USGC ethanol export program yields results in Peru

By U.S. Grains Council | December 17, 2015

The U.S. Grains Council’s ethanol export promotion program has seen an early success with a U.S. exporter confirming sales of 10 million gallons of U.S. ethanol to Peru—valued at more than $15 million—following a trade team’s visit.

Earlier this year, the council led a team of Peruvian ethanol buyers and producers to participate in the International Fuel Ethanol Workshop in Minneapolis and visit ethanol production facilities and trading companies in Iowa, Illinois and Texas.

“The conference and visits provided the ethanol buyers with the opportunity to see the reliability of U.S. ethanol production and learn more about the price competitiveness of U.S. ethanol exports,” said USGC Manager of Ethanol Export Programs Ashley Kongs, who traveled with the team.

This team was made possible by the partnership of the Council, the Renewable Fuels Association, Growth Energy and the USDA’s Foreign Agricultural Service, which are working together to promote U.S. ethanol sales around the world. It was also sponsored in part by the Ohio Corn and Wheat Growers Association.

“This success was due to recent policy changes in Peru’s energy sector, creating new demand for ethanol in this market,” said USGC Chief Economist Mike Dwyer. “While Peru has a few modern ethanol production facilities, domestically-produced ethanol is still a relatively new industry. While it develops, Peru’s growing appetite for ethanol can be met with imports from the United States.”

In 2008, Peru established its renewable energy portfolio standard with the goal of creating an energy system that was sustainable and reliable. Four priorities make up the heart of the strategy: implementation of measures that will increase energy efficiency; continued development of the country’s natural gas industry; integration of electricity markets in the Latin American region; and minimization of environmental impact in part by expanding the use of low-carbon technologies.

Just two years later, in 2010, Peru began requiring a 7.8 percent ethanol blend in its conventional gasoline.

“As a result of the U.S.-Peru free trade agreement (FTA), Peruvian trade barriers to U.S. goods, services and investments have been reduced, making the United States a prime choice for becoming the long-term supplier of ethanol to this market,” Dwyer said. “We will continue building on this success through buyers teams, workshops and providing important market information that will build the confidence of Peru’s energy industry in U.S. ethanol.”

Click here to read more about the Council’s efforts to promote ethanol export