Driving Opportunities to Expand the Market

FROM THE JANUARY ISSUE: Growth Energy continues focus on growing markets for ethanol.
By Emily Skor | December 21, 2018

As we ring in the New Year, Growth Energy is laser-focused on continuing to grow markets—both domestic and foreign—for American ethanol. The biofuels industry has positioned America as a global leader in clean energy production, and the task now at hand is to make sure our biofuel gallons have a place to go.

Securing the ability to sell E15, a fuel blend with 15 percent ethanol, year-round and facilitating the widespread adoption of higher blends remains one of our top priorities. After all, nationwide adoption of E15 delivers 7 billion gallons of new ethanol demand. Our rural America activation in pursuit of that goal helped secure a landmark year-round E15 announcement from the president last October. Since then, we have continued to lead industry advocacy efforts with the White House, U.S. Department of Agriculture, and EPA to ensure we see timely implementation of the president’s promise. We expect a proposed rule in February, followed by a public hearing and comment process. President Donald Trump’s administration has clearly stated its intention to have a rule in place by June 1—when the 2019 summer driving season begins. Our opponents will try to derail the process and we will remain vigilant in preventing these attempts by providing EPA with the most sound legal and technical defense of the rulemaking.

While we fight for domestic market growth, there are also myriad opportunities abroad. We have identified six key markets—Brazil, Canada, China, India, Japan and Mexico—that can greatly improve ethanol’s market access and potentially secure billions of new gallons in biofuels demand. Already, the global blend rate outside of the U.S. and Brazil, the world’s top ethanol consumers, has reached 3.2 percent, and that number is expected to grow. Many of our key export markets have already begun implementing blending mandates for fuel ethanol. Growth Energy is working closely with our counterparts in those countries to ensure proper implementation and best practices, particularly in China, Canada and Brazil.

Additionally, a global E10 blend could bring a potential new 13 billion gallons of ethanol demand from other countries outside the U.S. and Brazil. However, reaching those heights will be difficult with trade barriers restricting market access to countries like China, so we’re extending ourselves as a resource to assist China with its 2020 E10 rollout plan. Despite barriers, we exceeded 2017’s record-high American ethanol export totals, indicating a growing international demand for a cleaner, more affordable fuel alternative. Exciting opportunities like the development of ethanol policies in Canada and Brazil present natural touchpoints for us to help build new markets from the ground up, and we are continuing our work with our Brazilian and Canadian partners to do just that. Meanwhile, Mexico is currently evaluating whether its three largest cities will be permitted to blend E10, and our global trade team is coordinating with them regularly to make that a reality.

In addition to clearing a path for greater domestic adoption of higher blends and facilitating new market development abroad, positioning our industry for the RFS reset will be another critical focus in 2019. The reset provision was written into the Renewable Fuel Standard as a mechanism to reevaluate blending targets for starch ethanol, advanced biofuel and cellulosic ethanol relative to current blending levels, while considering a range of factors from expected rate of future production to environmental impact and cost to consumers, among others. The RFS is one of our country’s greatest success stories, helping revitalize rural America. It provides tremendous benefits in terms of job creation, energy security, and environmental performance. We will continue to work with EPA to keep moving the RFS forward, just as the president has promised.

Expanding markets for the industry will be the driving force behind everything we do this year in the ongoing effort to provide maximum value for our members and help them recover from depressed margins. Our organization is energized by the prospect of working with and on behalf of the biofuels industry to capitalize on the significant growth opportunities that lie ahead, both at home and overseas.
 


Author: Emily Skor
CEO, Growth Energy
202.545.4000
eskor@growthenergy.org