Trade mission meetings seek to open South Korea for US ethanol

By U.S. Grains Council | November 27, 2018

U.S. Grains Council and USDA officials traveling as part of a USDA Agriculture Trade Mission met with ethanol industry officials in South Korea earlier this month, urging them to reexamine the outlook for the country’s fuel ethanol use policy.

While the country’s government has resisted use of U.S. ethanol imports for fuel—opting instead to import industrial-use ethanol for windshield fluid and other products—South Korea remains a significant importer of ethanol for break-bulk shipment programs, in which larger shipments of ethanol are sold to neighboring Asian markets in smaller quantities, including the Philippines, Singapore, Vietnam and Japan.

South Korea’s current fuel economy is based on use of MTBE (methyl tertiary-butyl ether) and aromatics, and government officials are reluctant to switch to more environmentally-friendly options due to cost and investment in MTBE unit operations and processing technologies.

“The Korean government has been studying the use of E3 regarding engine performance and fuel quality testing for several years, and the most recent evaluation is expected to be completed in 2019,” said Tim Tierney, USGC regional director for strategy and ethanol in North Asia. “Our challenge is to bring awareness of the benefits that ethanol has over the current standard.”

The mission allowed participants—including Tierney, USGC Director Greg Hibner and Growth Energy consultant and former USGC Ethanol Advisory Team member Jim Miller—to build on and develop new relationships to strengthen the future of ethanol trade between the United States and Korea. The knowledge team members gained will also enhance the U.S. industry’s ability to quickly recognize and react to opportunities and challenges the Korean market presents.

Mission participants briefed USDA Foreign Agricultural Service Administrator Ken Isley, who led the trade mission, on market programs and discussed elevating the awareness of ethanol as an MTBE alternative.

“The timing is right for the Council to invest in a strategic course change in its ethanol market development program in Korea to help achieve our program goal of moving toward an E10 fuel use potential,” said Haksoo Kim, USGC director in Korea.

U.S. ethanol shipments to Korea increased by just over 22 million gallons within the last two full marketing years, from 47.3 million gallons in the 2016/2017 to 69.7 million gallons in 2017/2018.

The Council has worked in South Korea since 1972, primarily focused on the feed grains sector. The country is a strong buyer of U.S. corn, distiller’s dried grains (DDGS), sorghum and barley, supported by the U.S.-Korea Free Trade Agreement (KORUS), which became effective in 2012 and was signed again most recently in September of this year.

Click here to view more photos from this mission.