PROFILE: PETROJAM ETHANOL LIMITED
A subsidiary of PETROJAM Limited, PEL operates a 41.8 million US gallons per year ethanol plant and is a main player in the ethanol market. The company is primarily involved in the procurement of hydrous ethanol feedstock, its dehydration, and the provision of ethanol to PETROJAM for the blending of E-10 gasoline and the exporting of fuel ethanol to the United States under the Caribbean Basin Economy Recovery Act, 1983.
Under the Act, PEL is eligible for duty exemption in the supply of fuel grade ethanol to the U.S.A under a quota which changes annually for eligible countries.
Since 2009 the regional ethanol market has experienced a major downturn owing to changes to the Caribbean Basin Economy Recovery Act, 1983. This has resulted in Brazil being able to sell ethanol directly into the US market without the need for third party entities such as PEL. Consequently, PEL’s profitability has declined and its major business outside of supplying ethanol to PETROJAM has become the tolling of ethanol (i.e. the processing of ethanol for third parties).