The ramp-up in ethanol production by the UK's Ensus and
Vivergo plants, which has driven the country back to net imports in wheat, will
lead a bounce in European Union output of the biofuel to a record high.
However, in feedstocks, it is corn and sugar beet - rather
than wheat, which is more usually associated with the UK plants - which will
see demand raised by the return to increasing ethanol output.
US Department of Agriculture bureaux in Europe pegged at
6.29bn litres EU output of ethanol this year, a rise of 209m litres year on
year, and a record high.
Indeed, the increase will more than reverse a drop last
year, the first production decline in at least nine years, which the bureaux
attributed to "financial problems within the sector", with 2016 notably marked
by the fallout from the collapse of Spanish-based Abengoa late in 2015.
Dutch, UK recoveries
Spain's own ethanol output was forecast falling further this
year, by 48m litres to 280m litres, taking to 43% the slump in the country's
volumes since a 2015 high.
Top EU ethanol producers, 2017 and (change on year)
1: France, 1.04bn litres (unchanged)
2: Germany, 950m litres, (+1.6%)
3: UK, 815m litres, (+23%)
4: Hungary, 590m litres, (unchanged)
5: Belgium, 570m litres, (unchanged)
EU total, 5.38bn litres, (-0.7%)
The Balbilafuente plant in Salamanca, for instance, was
reported this week to be once again taking deliveries of cereals, after being
mothballed since March last year.
However, output in the Netherlands, which was affected last
year by the closure of an Abengoa site, was seen recovering this year by 19.1%
to 530m litres.
And in the UK, output will soar 23% to a record 815m litres
- reinforcing the country's status as the EU's third-ranked producer behind
France and Germany- "due to increased use of existing capacity" at the Ensus
and Vivergo sites in northern England.
The comments follow an upgrade by CropEnergies, the owner of
Ensus, to its profits forecast, thanks largely to the reopening of the site
after a period offline because of weak margin prices.
European ethanol prices had also been higher than expected, CropEnergies
Elevated margins are also reported to have boosted
production the nearby Vivergo plant, owned by Associated British Foods after a
maintenance period in January and February.
Indeed, the raised demand for raw materials from ethanol
plants was cited as a prime cause of a forecast last week for the UK to return
being a net wheat importer in 2016-17.
Corn vs wheat
Wheat is the default feedstock for both Ensus and Vivergo,
part of whose rationale for construction in the UK was the country's large
production of lower-quality wheat, although the plants were sited close to
ports to allow imports too.
Still, the USDA bureaux forecast, EU-wide, corn extending
its lead as the best-used cereal in the bloc for ethanol production, with consumption
of the grain viewed as rising by nearly 250,000 tonnes in 2017 to a record
Wheat volumes, by contrast, were seen easing by some 140,000
tonnes to 3.89m tonnes.
Ensus has ability to use corn in its production, with corn
also the preferred grain "in the Netherlands… where the majority of the ethanol
plants are located at sea ports, and the corn is predominantly sourced from the
Use of sugar beet in making ethanol will rebound, by some
960,000 tonnes to 9.79m tonnes, with the boost to sowings of the crop provided
by deregulation of the EU sugar industry.
"Despite the relatively high sugar prices, use of beets for
ethanol production is expected to recover.
"Bioethanol produced from sugar beets faced tough
competition from decreasing grain prices, and as a result fell during 2013-16."