April 04, 2023

Japan to increase access to U.S. ethanol



A rule proposed by the Japanese government could open the gate for more imports of American ethanol, according to U.S. officials.

Japan's Ministry of Economy, Trade and Industry on March 30 released proposed language related to its Act on Sophisticated Methods of Energy Supply Structures that calls for improving the carbon-intensity score of corn ethanol produced in the U.S. 

If approved, the rule would remain in place through 2028 and largely allow the U.S. ethanol industry to fully access the Japanese bioethanol market, which previously limited American access to 66% in 2021.

“We applaud Japan for publishing its new biofuels policy, which will help promote a cleaner, more sustainable energy future," USDA Secretary Tom Vilsack said in a March 31 statement.

"This new policy is also a big win for American farmers and our rural economy, as it will expand U.S. biofuel producers’ access to the Japanese market," Vilsack said. 

According to figures provided by the Office of the United States Trade Representative, the changes could increase annual exports of U.S. ethanol to the East Asian island country by over 80 million gallons, valued at an additional $150 to $200 million. 

Japan's target volume for bioethanol use is set at 217 million gallons per year, with an ethanol blend level of 1.9% in the form of ethyl tert-butyl ether (ETBE). 

The U.S. Grains Council estimates U.S. ethanol totaled about 140 million gallons of ETBE during the 2021-22 marketing year.

It released a joint statement along with the Renewable Fuels Association and Growth Energy celebrating the policy change and committing to "engage" with Japan on expanding its use of on-road ethanol and sustainable aviation fuel.

"Countries around the world are recognizing that biofuels like ethanol are a simple, inexpensive and effective solution they can deploy today to help them lower their carbon emissions and meet their climate goals," the groups said. 

USTR Ambassador Katherine Tai in a statement framed the proposed rule as the "latest sign of a strengthened partnership between our two countries," with her office adding it came about  through "extensive engagement" by the Biden administration.

The rule also comes after U.S. Sen. Tammy Duckworth, D-Hoffman Estates, in February led a delegation to Japan and met with auto manufactures, and other business and government leaders to advocate for U.S. biofuels. 

Duckworth in a statement to FarmWeek said she was "pleased with Japan's decision to expand access for all U.S. biofuels in the Japanese market" following those conversations.

"This change will help promote cleaner and more sustainable energy while helping support our farmers and growing the U.S. — and Illinois’s — economy," Duckworth said. "Illinois is ready to help bring our world into the future — and I’m going to do everything in my power to make sure the whole world knows it.”

By:  Timothy Eggert