The U.S. Grains Council (USGC) invested $400,000 of Market Access Program (MAP) funds into its global ethanol export promotion programs in 2015. One of the targeted markets for the Council’s promotion efforts included China, where ethanol has the potential to help the Chinese government overcome severe air quality problems in the urban environment. As a result of these efforts, buyers in China purchased $229 million worth of U.S. ethanol, for a return on investment (ROI) of $570 for every $1 of MAP funds invested.
The first program occurred in 2014 when USDA Undersecretary Michael Scuse led a trade team to discuss how U.S. ethanol could help China address greenhouse gas (GHG) emissions and air quality concerns. The Council and its industry partners helped organize this team and participated in the mission. During meetings with petroleum companies and COFCO, team members explained the supply-demand and price situation; how U.S. ethanol could help meet China’s growing demand; and the quality specs of U.S. ethanol. The mission focused on how the U.S. and Chinese ethanol industries could cooperate in the future.
This trade mission was followed up in 2015 by USGC- sponsored environmental workshops held in Beijing and various cities in China. The speakers are the workshops explained how poor air quality in Chinese cities could affect the respiratory health of Chinese citizens and how blending ethanol into the gasoline pool could help mitigate the problem.
During both of these events, there was virtually no exports of U.S. fuel ethanol to China. That changed in the fall of 2015 when U.S. ethanol exports to China started to increase. Eventually U.S. ethanol exports increased during the seven months to 500 million liters (132 million gallons), valued at $229 million. This virtually tied China with the traditional top U.S. ethanol market, Canada.
To build off of this success, the Council and its partners are planning to ramp up its ethanol promotion programs in China in 2016 & 2017.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.