USGC helps create export demand for US ethanol

By U.S. Grains Council | June 13, 2022

To help countries cut their greenhouse gas emissions and to meet their Paris Climate Commitments, the U.S. Grains Council and its industry partners continue to advocate for ethanol as an option for the decarbonization of the transportation sector and an important tool to aid in the reduction of greenhouse gas (GHG) emissions globally. The Council participated in the discussions, which recently lead to the United Kingdom announcement of a nationwide E10 mandate, a move that could lead to an increase in U.S. ethanol exports to the U.K.

In 2018, the U.K. made a policy proposal announcement that they were considering doubling their current 5 percent ethanol blend mandate to reduce GHG emissions. Following the announcement and with the support of ATP funding, the U.S. Grains Council actively engaged with U.K. government agencies to advise on the policy proposals and provide information on the
benefits of ethanol in the fuel sector. In September 2018, the U.S. Grains Council, Growth Energy, and the Renewable Fuels Association submitted comments to the U.K. Department for Transport to support the expanded use of ethanol to help meet its GHG emissions reductions target, as U.S. corn-based ethanol has improved significantly in carbon intensity. The Council’s comments also included information about the environmental benefits of ethanol and the cost saving benefits of ethanol.

In March 2020, the U.S. industry participated in the Introducing E10 Petrol: Consultation process that included providing public comments and participating in a series of multistakeholder meetings hosted by the U.K. Department for Transport. In February 2021, the United Kingdom announced its commitment to introduce a ten percent ethanol blend standard (E10) nationwide by September 2021. The U.K.’s movement to E10 will not only help the country to achieve its climate goals but also expand the market for both U.K. and U.S. ethanol producers. The Council believes that the E10 policy will lead to a higher blend nationwide.

The EU-27+UK has typically been one of the top 10 export destinations of U.S. ethanol. Current gasoline blends in the U.K. contain no more than 5 percent ethanol (E5). The new policy will create an opportunity for additional U.S. exports of ethanol to the U.K. of 140 million gallons. New demand is expected to be around 115 million gallons, in addition to the nearly 25 million
gallons already being exported. The potential in the United Kingdom with an E10 mandate could exceed $195 million. The Council’s direct engagement using ATP funds allowed the Council to be an advisor in the regulatory development process and ensure that ethanol was properly
valued in its role as a reducer of GHG emissions.