USGC: Ethanol education is essential to winning Mexican market

By U.S. Grains Council | March 18, 2019

The key to making informed decisions is education, and that’s just what the U.S. Grains Council’s goal has been regarding increasing demand for U.S. fuel ethanol in Mexico.

After Mexico changed its law in 2017 to allow up to an E10 blend outside of three major cities—Monterrey, Mexico City and Guadalajara—the Council has been fielding questions about the challenges and opportunities with offering ethanol-blended gasoline in the country.

“One of the major challenges has been misinformation propagated by those who have an interest in keeping ethanol out of Mexico,” said Ryan LeGrand, USGC Mexico director. “The opposition has informed service station owners that they will need to spend upwards of $200,000 USD to convert their stations to be able to handle E10. This simply isn’t true.

“Mexican service stations use the same Underwriters Laboratory standards as we do in the U.S., so their underground tanks and pumps are more than capable of handling an E10 blend.”

The Council, in a joint effort with the American Coalition for Ethanol and the Mexican Association of Service Station Equipment Suppliers (AMPES), held seven technical workshops throughout the country in 2018 – from Monterrey and Tijuana to Leon and Oaxaca. The goal was to help educate retailers, station equipment installers and local station owners who want to sell more ethanol-blended gasoline as Mexico’s transportation fuel sector continues to evolve.

“We have educated close to 1,000 service station owners on the use of an E10 blend in their stations,” LeGrand said.

Ron Lamberty from ACE has shared his experiences at each one these workshops and has set owners’ minds at ease with respect to adding this new fuel as an option at their locations. He has also demonstrated to them how they can make money with the inclusion of ethanol, something that gets everyone’s attention.

More than 60 countries have ethanol policies—a number that is growing as countries seek to capture the environmental, human health and economic benefits of ethanol. The Council’s ethanol market development efforts focus on implementing successful local biofuels policies with a role for trade, the benefits that come with using the biofuel and technical information sharing and education.

Current U.S. ethanol exports to Mexico are primarily for industrial uses like perfumes, solvents and beverages, but more retailers in border cities are buying pre-blended E10 at U.S. terminals for resale at convenience stores and service stations. Council programs will continue to focus on helping sellers understand the benefits of increased ethanol use.

U.S. ethanol exports to Mexico have increased by more than 3.5 million gallons between the 2016/2017 and 2017/2018 marketing years, from 27.6 million gallons to 31.1 million gallons, respectively.

Mexico represents a total annual E10 potential market of 1.2 billion gallons for ethanol, which could be fulfilled by growing quantities of locally-produced ethanol and affordable U.S. ethanol to fill in the missing demand.

For more information on Mexico and Ethanol, click here.