The geographic distribution of the production and consumption of ethanol is related to many factors, such as production destinations, government policies, natural resources’ availability, and environmental regulations. Different world regions can be understood as distinct markets with diverse demands and supply possibilities (Jovanovic 1993). The production, consumption, exports, and imports of ethanol in major countries (including the European Union) that is estimated for 2013 and 2020 can be observed in Fig. 2.

Estimates indicate that the USA is clearly the largest producer and consumer of ethanol and it is followed by Brazil. Upon analyzing these main producers, a difference from the perspective of the increase in production by 2020 is observed. According to the estimate, the increase in consumption will be greater than the increase in production in the USA. Therefore, even though the USA is the world’s greatest ethanol producer, it will eventually have a need for ethanol imports. Because the Brazilian capacity of production by 2020 will be higher than the domestic demand, the surplus of ethanol could be redirected to supply the needs of international markets.

The great potential for production in Brazil might be related to the favorable climate conditions and the appropriate areas for agriculture, which are currently abandoned, uncultivated, or used as extensive pasture. Another contributing fac­tor is the improvement in technology in recent years, which has particularly been applied to feedstock.

Brazil plans to expand the area for sugarcane cultivation from approximately 4.4 Mha (2008) to 8 Mha (2017) by occupying the currently extensive area that is devoted to cultivating pasture (IEA 2010). Today, 50 % of the produced sug­arcane is used for biofuel production. Another destination of the produced sugar­cane includes its use as feedstock and to supply the (domestic and international) sugar market. Furthermore, the Brazilian sugar mill sector can sell bioelectricity produced from bagasse (IEA 2011).

Feedstock is the main cost of conventional biofuels, which accounts for 45-70 % of the total production costs. In contrast, for advanced biofuels, the main factor is the capital costs (35-50 %), which is followed by the feedstock cost (25-40 %) (IEA 2009). In the USA, ethanol is mainly produced from corn. In certain areas, sorghum grain, wheat, and barley are also used as feedstock.

Another important producer and consumer of ethanol is the European Union. The EU is a net importer; and in 2013, estimative indicates it exhibit consump­tion that should be 27 % higher than the production. This perspective indicates a similar condition by 2020 (24 % more imports than what should be produced).

Because the land availability is a potential limiting factor for the production, the improvement of the waste and residues that are produced would play an important role in enabling further development of the biofuel sector (IEA 2011).

The fast growth of the Chinese economy and its potential for maintaining this behavior has led to rising demand for energy. In response to this demand, the search for alternative sources of energy has become a priority for the Chinese gov­ernment (Qiu et al. 2010). Oil deficits and an increasing dependence on oil imports have exposed China to risks due to its reliance on the international oil markets, which has motivated the development of ethanol production (Tao et al. 2011).

In 2013, China presented a domestic demand for ethanol that was higher than its production. Although the ethanol production is expected to increase, this situ­ation would remain in future years. In 2003, the trade of bioethanol and a gaso­line blend (with 10 % ethanol that is known as E10) was initiated in China (Qiu et al. 2010). According to the Medium — and Long-Term Development Plan for Renewable Energy, which was issued in 2007, China aims to increase the produc­tion of ethanol from non-food-grain feedstock. The predominant feedstock used was corn, which was followed by wheat, but the government committee incentiv — ized ethanol production from a diversity of feedstocks including cassava, sweet potatoes, sugarcane, and sweet sorghum (Tao et al. 2011). Currently, E10 is used in the transport sector in the five provinces (Heilongjiang, Jilin, Liaoning, Anhui, and Henan) and 27 cities in Jiangsu, Shandong, Hubei and Hebei (Qiu et al. 2010).

Similar to China, India is one of the fastest growing economies of the world. Thus, the energy input is a strategic component of the national economic activity in India. To study the financial and operational aspects of E5, the local govern­ment presented three projects in 2003. In 2008, the national biofuel policy made the use of E5 mandatory, and it set a target of E20 for 2017. Today, the production of ethanol amounts to 549 million gallons (which is mainly produced from sug­arcane), but the domestic demand is greater. However, despite the projected increases in the domestic demand by 2020, the amount of ethanol production is expected to fulfill this demand.

As in other countries, the diversification of energy sources is an important objective of Canada. The ethanol feedstock source was 70 % corn and 30 % wheat in 2007. According to Balat and Balat (2009), the country reported the seri­ous intention of increasing the development of corn-based ethanol. In 2008, the Canadian government amended the Environmental Protection Act to require the use of E5 in all ground transportation fuels, which naturally increased the demand for it. Canadian ethanol production represented 74 % of the domestic demand in 2013. The current projection indicates the maintenance of these levels of produc­tion, and therefore, Canada would remain a net importer in 2020.

In general, the estimates show increase in the production and consumption of eth­anol. National biofuel policies tend to vary according to both the availability of feed­stock for fuel production and national agricultural policies. With the introduction of new government policies in America, Asia and Europe, the total biofuel (mainly eth­anol) demand could grow to 33 billion gallons by 2020 (Demirbas 2007).

Due to this increasing demand, fluctuations in prices can be expected. Figure 3 shows the ethanol prices and the global ethanol fuel production in recent years. From 2006, when production reached more than 10 million gallons, to 2012, an increase of 119 % was observed in the total production. During the same period, ethanol prices increased 60 % worldwide. From 2006 to 2009, the ethanol prices oscillated at a low rate, namely, between $1.60 and $1.80 per gallon. The ethanol price reached its highest cost in 2011 ($3.33 per gallon), and then it declined until 2012. The local price (in US dollars) for ethanol, which is presented in Fig. 3, showed a similar trend during this period.

New technologies offer considerable potential growth over the coming decades. However, traditional biofuels are expected to play a key role in ramping up the production in many developing countries. Thus, the associated technology is cost — effective and less complex than is the case for advanced biofuels.