USGC supports Bolivia’s plan to establish E10 mandate

By U.S. Grains Council | January 07, 2019

The U.S. Grains Council organized the first Ethanol Summit of the Americas (ESOTA) in fall 2017 to engage high-level ministry and industry officials throughout the Western Hemisphere in discussions about ethanol policies with a role for trade and regional collaboration among governments and ethanol industries.

The Council invited representatives from the Bolivian Ministry of Hydrocarbons and the Bolivian ethanol industry to this event, offering the opportunity to engage with the Bolivian ethanol industry and initiate a long-standing relationship between the Council, the Bolivian government and alcohol producers.

The Council learned from the Bolivian Minister of Hydrocarbon about the increased fiscal expenditure due to gasoline subsidies and the possibilities to solve this gap through blending ethanol. The country consumes 1.6 billion liters of gasoline per year, with 80 percent is covered by local production. Prices of gasoline are subsidized and have remained at 54 cents per liter for regular gasoline since 2005, while consumption of gasoline has increased 8.4 percent per year, thus increasing the fiscal gap associated with subsidies.

Before ESOTA, the Bolivian alcohol producers participated in a pre-tour, traveling throughout Missouri to get a firsthand view of U.S. ethanol production and the distribution system. At this time, participants expressed interest in learning about the U.S. ethanol industry’s capabilities to become a reliable source of energy in the United States. The two companies producing alcohol for industrial purposes in Bolivia see ethanol as an opportunity to enhance the agriculture production in Bolivia. Sugar cane acreage is about 150,000 hectares and is expected to increase up to 330,000 hectares with the E10 blend mandate. The investment to produce ethanol for fuel is about $800 million to establish crops, obtain machinery and expand current facilities to produce and store ethanol anhydrous.

The Council proposed an ethanol seminar in Bolivia to share the team’s experience at ESOTA and to generate interest in implementation of an ethanol program, including a blending program, in the country.

Within 90 days, the Council, the Bolivian government and the private sector hosted a one-day seminar engaging more than 200 attendees, including industry representatives, refineries, government officials and Bolivia’s vice president. At the conference, Bolivia’s Vice-President Linera closed the session by committing publicly that he and his team would ¨roll up their sleeves¨ and work hard to establish an E10 blend in 2018.

The Council will continue supporting this momentum with technical expertise to promote a consistent biofuel policy with a role of trade that will both increase local gross domestic product (GDP) and become a potential export opportunity for the U.S. ethanol market.