Ethanol exports rise as U.S. hits blend wall

Ethanol consumption in the United States stagnated last year at about 12.9 billion gallons, making up about 9.6 percent of the fuel at U.S. gas pumps, according to a report from the U.S. Energy Information Administration.

Meanwhile exports have been on the rise, nearly tripling to 1.2 billion gallons from  2010 to  2011. The domestic ethanol market has been nearing the 10 percent blend wall, which was the maximum amount of ethanol approved for use in cars and light trucks.

In a controversial move earlier this year, the EPA approved a 15 percent blend of ethanol in gasoline in vehicles from model year 2001 and newer. However, E15 has been slow to catch on because motorists worry it might affect their engines.

The EIA said increasing  domestic ethanol use “will be challenging unless higher percentage ethanol blends can achieve significant market penetration.”

Ethanol producers are compensating for the cooling domestic market by ramping up exports. The United States became a net export of fuel ethanol in 2010 and beat out former top-exporter Brazil, whose sugarcane-based ethanol has been suffering from a poor crop over the past two years.