TOP ILLINOIS CORN BUYER TURNS EYE TO ETHANOL IMPORTS
Bloomington, Ill.—Japanese authorities have good news for Illinois corn farmers: the government's new biofuel policy will allow imports of ETBE made from U.S. corn-based ethanol, a decision that was supported in part by research funded with Illinois corn checkoff dollars through the Illinois Corn Marketing Board (ICMB).
“The Illinois Corn Marketing Board is pleased to see that corn farmer investments, made through the Illinois corn checkoff program, have opened a new market for corn-based ethanol to Japan. In fact, a longtime partner in corn lifecycle analysis research, Dr. Steffen Mueller of the University of Illinois Chicago Energy Resources Center is in Japan this week, serving as an expert consultant on the research-driven data that supports the Japanese government’s decision to import ETBE made from corn ethanol,” said ICMB Chairman Paul Jeschke, a farmer from Mazon, Illinois.
“Over time Japan has proven to be a valued export customer of Illinois corn farmers, and now that relationship is being extended to ethanol,” Jeschke continued. “This new export market comes at a perfect time as farm profitability is facing significant challenges as corn prices remain at or below the cost of production in many areas. This new biofuel policy in Japan is certainly a win for corn farmers, but also for Japanese citizens as their tailpipe emissions will be improved by using corn-based ethanol in the production of ETBE.”
This decision by the Japanese government 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 higher GHG emission reductions for corn-based ethanol and the emergence of co-products like distiller’s dried grains with solubles (DDGS) have supported this new access to the Japanese market while positively contributing to the feed and energy value chains.
Dr. Mueller’s lifecycle analysis research is providing baseline information to open other export markets, as well. The U.S. Grains Council is another partner in leveraging corn checkoff dollars to build demand for Illinois corn.
“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 emissions,” said Tom Sleight, president and chief executive officer of the U.S. Grains Council, which has an office in Japan working 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 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 which only allowed sugarcane-based ethanol to produce 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 percent reduction, up from 50 percent, 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 percent of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons of U.S.-produced ethanol annually. Japan imports nearly all the ETBE from ethanol that it uses.
Developing this new market for corn-based ethanol also relied on the work of the U.S. Department of Agriculture Foreign Agricultural Service.