EIA increases ethanol production forecasts for 2021, 2022

By Erin Voegele | July 07, 2021

The U.S. Energy Information Administration increased its forecasts for 2021 and 2022 fuel ethanol production in its latest Short-Term Energy Outlook, released July 7. The outlook for 2021 and 2022 ethanol blending was maintained.

The EIA currently predicts fuel ethanol production will average 970,000 barrels per day in 2021, up from the June STEO's forecast of 960,000 barrels per day. Production is expected to increase to 1 million barrels per day in 2022, up from the prior month’s forecast of 990,000 barrels per day. Ethanol production averaged 910,000 barrels per day in 2020.

On a quarterly basis, the EIA currently predicts ethanol production will average 1 million barrels per day during the third quarter of this year, falling to 980,000 barrels per day in the fourth quarter. In 2022, ethanol production is expected to average 980,000 barrels per day during the first quarter, 1.01 million barrels per day in the second quarter, and 1.02 million barrels per day in the third and fourth quarters.

Ethanol blending averaged 820,000 barrels per day in 2020. Blending is currently expected to increase to 900,000 barrels per day in 2021 and 920,000 barrels per day in 2022. Both forecasts were maintained from the June STEO. The EIA said this level of consumption results in the fuel ethanol share of total gasoline, which was an estimated 10.2 percent in both 2019 and 2020, remaining near this level in 2021 and 2022.

The EIA said its forecast for ethanol blending assumes that growth in high-level blends is limited by a lack in consumer demand for fuels beyond E10 despite significantly elevated renewable identification number (RIN) prices, which could incentivize increased fuel ethanol blending by some gasoline blenders and retailers.