Hart Energy's newly released study, U.S. and Brazil Ethanol Outlook to 2022, finds the United States has vaulted over Brazil to lead the world in the export of ethanol, a title it is positioned to retain in 2012 and beyond.

The study also dismisses the notion that goals of two programs in the U.S. can be achieved. Biofuels volumes required by the federal Renewable Fuel Standard (RFS) and California's Low Carbon Fuel Standard (LCFS) do not match with the realities of commercialization and availability, Hart Energy maintains, and changes in these policies will be necessary in the next few years.

"Much of the focus has been on the 'blend wall,' biodiesel, and cellulosic biofuels targets of the RFS program in the public forum," said Tammy Klein, assistant vice president of Hart Energy. "But what's so striking to us is that Brazilian ethanol is needed to meet targets under those programs - and our forecast shows it will not be available at critical points in the study period."

"Brazilian ethanol will also be in high demand in other parts of the world, especially Europe, and will be a key part of the strategy for increasing octane and meeting renewable targets globally," added Klein.

The study examines the public policies, market developments, and economics of the ethanol industry in the two countries which produce 80 percent of the world's supply. The Outlook contends renewable fuel mandates in the U.S. will also create opportunities for increased production of corn-based ethanol and biodiesel.

"The good news is the U.S. ethanol industry has been able to move forward despite the 'blend wall' and open new export markets around the world," said Maelle Soares Pinto, director of Hart Energy's Global Biofuels Center (GBC). "The constraints we are seeing with Brazilian ethanol could open up opportunities for the U.S. ethanol industry, and this will be a key subject of study for us this year."

Hart Energy projects Brazilian ethanol exports will see wide fluctuations and only return to their 2008 peak in 2019. A combination of factors hinders the Latin American giant, including insufficient investment in its sugarcane sector which has contributed to below-average recent harvests. Attractive world sugar prices will, at times, draw a significant portion of the country's harvest away from ethanol production.

U.S. and Brazil Ethanol Outlook to 2022, authored by a team of Hart Energy biofuels and industry experts, addresses numerous factors affecting the ethanol industry, including a forecast for crude oil, gasoline, ethanol feedstocks and ethanol production, supply, demand, and Renewable Identification Numbers (RINs).