Why is the price of biofuel increasing?

Of course, it will not go unnoticed that the price of a liter of E85 superethanol increases faster than diesel or SP95-E10. But what could have happened and what can be expected in the future? Explanations.

No doubt you have noticed that the price of a liter of superethanol has increased significantly in recent weeks. And it can be said that the end of the fuel discount only partially explains this increase. Logically, all fuels are in the same boat. No, they went faster than diesel or unleaded 95 E10.

According to our partner Carbu.com, the average price of a liter of E85 was €0.76 a year ago (that is, before the introduction of the government fuel discount effective April 1, 2022). , January 11, 2023, €1.12. This means an increase of 47.4%. Diesel is, of course, more expensive at €1.91 a liter, this Wednesday, January 11. However, its price increased by “only” 17.9% within a year.

A slightly less than 10% increase is better for the SP95-E10, which gained just 16 cents for the year. We spoke to Sylvain Demoures, Secretary General of the National Association of Agricultural Alcohol Producers (SNPAA) to understand what could happen with bioethanol.

Consumers ‘protected’ in 2022

“We have to look at the share of oil anyway, because we have 40% of gasoline in winter in E85. However, oil has become more expensive,” he wanted to emphasize at first.

In addition, there is the fact that ethanol is more expensive. But here’s the subtlety compared to diesel or unleaded:

“What characterizes the ethanol market is that it is sold in a fixed volume between the buyer and the seller based on annual contracts. Fuel distributors strive to meet all anticipated needs. And they agree with several suppliers to set a price that is valid throughout the year.”

It has nothing to do with the price of gasoline, which varies from day to day. The price of ethanol is determined in September or October.

“In 2022, consumers were partially protected from costs by annual contracts established in 2021 before the war in Ukraine.”

We understand why the price gap between superethanol and diesel or SP95 widened last year, as distributors of these last two fuels were able to gradually pass on the explosion in raw material and energy prices in 2022.

According to Sylvain Demoures, consumers are “guarded” for E85. We had to wait until the beginning of autumn when the prices for 2023 were determined…

water in the gas

But at this exact moment, the price of raw materials, especially gas, was very high. Why do you mention gas?

“Well, when you grow crops, whether it’s wheat, corn, or beet, you need nitrogen fertilizers from gas.”

In addition, once the raw material reaches the factories, energy is required to convert it. Mainly used in ethanol plants is … gas. However, increases in the price of this important material in the production of E85 were about 150% in early autumn. CQFD.

In 2023, “the average price of a liter of E85 will be more stable than that of gasoline”

Now “will the price of bioethanol increase?” What is the answer to the question? “. In general, “the average price of a liter of superethanol will be more stable than that of gasoline”. No changes are expected for the ethanol fraction, which will remain the same in 2023.

“The average price of E85 will change a little bit, but less than gasoline, it’s just that gasoline has a share.”

Another element that should play in favor of stagnation is that the current level of gas prices is the pre-Ukraine crisis level.

“Unless there’s a new crisis, and I don’t know what it’s going to be, because we’ve already had it, I don’t see what kind of disaster we’re going to have to get gas prices to start going up again.”

What about taxes? For Sylvain Demoures, the answer is clear:

“The state does not want to touch the price of fuel due to the sensitivity of the issue of yellow vests.”

Now we just have to wait and see.

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