Renewable fuel standard takes effect in the US

In the United States the first Renewable Fuels Standard (RFS) has taken off on the 1^st of September. This means that all the fuel that will be sold into the road transport market will consist of at least 4.02% of renewable fuels. Various sources report this will be about 4.7 billions gallons. In effect this won’t bring any major changes to the market as ethanol production for 06-07 already was approximately 6 billion gallons. Production is higher than the mandatory amount because ethanol has become cheaper than Rbob gasoline and hence has become a cheap blendstock. With a lot of new ethanol capacity coming on stream in the forthcoming year production is expected to grow even more. The mandate is to increase every year to reach approximately 7.5 billion gallons per year by 2012.