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Understanding the failures in developing domestic ethanol markets: unpacking the ethanol paradox in Guatemala

Cutz, L; Tomei, J; Nogueira, LAH; (2020) Understanding the failures in developing domestic ethanol markets: unpacking the ethanol paradox in Guatemala. Energy Policy , 145 , Article 111769. 10.1016/j.enpol.2020.111769. Green open access

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Abstract

Fostered by environmental and economic drivers, liquid biofuels are expanding in the global energy matrix. However, many countries with biofuel potential, such as Guatemala, have yet to develop domestic biofuels markets. During the last decade, ethanol production in Guatemala has increased significantly, yet a domestic market does not appear to be in the horizon. It is a kind of paradox: a world class sugarcane producer and ethanol exporter does not use any blend of ethanol and gasoline in vehicles. This paper presents a techno-economic analysis and review of barriers that have delayed ethanol-gasoline blends in Guatemala. The cost assessment considers data from an existing distillery in Guatemala. Results show that Guatemala could produce annually a maximum of 250 million liters of ethanol from molasses, more than the amount required to introduce E10. For the current conditions, results from the modelling indicate that the cost of ethanol has minimal impact on the price of E10, but taxes could represent one third of the cost of E10 at the retail level. Since supply conditions are favourable and technical barriers are not relevant, strong government intervention and a coherent price structure for ethanol-gasoline blends is needed to create an ethanol market in Guatemala.

Type: Article
Title: Understanding the failures in developing domestic ethanol markets: unpacking the ethanol paradox in Guatemala
Open access status: An open access version is available from UCL Discovery
DOI: 10.1016/j.enpol.2020.111769
Publisher version: https://doi.org/10.1016/j.enpol.2020.111769
Language: English
Additional information: This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources
URI: https://discovery.ucl.ac.uk/id/eprint/10105329
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