THE foot is coming off the accelerator in support for the biofuels industry in the US.
AgResource president Dan Basse told the annual Australian Grain Industry Conference in Melbourne this week the cost of biofuel subsidies and the car industry's move towards electric cars were behind the new direction.
"The political will for biofuels is beginning to wane,'' he said.
"The biofuels industry is now mature.''
Mr Basse, founder of the Chicago-based market research company, said the US had now hit "the blender's wall''.
He said the ethanol blend ratio had hit 10 per cent and biofuel refiners were now having to export ethanol because the US market was saturated.
"They have asked the US Government to increase the blend rate to 15 per cent,'' he said.
Mr Basse said US ethanol production should taper off during the next two years after a period of rapid growth.
US ethanol refining had now topped 51 billion litres a year - or about 9.6 per cent of the country's petrol use.
Ethanol production now accounted for 43 per cent of the US corn crop.
Mr Basse said any rise in ethanol refining would now be met by productivity gains in corn yield.
"For the first time, we will see the US ethanol demand met by increases in corn yield,'' he said.
"We won't have to bring new acres into production.''
