Colombia Imports Of U.S. Ethanol Back On Track Despite CVD

In 2023, U.S. ethanol exports to Colombia experienced a substantial surge, overcoming the Colombian government’s decision in March to extend the countervailing duty (CVD) for an additional five years. Direct exports to Colombia during marketing year (MY) 2022/23 reached 42.3 million gallons, representing an impressive 235 percent increase from the previous year. Colombia secured the eighth position as a top export destination for U.S. ethanol, ranking third in Latin America, following Mexico and Peru.

Colombia re-emerged as a crucial market for U.S. ethanol in MY 2022/23, rebounding from a contraction in 2021 and 2022 attributed to the CVD, reduced blending mandates and macroeconomic challenges, including the devaluation of the Colombian peso. The recovery of U.S. ethanol exports to Colombia in 2023 was propelled by improved economic conditions, a decline in Colombian ethanol production, and an overall surge in biofuel demand. Throughout the year, the Colombian government persisted in reducing state gasoline subsidies, gradually increasing fuel costs. The Ministry of Mines and Energy (MME) adjusted mandatory blending levels, ranging from three to seven percent, eventually stabilizing at seven percent by the end of 2023. Despite challenges, the upward trend in U.S. ethanol exports to Colombia persisted in late 2023. Since May 2020, U.S. ethanol imports have faced a countervailing duty (CVD) of $0.066/kg ($0.052 per liter). The CVD, extended in March 2023 for five years with a review scheduled for 2026, did not hinder this growth.

“Colombia has proposed increasing the mandatory blend to E10 in 2024. We hope the country will fulfill this commitment, and under favorable economic conditions, we may witness a continued upward trend in U.S. ethanol exports in the upcoming years,” said Marri Tejada, regional director of the Council’s Latin America office.

In 2023, the Council actively collaborated with key stakeholders in Colombia to emphasize the benefits of increasing mandatory ethanol blending, particularly to E10, and recognizing the complementarity of ethanol imports, especially in the Northern region. Additionally, the Council is conducting pilot studies on higher voluntary blends to stimulate ethanol demand in the country.