Ethanol trade groups participate in USDA trade mission to Mexico

By Erin Voegele | May 24, 2016

The USDA has announced an ethanol trade mission to Mexico May 24-25. Acting Deputy Secretary Michael Scuse will lead a team of leaders in the U.S. ethanol industry to explore opportunities to expand each country’s renewable energy sector.

"Our goal is to partner with Mexico to support the establishment of an economically viable ethanol industry there, where Mexican domestic production can be supplemented with imported product from the United States," Scuse said. "The increased use of ethanol in the North American fuel market will provide citizens from both countries with an inexpensive source of renewable energy that improves air quality, reduces greenhouse gas emissions, and stimulates the rural economy."

"Mexico, with the right policies in place, has the potential to achieve similar benefits producing ethanol from sugarcane," Scuse continued. "We view this as a partnership that can provide benefits for both Mexico and the United States."

According to the USDA, the U.S. currently produces more than half of the world’s supply of ethanol and currently blends more than 14 billion gallons of ethanol into its transportation fuel each year. The ethanol industry has also been an important driver of rural economic growth since 2007. The industry currently takes in 5 billion bushels of corn each year, and returns nearly $20 billion to the U.S. farm economy annually.

Those participating in the mission will meet with government officials, legislators and members of private industry to share their experiences regarding both ethanol production and the development of policies to support renewable fuels. The goal is to demonstrate how Mexico can implement its own renewable fuels program.

Mission participants include representatives of the Renewable Fuels Association, Growth Energy and the U.S. Grains Council. According to information released by the RFA and Growth Energy, PEMEX, a state-owned oil company in Mexico, plans to begin selling an E6 blend of ethanol in select cities in the states of Tamaulipas, San Luis Potosi, and Veracruz. If implemented nationwide, the trade groups estimate E6 could create a potential market for 790 million gallons of ethanol.

“The U.S. is the world’s largest producer of ethanol and for several years now has been the low cost supplier as well, allowing us to dramatically increase our exports. With domestic use artificially capped by EPA at 14.8 billion gallons, we will continue to seek export opportunities,” said Renewable Fuels Association General Counsel Ed Hubbard, who is on the trade mission. “The world is short on octane and looking for low carbon alternative fuels to meet the climate change goals set in Paris last December. This is the right time to explore new trade opportunities. Mexico, in particular, should be looking for replacements to the highly toxic MTBE. Ethanol can help.”

“This trade mission is an excellent example of the importance of ethanol to the success of nations looking to reduce their imports of harmful fossil fuels in favor of a cleaner burning and a more economical fuel,” said Growth Energy CEO Emily Skor. “It is also equally important to our goal of expanding the marketplace for U.S. ethanol, which is why we’re proud to be participating in this mission.”

“With the current reform to energy regulations in Mexico, the U.S. Grains Council believes that now’s the time to introduce ethanol into the Mexican fuel market in hopes of it one day becoming the principle oxygenate used in the country,” said Ryan LeGrand, USGC director in Mexico. “We see significant potential for exports of U.S. ethanol to Mexico—and therefore, U.S. grain demand—if the right policies are in place.”