a higher cost of power from the engine shaft due to the expensive market prices of ethanol and linseed oil-based BD compared to DF. However, B20 and B20E10 fuels have a lower environmental cost than DF, with B20 and B20E10 fuels estimated to be 2.8% and 5.3% lower than DF, respectively, at full load. These findings demonstrate the clear advantages of using B20 and B20E10 fuels over DF, both in terms of cost and environmental impact. Additionally, the infusion of ethanol into ternary blends reduces the environmental damage. This study provides a unique perspective on sustainable energy research and serves as a valuable reference for future studies.

Development and Economic Analysis of Bioethanol Production from Palm (Arenga Pinatta) Biomass with Ionic Liquid Pretreatment Using SuperPro Designer Software

Bioethanol has many functions both as a chemical, food and as a source of energy. The development of bioethanol production is currently leading to the residue of the main product. So that in this study the biomass of arena or Arenga Pinatta was used with a large availability of waste. Therefore, a performance and economic analysis was carried out in the production of bioethanol from palm biomass with ionic liquid (IL) using SuperPro Designer (SPD) Software. As a preparatory stage, the process of testing the characteristics of the biomass is carried out to obtain the most optimal composition of palm sugar in bioethanol production. After simulating the conditions according to the experimental process on the most optimal palm biomass composition, it was found that the most optimal Ionic Liquid (IL) and biomass ratio was at 0.5 g/g with the ethanol concentration obtained at 90.6 g/L at 13 hours which corresponds to theoretical yield of 96% conversion of biomass to ethanol. Meanwhile, the production of ethanol in a factory for energy can minimize the price of ethanol by 30% from the initial price. Thus, with the abundant availability of biomass, bioethanol production with aren biomass has the potential to be developed in Indonesia

Potential Development and Economic Analysis of Bioethanol Fabrication Design from Oil Palm Biomass with Ionic Liquid Choline Acetate Using SuperPro Designer (SPD) Software

The increasing use of energy causes the availability of energy, especially in Indonesia, to be depleted. This condition encourages humans to develop renewable energy sources, one of which is bioethanol, with the availability of abundant raw materials in nature. However, the development of bioethanol is still ineffective because it requires a long time and has high costs. Therefore, a design for bioethanol fabrication from oil palm plantation products with ionic liquid pretreatment using SuperPro Designer (SPD) software was developed. The bioethanol production process was simulated through three stages: pretreatment, enzymatic saccharification, and fermentation. Pretreatment was carried out using the ionic liquid Choline Acetate, after which the results of saccharification and fermentation were analyzed. The results of saccharification showed that around 138 g/L of palm oil was converted into sugar for fermentation. The overall result of the simulation system is that the fermentation process for 12 hours produced 92 g/L ethanol or 96% of the theoretical yield. Meanwhile, ethanol production through fabrication for energy can reduce ethanol prices by 30% from their initial price. This ethanol fabrication design is very supportive of optimizing biomass into bioethanol. Therefore, this design can be used as a recommendation for economical bioethanol production to obtain optimal results in bioethanol production.

1680. Characterization of Ethanol Lock Use and Line Infections in Pediatric Patients with Intestinal Failure Requiring Central Venous Access

Abstract Background Pediatric patients with intestinal failure often require central venous line access for administration of parenteral nutrition and/or fluids, which leads to increased risk for central line associated-bloodstream infections (CLABSI). Ethanol lock therapy (ELT) has been used to reduce the risk of CLABSI in this patient population, but recent significant increases in the price of ethanol have prompted healthcare systems to explore cost-saving measures such as decreasing ELT frequency from daily to thrice weekly (TIW) or using antibiotic lock therapy as an alternative to ELT. The objective of this study was to compare the incidence and microbiology of CLABSI in pediatric patients with intestinal failure who received different lock therapies. Methods This was a single-center, retrospective, descriptive study that included pediatric patients who were followed by the Michigan Medicine Children’s Intestinal Rehabilitation Program between July 1, 2020 and June 30, 2022. Data were collected via the electronic health record. Incidence of CLABSI and microbiology were compared based on the type of lock therapy patients received (daily ELT, TIW ELT, or no ELT). Results A total of 46 patients were analyzed in this study, including 13 on daily ELT, 23 on TIW ELT, and 10 on no ELT. During the study period, 69% (9/13) of patients on daily ELT, 35% (8/23) of patients on TIW ELT, and 60% (6/10) of patients on no ELT had at least one CLABSI (for comparison between daily and TIW ELT, p = 0.0819). Of 75 episodes of CLABSI identified during the study period, the most commonly isolated pathogens were Staphylococcus epidermidis (n = 33), S. aureus (n = 19), S. hominis (n = 17), and Escherichia coli (n = 8). Almost half (44%, 33/75) of CLABSI reported were polymicrobial (see Table 1 for comparison of microbiology by type of lock therapy).Table 1:Number of monomicrobial vs. polymicrobial CLABSI by Gram stain results and type of lock therapy. Conclusion There was no statistically significant difference in the incidence of CLABSI between pediatric patients with intestinal failure who received TIW ELT and those who received either daily ELT or no ELT. TIW ELT appears to be an effective and cost-efficient option compared to daily ELT in this patient population. Disclosures All Authors: No reported disclosures

