|Tom Sleight, president and chief executive officer of the USGC|
“The U.S. Grains Council is pleased by this decision and that Japan recognizes these improved benefits of U.S. product,” said Tom Sleight, president and chief executive officer of the USGC, which has an office in Japan working closely with the Japanese government and industry. “We continue to work around the world, sharing the benefits of U.S. ethanol with other countries that are serious about reducing their GHG emissions. From this decision, it is unequivocal that continued improvements in carbon intensity reductions are critical to gain and maintain market access for U.S. ethanol.”
The change comes as part of the country’s update of its existing sustainability policy, approved in 2010, in which only sugarcane-based ethanol was eligible for import and which only allowed sugarcane-based ethanol for the production of ETBE, an oxygenate. The new policy calls for an increase in the carbon intensity reduction requirements of ethanol used as a feedstock to make ETBE to meet a 55% reduction, up from 50%, and recognizes corn-based, U.S.-produced ethanol’s ability to meet that goal, even with the higher greenhouse gas (GHG) reduction standard.
Japan will now allow U.S. ethanol to meet up to 44% of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons of U.S.-produced ethanol annually. Japan imports nearly all of the ETBE from ethanol that it uses.
“For the first time, the U.S. ethanol industry will have the opportunity to compete for a portion of Japan’s fuel blending market,” said Emily Skor, CEO of Growth Energy. “This new policy represents a new trade opportunity for the U.S. to continue to work with Japan to demonstrate the economic value, sustainability, and environmental advantages of utilizing our product in their consumer market for motor fuels.”
U.S. organizations promoting the global use of ethanol will continue to work closely with the Japanese government as it implements its new policy and provide updated technical information about GHG reductions and other benefits of corn-based ethanol.
Since 2014, the U.S. ethanol industry and the U.S. government have partnered to develop a robust ethanol market development program that demonstrates the environmental, health and economic benefits of ethanol use and why strong ethanol policies include a role for trade.
“We are pleased Japan now allows ETBE imports from U.S. corn-based ethanol, as this opens an important and growing market for American farmers,” said Bob Dinneen, president and CEO of the RFA. “ETBE is an ethanol-based oxygenate frequently used in overseas markets. Japanese consumers will now have access to cleaner, cheaper, American high-octane fuels. We look forward to beginning a dialogue on how Japan’s new policy could be improved, such as moving towards direct blending rather than having to convert our ethanol into an ether like ETBE. But we certainly welcome Japan’s first step toward the use of U.S. ethanol.”