By Tim Portz
The combined export value of wood pellets, ethanol and biodiesel for U.S. producers has flirted with $3 billion since 2012, and depending upon how the final numbers shake out for last year, 2016 may very well be the year this milestone is surpassed. For both wood pellets and fuel ethanol, export numbers have never been higher than they are right now, and all three sectors are eyeing foreign markets as a means to significantly grow their businesses.
An analysis of the same data reveals key and informative differences. While foreign markets are an important part of the overall market picture for fuel ethanol and biodiesel producers, exports account for less than 10 percent of annual production while, from a volumetric perspective, wood pellet production in the U.S. is heavily reliant on foreign markets.
Now, the looming question is, what impact will a Trump administration, which campaigned on a promise to revisit the nation’s trade agreements, have on the export opportunities for each of these industries?
Global Market Leaders
In both the fuel ethanol and wood pellet categories, the U.S. can boast the largest production capacity and the largest share of the global export market. In both cases, U.S. exports outstrip the closest competitor by a wide margin. Wood pellet export volumes for U.S. producers were well over 4 million tons, while Canada has yet to surpass 2 million tons of exports. Brazil is the world’s second leading producer of fuel ethanol, and while production and export volumes there vary from year to year, in 2015, its export volumes were about half of what U.S. producers achieved. Additionally, Brazil is a prominent market for U.S. ethanol producers taking over 100 million gallons in 2015.