Every year, the United States ranks as one of the largest exporters of ethanol in the world, shipping to more than 25 countries around the globe. The top 10 countries receiving U.S. ethanol exports in 2014-&rsquo;15, compiled from various U.S. government sources, are listed below, followed by each one&rsquo;s share of total U.S. exports.
1.&nbsp;&nbsp;&nbsp; Canada &ndash; 30% 2.&nbsp;&nbsp;&nbsp; Brazil &ndash; 15% 3.&nbsp;&nbsp;&nbsp; South Korea &ndash; 8% 4.&nbsp;&nbsp;&nbsp; Philippines &ndash; 8% 5.&nbsp;&nbsp;&nbsp; China &ndash; 8% 6.&nbsp;&nbsp;&nbsp; India &ndash; 6% 7.&nbsp;&nbsp;&nbsp; Mexico &ndash; 4% 8.&nbsp;&nbsp;&nbsp; Netherlands &ndash; 3% 9.&nbsp;&nbsp;&nbsp; Tunisia &ndash; 3% 10.&nbsp;&nbsp;&nbsp; United Arab Emirates &ndash; 3% Following an analysis of U.S. government forecasts for exports of ethanol and foreign government forecasts for imports, I predict these countries will be the top 10 importers of U.S. ethanol in 2016-&rsquo;18, ranked from 1 to 10. The comparison to the 2014-&rsquo;15 ranking is shown in brackets. 1.&nbsp;&nbsp;&nbsp; China (up from 5) 2.&nbsp;&nbsp;&nbsp; Canada (down from 1) 3.&nbsp;&nbsp;&nbsp; Brazil (down from 2) 4.&nbsp;&nbsp;&nbsp; Philippines (holding at 4) 5.&nbsp;&nbsp;&nbsp; India (up from 6) 6.&nbsp;&nbsp;&nbsp; South Korea (down from 3) 7.&nbsp;&nbsp;&nbsp; Peru (not ranked) 8.&nbsp;&nbsp;&nbsp; Mexico (down from 7) 9.&nbsp;&nbsp;&nbsp; Jamaica (not ranked) 10.&nbsp;&nbsp;&nbsp; Singapore (not ranked) While the top 10 countries to which U.S. ethanol producers export their products may vary from year to year, the overall amount of ethanol sold overseas will only continue to increase. The trends from 2014 to 2018 clearly indicate that developing countries, such as China, Brazil, India and South Korea, will require more and more ethanol from the United States as demand for fossil fuel replacements continues to grow and governments enact more stringent renewable fuel standards. Even though ethanol exports to Canada and Europe may stagnate or decline, the demand for ethanol from the world&rsquo;s largest developing nations will secure the place of the United States as one of the leading ethanol exporters for years to come. From that vantage point, the future of ethanol exports from the United States is very bright indeed. --------------------------------------------------------------------- 1,000 metric tons ethanol = 335,000 gallons 1,000 barrels = 42,000 gallons 1,000 liters = 264 gallons&nbsp;&nbsp; ---------------------------------------------------------------------
CHINA U.S. exports of fuel ethanol to China are expected to grow exponentially in the next two years.&nbsp; China&rsquo;s 12th Five-Year Plan, which ended Dec. 31, establishes the goal of producing 4 million tons of ethanol, but the 2016 forecast for domestic ethanol production is set at only 2.5 million tons. This leaves a shortfall of 1.5 million tons of ethanol that will have to be imported in 2016-&rsquo;18.&nbsp; Furthermore, ethanol imported into China is far cheaper than domestically produced ethanol because of China&rsquo;s relatively high domestic corn prices.
CANADA U.S. exports of ethanol to Canada will remain relatively steady in 2016-&rsquo;18, with a slight increase at the end of 2017.&nbsp; The economic slowdown in Canada due to low oil prices is expected to reduce demand for imported ethanol. In addition, lower rates of discretionary blending will result in a decline in imports from the United States.
BRAZIL U.S. exports of ethanol to Brazil will rise significantly in 2016-&rsquo;18. The Brazilian federal government has recently raised federal taxes on gasoline, which will increase the competitiveness of ethanol as compared to fossil fuel.&nbsp; Furthermore, some Brazilian cities and states have reduced the tax on ethanol, which will further stimulate ethanol imports.
PHILIPPINES U.S. exports of ethanol to the Philippines will decline significantly in 2016-&rsquo;18.&nbsp; Higher tariffs on ethanol imported from the United States, as compared to tariffs on ethanol imported from Asian countries, are expected to continue to put U.S. ethanol imports at a distinct disadvantage.&nbsp; The amount of U.S. ethanol imported into the Philippines may decline by as much as 16 percent.
INDIA U.S. exports of ethanol to India will increase dramatically. Imports of ethanol are expected to reach 440 million liters in 2016 and 700 million liters in 2017, a year-to-year increase of 36 percent.&nbsp; The United States will continue to be the largest exporter of ethanol to India.&nbsp; In 2016-&rsquo;18, imported ethanol will sell at about the same price as domestically produced ethanol.
SOUTH KOREA U.S. exports of ethanol to South Korea will see a slight increase in 2016-&rsquo;18. The increased use of ethanol, both domestic and foreign, will play an important role in South Korea&rsquo;s goal of cutting greenhouse gas emissions in the next decade. In addition, South Korea is expected to put in place more stringent renewable fuel standards and increase its ethanol tax credits in the next few years.
PERU U.S. exports of ethanol to Peru will rise slightly in 2016-&rsquo;18, allowing Peru to break into the top 10 countries for ethanol from the United States. Ethanol imports are forecast at 80 million liters by the end of 2016, an increase of 5 million liters over 2015.&nbsp; At the same time, domestic ethanol production is expected to decline by 33 percent from 2015 to 2016.
MEXICO U.S. exports of ethanol to Mexico will decline significantly in 2016-&rsquo;18. Ethanol continues to be more expensive than its petroleum-based equivalents in Mexico, which means that its current use is limited to research projects only.&nbsp; A government subsidy for ethanol would correct this situation, but there does not seem to be any political support for this measure in the near future.
JAMAICA U.S. exports of ethanol to Jamaica will grow substantially in 2016-&rsquo;18. Jamaica currently has an E10 mandate that will increase the need for imported ethanol in the coming years. This is good news for the United States, which is and will continue to be the leading exporter of ethanol to Jamaica.
SINGAPORE U.S.&nbsp; exports of ethanol to Singapore will hold steady in 2016-&rsquo;18. In the countries of Southeast Asia that purchase their ethanol from Singapore, the relatively low cost of imported ethanol will drive greater demand for discretionary blending.&nbsp; In the future, larger amounts of imported ethanol will be required in order to achieve the environmental goals mandated by the countries that rely on Singapore for their ethanol.
Author: Richard Weiner Vice President, Biofuels Practice Group Chair Fredrikson &amp; Byron PA rweiner@fredlaw.com 612-492-7000
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

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Contributing writer Weiner charts the trends in top ethanol importing countries. This story also appears in the February print issue of Ethanol Producer Magazine. 

Bright Future Ahead for Ethanol Exports

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