Dynamic connectedness between energy markets and the Brazilian cash market: An empirical analysis pre‐ and post‐COVID‐19

AbstractBrazil's significant commodity production is internationally recognized, yet the absence of a mature futures market exposes it to price risks and international shocks. This study explores the dynamic connectedness between commodity futures and the Brazilian cash markets, using a time‐varying parameter vector autoregressive model. We also assess COVID‐19's impact on this connectedness. We find a significant influence of oil prices on Brazilian ethanol prices, and particularly emphasize the Heating Oil spillover effect on ethanol in the post‐COVID‐19 era. We also note the ascension of Brazilian soybean spot markets' international significance since 2017, amplifying their role in global grain price discovery. Finally, by computing hedge ratios and effectiveness between commodity futures contracts and Brazilian spot prices, our study reveals soybean cash price as the most effective hedge. These insights deepen comprehension of connectedness within Brazilian commodity markets, thereby guiding investors and policymakers in strategic energy policy decisions.

Additional glucoamylase genes increase ethanol productivity on rice and potato waste streams by a recombinant amylolytic yeast

The implementation of consolidated bioprocessing for converting starch to ethanol relies on a robust yeast that produces enough amylases for rapid starch hydrolysis. Furthermore, using low-cost substrates will assist with competitive ethanol prices and support a bioeconomy, especially in developing countries. This paper addresses both challenges with the expression of additional glucoamylase gene copies in an efficient amylolytic strain (Saccharomyces cerevisiae ER T12) derived from the industrial yeast, Ethanol Red™. Recombinant ER T12 was used as a host to increase ethanol productivity during raw starch fermentation; the ER T12.7 variant, selected from various transformants, displayed enhanced raw starch conversion and a 36% higher ethanol concentration than the parental strain after 120 h. Unripe rice, rice bran, potato waste and potato peels were evaluated as alternative starchy substrates to test ER T12.7′s fermenting ability. ER T12.7 produced high ethanol yields at significantly improved ethanol productivity, key criteria for its industrial application.

Price connectedness in U.S. ethanol terminal markets

This article shows, for the first time, the degree of price volatility connectedness across the major regional ethanol markets in the U.S. Connectedness measures are based on forecast error variance decompositions that inform which prices drive system dynamics. We pay special attention to volatility spillovers to and from Chicago, as it is equipped with one of the largest terminals in the U.S. and is widely regarded as the center of ethanol price discovery in the country. Ethanol prices in the Chicago terminal electronic trading platform are also suspected of being manipulated over the 2017‐2019 period. We use Diebold and Yilmaz (2012 and 2014) and a rolling window approach to study the dynamics of price volatility connectedness over time. Using daily data from 2013 to the beginning of 2021, we find that Chicago is the market that generates the most innovations to other market prices. In contrast, Chicago receives the least amount of innovations from all other markets, placing Chicago at the center of price dynamics. We find that price connectedness measures are correlated with market fundamentals, policy, and concentration in the Chicago terminal electronic trading platform, with the latter being associated to an increase in the relevance of Chicago as a central market.

Anhydrous Ethanol Pricing in Economies with an Underdeveloped Biofuels Market: The Case of Mexico

Most gasoline currently consumed in Mexico continues to be oxygenated with Methyl Tert-Butyl Ether (MTBE) despite its proven effects on the environment and human health. Hence, the existence of a regulatory framework on biofuels and various institutional efforts have not been sufficient to develop a national market for anhydrous ethanol use as biofuel. The goal of this research is twofold: one, to review and analyze the governmental actions taken to incorporate bioethanol as a gasoline oxygenate, and, two, to design a tool to estimate the bioethanol price at the Storage and Distribution Terminals of PEMEX (Mexico’s state-owned oil company). A price estimation model for bioethanol was developed through the microeconomic theory of the producer and the indifference price of a product methodology, which calculates the daily price of ethanol in the period 2015–2022; additionally, an MS Excel-based support tool was created for this analysis (namely: the Price-CEM). The analysis showed that incorporating bioethanol into the Mexican energy matrix would require policies of fiscal support for R&D, agricultural waste management and bioethanol production, as well as a new regulatory framework to both gradually eliminate MTBE and establish bioethanol/gasoline blending targets. Furthermore, institutional efforts would also be required to integrate all links in the biofuel production chain, including primary feedstock producers. The cost estimation method and tool have also shown to be valuable instruments to calculate both the prices at which a local bioethanol market would be competitive (with respect to the international market) and the most important cost contributions for local supply chains. This is the first tool to estimate the price of anhydrous ethanol at the local level, which can contribute to identifying opportunities and economic thresholds for the successful development of feasible bioethanol markets in Mexico.

