Washington – As required by the 2007 Energy Independence and Security Act, the Federal Trade Commission has released its analysis on the level of concentration in the US ethanol industry.  As the FTC notes, “Ethanol production has remained unconcentrated over the last year.”

The FTC analyzed available public data on ethanol production, marketing, and the companies that are engaged in each activity provided largely by the Renewable Fuels Association.  The FTC determined “the [ethanol] industry remains less concentrated than it was in 2008.”

Concentration in any industry is calculated using the Herfindahl-Hirschman Index (HHI).  Depending upon the parameters used in various analyses, the HHI’s for ethanol ranged from 208-606.  Ranges for ethanol marketing were from 244-671. 

Based upon relatively large number of companies both producing and marketing ethanol together with new production expected to come online, the FTC concluded “it extremely unlikely that a single ethanol producer or marketer or a group of such firms could successfully exercise market power to engage in price-fixing or other anticompetitive behavior.”

The full FTC report is available here.