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Stakeholders applaud Japan's policy to allow use of U.S. ethanol

Change comes as part of country's update of its existing sustainability policy.

The U.S. Grains Council (USGC), the Renewable Fuels Assn. (RFA), Growth Energy and their member organizations welcomed the news Tuesday that the Japanese government's new biofuel policy will allow imports of ETBE made from U.S. corn-based ethanol.

“The U.S. Grains Council is pleased by this decision and that Japan recognizes these improved benefits of U.S. product. We continue to work around the world, sharing the benefits of U.S. ethanol with other countries that are serious about reducing their GHG (greenhouse gas) emissions,” said Tom Sleight, president and chief executive officer of USGC, which has an office in Japan to work closely with the Japanese government and industry. “From this decision, it is unequivocal that continued improvements in carbon intensity reductions are critical to gain and maintain market access for U.S. ethanol.”

The groups explained that the change comes as part of the country’s update of its existing sustainability policy, approved in 2010, in which only sugarcane-based ethanol was eligible for import and only sugarcane-based ethanol was allowed for the production of ETBE, an oxygenate. 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% reduction, up from 50%, and recognizes corn-based, U.S.-produced ethanol’s ability to meet that goal, even with the higher greenhouse gas (GHG) reduction standard.

Japan will now allow U.S. ethanol to meet up to 44% of a total estimated demand of 217 million gal. of ethanol used to make ETBE, or potentially 95.5 million gal. of U.S.-produced ethanol annually. Japan imports nearly all of the ETBE from ethanol that it uses.

According to the groups, the decision by Japan is based on its evaluation and life-cycle assessment update of U.S. corn-based ethanol. The U.S. industry’s efforts to maximize production efficiency through technological innovations that lead to greater GHG emission reductions for corn-based ethanol and the emergence of co-products like dried distillers grains with solubles have supported this new access to the Japanese market while positively contributing to the feed and energy value chains.

"For the first time, the U.S. ethanol industry will have the opportunity to compete for a portion of Japan’s fuel blending market," Growth Energy CEO Emily Skor said. "This new policy represents a new trade opportunity for the U.S. to continue to work with Japan to demonstrate the economic value, sustainability and environmental advantages of utilizing our product in their consumer market for motor fuels."

U.S. organizations promoting the global use of ethanol will continue to work closely with the Japanese government as it implements its new policy and will provide updated technical information about GHG reductions and other benefits of corn-based ethanol, the groups said.

Since 2014, the U.S. ethanol industry and government have partnered to develop a robust ethanol market development program that demonstrates the environmental, health and economic benefits of ethanol use and why strong ethanol policies include a role for trade.

“We are pleased Japan now allows ETBE imports from U.S. corn-based ethanol, as this opens an important and growing market for American farmers,” RFA president and CEO Bob Dinneen said. “ETBE is an ethanol-based oxygenate frequently used in overseas markets. Japanese consumers will now have access to cleaner, cheaper, American, high-octane fuels. We look forward to beginning a dialogue on how Japan’s new policy could be improved, such as moving towards direct blending rather than having to convert our ethanol into an ether like ETBE, but we certainly welcome Japan’s first step toward the use of U.S. ethanol.”

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