The Ethanol Market and Its Relation to the Price of Agricultural Commodities

In this article, we seek to present the synthesis of the global ethanol market in the United States (US) and Brazil by using caloric equivalence to empirically characterize the elasticity of supply and demand. We also seek to evaluate the relationship between world ethanol production and prices of agricultural commodities (wheat, rice, corn, soybeans and sugar) from 1981 to 2016 using climate-induced yield shocks as instrumental variables. The main results for the world market indicate that the production and demand for ethanol respond elastically to changes in commodity prices. The world ethanol production has no significant relationship with food prices. However, evaluation of the ethanol market and its interaction with the agricultural commodities market confirms the hypothesis that Brazilian ethanol is weakly related to the price of food.

An Analysis of Dynamic Correlations among Oil, Natural Gas and Ethanol Markets: New Evidence from the Pre- and Post-COVID-19 Crisis

After the economic shock caused by COVID-19, with relevant effects on both the supply and demand for energy assets, there was greater interest in understanding the relationships between key energy prices. In order to contribute to a deeper understanding of energy price relationships, this paper analyzes the dynamics between the weekly spot prices of oil, natural gas and benchmark ethanol in the US markets. The analysis period started on 23 June 2006 and ended on 10 June 2022. This study used the DMCA cross-correlation coefficient in a dynamic way, using sliding windows. Among the main results, it was found that: (i) in the post-pandemic period, oil and natural gas were not correlated, in both short- and long-term timescales; and (ii) ethanol was negatively associated with natural gas in the most recent post-pandemic period, especially in short-term scales. The results of the present study are potentially relevant for both market and public agents regarding investment diversification strategies and can aid public policies due to the understanding of the interrelationship between energy prices.

Price dependence of biofuels and agricultural products on selected examples

The growing demand for raw materials for the production of biofuels may lead to an increase in the prices of these raw materials and, due to the shortage of land, to an increase in the prices of other crops. This is due to the fact that the growing demand for raw materials for the production of methyl esters and bioethanol (the most widely used biofuels), such as rape and corn, is a form of competition on the food and feed markets. It should be mentioned that although the topic is not new, it is still very relevant, taking into account the expansion of energy crops, as well as national, European and world energy policy. Especially due to the fact that, as has already been mentioned, the use of plant products for the production of biofuels has an impact on the regulations of the food market.This study is to analyze the volatility and dependence of ethanol, biodiesel, maize and rapeseed prices in the period of 2016-2019 and aims at assessing the correlation between the agricultural and biofuel markets. In this paper, the investigation regarding co-integration of biofuel and agricultural commodity prices has utilized ethanol and commodity prices with the use of the vector error correction model (VECM). Price dependencies between the prices of biodiesel, rapeseed, maize and ethanol were found, indicating the existence of long-term causality in at least one direction between the analyzed prices. The results indicated that biodiesel prices during the period in question were influenced by the previous week’s prices of biofuel and rapeseed. Moreover, biodiesel prices had an impact on the level of ethanol and rapeseed prices. In the case of rapeseed, the correlation between its prices and those of corn is also noticeable, while prices of corn may also affect prices of ethanol.

Equilibrium and real options in the ethanol industry: Modeling and empirical evidence

In the last twenty years a large number of ethanol firms have established operations in the US. Ethanol, produced from corn, is blended with pure gasoline to produce fuel. Producers hold an option to turn off unprofitable plants. Blenders choose to substitute ethanol for gasoline at or beyond the mandate set by the government. We propose an equilibrium model for blenders and producers that accounts for government measures and for real optionality embedded in the industry. The model, driven by corn and gasoline prices, leads to analytical expressions for the price and output of ethanol, and to policy implications on the impacts of the mandate and blend credit. The model also leads to closed form valuation for an ethanol producer. Using data between 2000 and 2017 we confirm that, as in the model, ethanol was largely priced as the maximum of rescaled gasoline and corn prices. Historical output levels between the mandate and installed capacity were explained by our theory. Finally, the share price dynamics for the largest public ethanol producer in the US was consistent in some aspects with the value of a real option.