Ag Policy Blog

Ethanol Hopes to Open Exports to Japan

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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With the ethanol industry facing market challenges at home with the Renewable Fuel Standard and the E10 blend wall, two ethanol industry groups and a commodity group are on a trade mission to Japan with the hopes of opening up more export opportunities.

In 2014 the ethanol industry had one of its best profits years on record, in large part because of strong export markets. Perhaps the big prize would be to open up export markets to China, but that still faces a number of challenges.

In a joint news release Thursday, the Renewable Fuels Association, Growth Energy and the U.S. Grains Council announced representatives are in Tokyo this week at a time when Japan is launching a review of its national energy policies, including biofuels. The hope is the meeting could yield additional ethanol exports to that nation.

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Jim Miller, chief economist and vice president for Growth Energy said in a news release said the group is hopeful Japan could become a market for U.S. ethanol.

"The team came away with a much greater understanding of the current Japanese requirements and market conditions pertaining to ethanol and began the implementation of a strategy to help ensure that U.S. ethanol receives fair market access under the future energy policy that will be adopted when the current policy expires in 2017," he said.

In addition to meeting with U.S. Grains Council staff located in Tokyo and USDA's Foreign Agricultural Service officials, the team also met with Japanese officials from the Ministry of Economy, Trade and Industry; the Ministry of Agriculture, Forestry and Fisheries; and Japanese Diet member Arata Takebe.

"The United States exported 900 million gallons of ethanol in 2014, supporting both U.S. farmers and the ethanol industry. We know that, going forward, ethanol exports have the potential to grow and become equally beneficial for our customers overseas," said Tom Sleight, president and chief executive officer of the U.S. Grains Council. "USGC, Growth and RFA are committed to launching initiatives in 2015 and 2016 to build demand for U.S. ethanol and address barriers to ongoing imports."

RFA's Director of Regulatory Affairs Kelly Davis: "Japan represents a unique and exciting opportunity for U.S. ethanol exports. However, the opening of markets and trade partnerships don't happen overnight. This trip provided our team with valuable insight and made great first steps to keep ethanol at the forefront of the discussion in Japan. The team will continue examining the requirements of the Japanese sustainability standards, looking for ways to overcome infrastructure concerns and compiling data responding to some of the misinformation government officials still hold regarding renewable fuels."

In 2014, the United States exported a very limited amount of ethanol for industrial uses to Japan, according to the news release. "The U.S. ethanol industry believes there is room to open this market for fuel uses, prompting significant additional imports," the release said.

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Todd Neeley

Todd Neeley
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