America grows its ethanol exports 40%+ in 2024
Written by Jonathan Eisenthal
Ethanol is having a global moment.
Thanks to the U.S. Grains Council, America is growing ethanol exports, taking advantage of a major worldwide turn towards the Farm-based biofuel in the quest to decarbonize transportation energy. More than 100 countries now buy ethanol from America, the world’s largest producer and consumer of ethanol. Exports are on track to reach 1.6 billion gallons in the current marketing year, October 1, 2023-September 30, 2024, according to U.S. Grains Council Director of Global Ethanol Export Development Mackenzie Boubin. That quantity represents a 40 percent increase from the previous year, she said.
The Grains Council ethanol team takes a two-pronged approach, according to Boubin, working with governments and NGOs to advance pro-ethanol policy, and bringing technical teams to countries that are considering or ramping up their ethanol use.
Several major markets, including heavy hitters like Canada, India, and Japan, are markedly increasing their purchases, and some markets like the European Union, which appeared impenetrable, are turning to American-made ethanol.
“The European Union has not been a destination for U.S. ethanol for most of the past decade, but they have come on strong in the last three years. They are now the third largest export destination,” said Boubin. “We are seeing an EU ethanol wave, as various member states are adopting E10. Last year we saw Norway and Austria adopt E10. This year, the Czech Republic and Poland have announced a move to E10. The increase in demand from Europe is very exciting. Even though Europe has focused on EV adoption, they are increasingly favoring ethanol because of this renewable energy directive that really incentivizes low-carbon options.”
Ethanol, time and time again, is the lowest cost, easiest-to-adopt option they can use to meet this renewable energy directive, Boubin said. “It is the same in Canada. Canada released their Clean Fuel Regulation in July of 2022. The lower the carbon in a fuel, the more of a margin they will offer, and on the other hand they will penalize the high-carbon products. We may reach 700 million gallons of exports to Canada this marketing year. They recognize that ethanol is the lowest cost, easiest-to-adopt fuel to meet these regulations.”
Another major market is Japan. Thanks to work by U.S. Grains Council, Japan has adopted well-accepted lifecycle carbon intensity measurements, and this will allow U.S. ethanol producers access to the entire market in Japan, which could increase sales there from 140 million gallons up to as much as 360 million gallons.
Grains Council often works in tandem with local domestic ethanol producers to further increase ethanol blending policies or address infrastructure challenges which contribute to an expanded global success story regarding ethanol use, stimulating additional global demand. While U.S. Grains Council works to also overturn heavy-handed regulations such as tariffs or feedstock or product grade restrictions, there are ample market opportunities. One such case is India, where fuel grade ethanol cannot be imported.
“U.S. ethanol sales in India for industrial purposes are up about 191 percent from the previous marketing year,” Boubin said. “They have hit the 100-million-gallon mark. It comes down to economics.”
Boubin explained that India is increasing its domestic ethanol fuel blend and has committed to move to a 20% ethanol blend by 2025. The plan is to elevate the blend gradually from the current E12 to E15 nationwide and then up to E20.
However, India has a thriving fuel ethanol production industry and the majority of the industrial ethanol exported to that country is for pharmaceutical manufacturing, medicine, cleaning supplies, solvents, the beauty industry.
Brazil, which will serve as host and president of the 2024 G20 meeting, is poised to continue global support for ethanol produced from farm products. They will be the hosts in 2025 of the U.N. Coalition of Parties (COP), the highest profile global organization pursuing the reduction of carbon and other greenhouse gas emissions.
India’s ethanol moves parallel the development of ethanol in the U.S., where farmers in the 1970s and 1980s recognized that goals of clean energy and agriculture could create a mutual benefit. In other places, like the Philippines, the focus is harnessing the high octane in ethanol. There, the government has developed a policy of blending half from domestic-sourced ethanol, and the other half purchased from America, to achieve an E10 national blend. And as of May 2024, they just increased to a discretionary blend level of E20 to begin implementing within the country by the end of the year.
Another market experiencing exponential growth is Singapore, which acts as a gateway to Indonesia, the largest transportation fuel market in Southeast Asia.
“Singapore ethanol imports from the U.S. are up 1100% year on year,” Boubin reported. “It was a top 10 destination in 2022. It’s not a major transportation market, but it is a huge trans-shipment hub for the Southeast Asian region. Our ethanol arrives in Singapore and then gets routed to destinations like Vietnam, Philippines and most importantly, Indonesia. The majority of U.S. ethanol sent to Singapore gets blended into an E3 and sent to Indonesia. We have watched Indonesia develop a taste for this low-cost, high-octane fuel. Because of that, they are conducting pilot programs with the U.S. Grains Council. We have done E5 pilot programs that have gone very well, and now they are looking to transition to E7. This really shows that once you have a successful proof of concept in a country, you increase interest in ethanol.”
While much of the ethanol market focus is on fuel for light-duty vehicles, major opportunities for ethanol are opening in non-road engagements as well, Boubin said.
“We are looking into the maritime sector, and at using ethanol for clean cooking to reduce harmful household emissions from other fuel sources. U.S. Grains Council is exploring how ethanol can play a key role in direct-to-consumer distribution in areas like Mozambique, Kenya, and in India.
With growth in all these ethanol uses, this appears to be more than a bubble in export sales and may mark a permanent realignment of the global energy markets towards an emphasis on ethanol, Boubin said. “The world is catching on to the truth of the slogan used by U.S. Grains Council ethanol team: ‘We are abundant. We are affordable. We are sustainable.”
