US biofuels part of food, feed global solution

Cleaner burning, higher performing fuels and their nutritious coproducts are valuable at home and abroad, and have the potential to resolve many issues around the globe, writes Tom Buis. This column appears in the September issue of EPM.
By Tom Buis | August 18, 2015

Expanding the market for ethanol and its coproducts is a top priority for our industry. We’ve created programs like Prime the Pump to build out the infrastructure for higher ethanol blends across the country and we’ve partnered with NASCAR for nearly 8 million miles of tough, competition racing to ensure that consumers are educated about these blends when they pull up to the pump.

We’re also looking beyond our borders for market opportunities. Growth Energy has partnered with the U.S. Grains Council and the Renewable Fuels Association to create an Ethanol Foreign Market Development Steering Committee consisting of members of each organization and senior USDA Foreign Agriculture Service officials. With ethanol and DDGS exports representing about 10 percent of industry sales value, it is of critical importance that we actively explore potential new markets and pursue solutions to trade barriers.

The steering committee focuses on providing educational information related to ethanol to our overseas representatives and customers, including USGC and Foreign Agriculture Service staff, initiating additional market assessment missions and engaging with current customers to expand foreign demand through a combination of overseas missions and bringing foreign ethanol industry teams to the U.S.

Teams from the three organizations have participated in exploratory market development missions to China, South Korea, Japan, Mexico, Peru, Panama, the Philippines and Singapore to ascertain the potential to expand the export market for U.S. ethanol. Additional missions are in the planning stage for later this year and into 2016. Mission participants were able to meet directly with foreign private and government sector officials, as well as U.S. officials and USGC staff located in each of the countries, to discuss the advantages increased utilization of ethanol can provide in terms of reduced greenhouse gas and other toxic fossil fuel emissions, enhanced octane and consumer economic benefits.

These efforts have been a resounding success—in 2014, the industry had a record number of DDGS sales overseas and the second highest amount of ethanol exports in history. Through May, U.S. exports of ethanol totaled 377.1 million gallons, up about 5.75 percent compared to the same period in 2014, with a value of $801.2 million. U.S. DDGS exports totaled 4.5 million metric tons for the first five months of the year with an export value of $1.1 billion.

We are working hard to ensure that these numbers continue to grow by expanding the market development efforts launched in 2014 through additional market analysis and development missions. We are expanding our collaboration with USDA and the Department of Commerce, as well as exploring the potential to broaden our industry exposure through activities such as the Asia-Pacific Economic Cooperation forum and the U.S.-China Biofuels Cooperation Memorandum of Understanding.

We have been engaging in market expansion activities for our current trade partners, such as Peru and the Philippines, to support increases in the ethanol blending requirements and assess import constraints, such as infrastructure. We are also participating in technical exchanges and exploratory market development missions to countries that currently do not import U.S. ethanol but could benefit from a cleaner fuel that would improve the environment and reduce toxic engine emissions. Countries that are currently at the top of our list include India, China, Mexico and Colombia.

In addition, we are continuing to pursue solutions to trade barriers such as EU countervailing duties, Colombian and Chinese import restrictions, Brazilian tax increases on imported ethanol and domestic content requirements that limit export potential to many countries. Fair trade is essential, and we are committed to working with the Office of the United States Trade Representative and others to resolve these issues.

As we all know, cleaner burning, higher performing fuels and their nutritious coproducts are valuable at home and abroad, and have the potential to resolve many of the pressing environmental and public health issues faced by our friends across the globe. We are happy to be part of this solution and will continue to feed and fuel America and the world.

Author: Tom Buis
CEO, Growth Energy
[email protected]