The economic incentive for European refiners to mix ethanol into gasoline supplies and meet government mandates has been dwindling rapidly due to competition from cheaper bio-based ETBE, sources told Platts this week.
Ethanol and ETBE are bio-additives that help gasoline burn more efficiently, reducing emissions. Both products are also used to meet increasing EU government mandates for renewable fuels.
ETBE sank to a discount of $5.63/mt to ethanol April 18, the largest discount since February 18, 2011, before recovering to a premium of $7.90/mt Tuesday, according to Platts data.
ETBE and ethanol wholesale cargoes traded in the spot market were assessed by Platts at $1,041.5/mt FOB AR and Eur626.5/cu m ($1,033.6/mt) FOB Rotterdam Tuesday, respectively.
