NEW YORK ( TheStreet) -- As governments continue to place an emphasis on renewable energy, many suggest that the future prospects for corn and sugar cane-based ethanol is promising giving support to the Teucrium CORN (CORN), PowerShares Global Agriculture (PAGG), Market Vectors Agribusiness (MOO) and ELEMENTS MLCX Biofuels ETN (FUE).
In Brazil, the main source of fuel in automobiles is already ethanol as most of the nation's vehicles used for transportation can either run solely on ethanol or utilize a flex-fuel system which uses a mix of gasoline and ethanol. The success of Brazil's use of ethanol has many other nations looking at it as a viable power source.
In Sweden, which has the highest number of ethanol stations in the EU, a law has been enacted which requires every gasoline station in the country to provide an alternative fuel. Furthermore, oil companies in Australia have started to provide E10 fuel -- a blend of 90% petroleum and 10% ethanol -- in gas stations, and Thailand has started actively selling E20, an 80/20 blend of petroleum and ethanol, as well as E85 fuel blends.
The trend toward using ethanol has even emerged in the world's two largest energy consumers. China, the world's second largest energy consumer, has started to embrace the idea of an ethanol blended fuel that would be used in automobiles and has started conducting preliminary implementation in five major cities.As for the U.S., the Renewable Fuels Association reports that U.S. demand for ethanol is at an all-time high and is expected to continue to grow as the importance of cleaner energy sources remains intact as the U.S. Environmental Protection Agency (EPA) has increased the amount of ethanol that can be blended into gasoline by 15%, up from 10%, for cars and light trucks built in 2007 or later. In a nutshell, it appears like Biofuels are going to be a significant part of the road transport fuel mix going forward and the aforementioned ETFs are likely to feel the effects.