Industry Analysis & Industry Trends
The Ethanol Fuel Production industry is running on fumes. The industry has struggled to maintain market share over the past five years as the cost competitiveness of ethanol-blended fuel (EBF) has been squeezed by lower world crude oil prices and falling demand from the Petroleum Refining and Petroleum Fuel Manufacturing industry. The only factor supporting the industry has been continued government subsidisation. A 2014 study by the Bureau of Resources and Energy Economics (BREE) suggested that without this assistance, the industry would collapse as it is otherwise economically unviable to produce ethanol as a substitute for petrol in Australia... purchase to read more
Industry Report - Industry Investment Chapter
The industry has a very high level of capital intensity. The industry uses large plants to ferment crops and produce ethanol. Machinery and pumps are used to transport, process and distribute inputs. Sensors are also used to measure and regulate the chemical compound of ethanol.
Industry depreciation charges, which are a proxy for the capital input to production, are estimated to account for 7.5% of industry revenue in 2015-16, while total wage costs absorb approximately 6.3% of revenue. This indicates the industry allocates $0.84 on capital expenses for every dollar spent on labour input to production. Capital intensity has increased over the past five years on the back of larger investments into output capacity... purchase to read more