The U.S. Grains Council (USGC) worked closely with the Japanese Ministry of Economy, Trade and Industry (METI) to revise its biofuel policy issued in April 2018, paving the way for near-term imports of ETBE (ethyl tertiary butyl ether) made with nearly 100 million gallons of U.S. ethanol and potential additional policy change to allow for U.S. ethanol as part of a nationwide blending mandate.
Using information provided by the Council, METI modified its policy in April 2018 to allow U.S. corn-based ethanol in the market based on technological advancements that raised the greenhouse gas (GHG) reduction level of U.S. corn-based ethanol.
To achieve this result, the Council provided information on the latest updates on the U.S. bioethanol industry’s technology related to GHG emissions through a METI-designated expert committee outlining new policy in a report delivered in spring 2018. As a result, the Council successfully opened the market as of the start of 2018 Japanese fiscal year.
The new policy calls for an increase in the carbon intensity reduction requirements of ethanol used as a feedstock to make ETBE to meet a 55 percent reduction, up from 50 percent, and allows corn-based, U.S.-produced ethanol, even with the higher GHG reduction standard, to fulfill up to 44 percent of the total estimated demand of 217 million gallons of ethanol used to make ETBE – potentially 95.5 million gallons of U.S.-produced ethanol annually.
The first shipment of U.S. ETBE arrived in Japan in July 2019, signaling the opening of a new $38 million-per-year export market for U.S. ethanol.
These efforts were also a critical step toward the possibility of U.S. ethanol being used in Japan for direct fuel blending. Currently, Japan uses 217 million gallons of fuel ethanol per year. Historically the Japanese market favored Brazilian ethanol at the expense of U.S. ethanol because of outdated GHG calculations. With a market fully open to U.S. ethanol for fuel, E10 in Japan could mean a potential 1.3 billion gallons of U.S. ethanol sales.
The Council invested $775,000 over the past three years to open this market, creating a return on investment (ROI) of $49 per $1 of MAP funds invested.
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.