Markets Wired

The market for fuel ethanol in the United States is unconcentrated, and the industry is less concentrated today than it was ten years ago, according to the Federal Trade Commission’s 2014 Report on Ethanol Concentration.

Required by the Energy Policy Act of 2005, this is the FTC’s tenth annual report on ethanol market concentration. It concludes that U.S. ethanol concentration, as measured by either production capacity or actual production, has increased slightly since last year, but remains low. As of September 2014, 148 firms currently produce ethanol or likely will begin production within the next 12 to 18 months, down slightly from 156 firms at the time of the FTC’s 2013 Report on Ethanol Market Concentration. The largest ethanol producer’s share of domestic capacity is 10.9 percent, unchanged from its percent share in 2013.

The low level of concentration and the large number of market participants make it unlikely that individual ethanol producers or marketers, or a group of such firms could exercise market power or coordinate on price or output levels. Imports and relatively low barriers to entry also serve to constrain individual companies or groups of companies in the United States from controlling prices or output.   

The 2014 Report was submitted to Congress and the Administrator of the U.S. Environmental Protection Agency, as required by law. The Commission vote to issue the report, which was prepared by the staff of the Bureaus of Competition and Economics, was 5-0. (FTC File No. P063000; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702)

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.