DDGS U.S. Grains Council

USGC explores potential for ethanol use in Indonesia, Thailand

Indonesia projected to be sixth-largest market for gasoline by 2022.

Representatives from the U.S. Grains Council (USGC) recently traveled to Indonesia and Thailand to visit with ministry and industry officials there and gain a better understanding of the opportunities for and challenges to expanded ethanol use in both markets.

USGC said its work in Thailand and Indonesia is part of a larger effort to engage with government and industries to assist in developing biofuel policies with a role for ethanol trade.

“Indonesia is forecast to be the sixth-largest gasoline market by 2022,” said Brian Healy, USGC manager of ethanol export market development. “Additionally, Indonesia has a goal for renewables to represent 23% of their energy mix by 2025 and to reduce greenhouse gas (GHG) emissions by 29% by 2030. Ethanol has a great opportunity to help Indonesia meet these ambitious goals.”

Indonesia instituted a national ethanol policy in 2006, but the mandate has gone largely unmet, USGC noted. As such, the organization engaged with Indonesia ministry officials in December to highlight the role policy and trade play in helping develop a consistent supply chain for biofuels as well as capture the societal benefits of biofuels with regard to air quality and GHG emission reductions.

For example, USGC said according to a life-cycle analysis study released by the U.S. Department of Agriculture in January 2017, GHG emissions associated with producing corn-based ethanol in the U.S. are 43% lower than for gasoline on an energy equivalent basis. Additionally, U.S. corn-based ethanol is expected to help reduce emissions by more than 50% domestically in the next five years.

The mission also highlighted the competitiveness of U.S. ethanol as an octane enhancer compared to MTBE (methyl tertiary-butyl ether), aromatics or other sources.

Following meetings in Jakarta, Indonesia, the council traveled to Thailand to assess opportunities for biofuels in that market. Thailand has an effective national blend rate of 12% utilizing domestically sourced sugarcane and cassava-based ethanol. Domestic ethanol production is expected to total nearly 360 million gal. in 2017.

“Thailand has successfully differentiated ethanol products to consumers at the pump by using price incentives across grades of fuel and incentivizing the use of flexible-fuel vehicles,” Healy said. “Thailand also produces flex-fuel vehicles for its own domestic market and for export to regional markets. As a result, Thailand is a good collaborator to discuss engine technology and biofuels policy with regional partners.”

The partnership opportunities in Thailand and Indonesia are part of USGC’s work to engage with government and industries around the world to develop biofuel policies.

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