Council Applauds Japan’s Decision on Ethanol

Before 2018, Japan used only ethanol imported from Brazil for use in automobile fuels. This decision was based on an outdated calculation of greenhouse gas (GHG) emission reduction, which effectively excluded U.S. ethanol. In 2018, the U.S. Grains Council worked with the Japanese government to update the GHG calculation for U.S. ethanol. This resulted in the Japanese government allowing up to 44% inclusion of U.S. ethanol in the fuel sector which translates into 96 million gallons of U.S. ethanol.

Working in collaboration with USDA FAS/Japan and with the Ministry of Economy, Trade, and Industry (METI), the Council was able to raise the inclusion rate twice more – in 2020, it was raised from 44% to 66% and in 2023, U.S. ethanol was given full access to the Japanese fuel ethanol market. These changes were brought about by broad collaboration with FAS and other U.S. Government agencies including U.S. Embassy in Japan and U.S. Trade Representatives to deliver updates on continued improvement in reduction of carbon emission by the U.S. ethanol industry. As a result, Japanese METI revised the U.S. corn ethanol carbon intensity score that allows U.S. ethanol to fully access the entire bioethanol market.

The Council invested a combination of MAP and ATP funding from 2018 to 2023 to open a market that was completely closed to U.S. ethanol. As of 2023, this new market opportunity is worth 217 million gallons of U.S. ethanol annually with an approximate value of $434 million.