CORN-BASED ETHANOL IN MEXICO, AN UPDATE
As you’re getting to work on planting Illinois’ 2018 corn crop, we’re still hard at work building demand for your 2018 corn harvest. Last year we told you that due to work funded by your IL Corn checkoff, Mexico’s gasoline market would be opened to E10, the regular unleaded just like what we have here in the United States. The impact is equivalent to doubling Mexico’s corn demand.
To recap, the announcement by the Mexican Energy Regulatory Commission (CRE) regarding an increase in the maximum amount of ethanol that can be blended in the Mexican gas supply will provide new market opportunities for IL Corn. The announcement specifically regarded NOM 016-CRE-2016, and increased the maximum volume content on anhydrous ethanol as an oxygenate in regular and premium in gasoline in Mexico, aside from the cities of Monterrey, Guadalajara, and Mexico City. With this change, the accepted percentage blend ethanol in gasoline changed from 5.8% to 10%.
So where are things now?
- The Mexico Energy Reform is being implemented, creating opportunities to modernize the motor fuels industry in Mexico.
- There several legal challenges to the procedures taken to modify the Federal requirements.
- Several major metropolitan areas in Mexico suffer from poor air quality from gasoline emissions. A recent study by the Mexico Petroleum Institute shows that 10% ethanol blends with Mexico gasoline show a benefit and steps are being taken to allow both the introduction of ethanol and an air quality model.
- Industry is responding to the national fuel specification changes by developing new supply lines, infrastructure, and retail stations.
IL Corn continues to leverage your corn checkoff dollars with partners like the U.S. Grains Council to move the ball forward on this demand opportunity. Our industry partners in universities, national laboratories, not-for-profits, and fuel-technologists are having frequent, high-level discussions with Mexican regulatory officials to overcome these final hurdles to opening the Mexican fuel market to E10.