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USGC looks to ethanol potential in Asian markets

A team from US Grains Council (USGC), a US grains export advocate, and two ethanol industry representatives have completed an overview of ethanol’s possibilities in East Asian markets.

The group traveled to Japan, Korea, and Taiwan is December 2015 to review the ethanol markets in these countries and evaluate potential for ongoing US ethanol export promotion programmes in the region.

The team visited quasi-governmental organisations, government agencies, industry experts, and representatives to discuss possible in-roads for US ethanol.

“The United States exported more than 870 million gallons of ethanol during the 2014/2015 marketing year, but there is room for more,” said USGC chief economist Mike Dwyer.

“Asia – and particularly Japan, Korea, and Taiwan - offer some exciting opportunities for US ethanol exports. However, demand doesn’t happen on its own, we have to build it from the ground up.”

While in Japan, the group’s discussions dove into greater depth on constraints that had been uncovered during past missions and potentials ways to overcome them.

“We examined the requirements of the Japanese sustainability standards, looked at ways to overcome infrastructure concerns, and scrutinised our core messages for ways to overcome misperceptions of renewable fuels,” Dwyer said.

“We believe through workshops, seminars and building relationships with key stakeholders in the Japanese market, we can generate potential interest for US ethanol exports there.”

But building the necessary relationship may take time and Dwyer calls for keeping a sharp eye on the market environment, particularly as Japanese petrol usage is expected to drop in the next decade.

The group also visited Korea where a national mandate calling for 2.5% biodiesel blending was put in place at the end of July 2015.

“While the new requirements don’t specifically require ethanol, we believe with some basic USGC programming, such as trade teams, we can develop Korean interest in US ethanol and create demand for it as a fuel source,” said Dwyer.

The final stop was in Taiwan, which has primarily been using fuel ethanol produced from sugarcane from other global exporters.

“We hope to start providing targeted messaging to our key contacts in Taiwan to build this market’s confidence in the US’ ability to provide a clean-burning renewable fuel source,” Dwyer said.

“However, with recent elections in Taiwan, this messaging may be most effective when the newly-elected officials take office later this year,” he concluded.

The Asian mission was part of an effort to ramp up ethanol promotion programmes managed by the USGC and its partners at Growth Energy, the Renewable Fuels Association, and US Department of Agriculture’s Foreign Agricultural Service.

Across the globe, the group is undertaking work to establish contacts and initiate efforts to increase commitments to biofuels, as well as to address regulatory barriers to US ethanol imports and build public confidence in ethanol as a desirable renewable fuel source.





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