Team explores ethanol export opportunities to China

Farm Forum

The U.S. Grains Council helped organize, and participated in, a group of ethanol industry representatives that visited China May 10-13. The team was part of a larger International Trade Mission to China led by USDA Undersecretary Michael Scuse.

“China is clearly a potential market for U.S. ethanol,” says Bryan Lohmar, USGC director for China. “Policy makers in China are committed to improving air and water quality as well as reducing public health hazards. Based on these criteria, ethanol as an oxygenate additive in transportation fuel has superior qualities compared to the additives currently being used in China.”

China has put a moratorium on producing additional ethanol from grain, and capacity to meet potential demand with domestic ethanol from other feedstocks is limited. Together, these trends will likely result in ethanol import demand.

Led by Jim Miller, Growth Energy vice president and former USDA undersecretary, the team included representatives from farmer and ethanol producer associations, as well as ethanol producers and members of USDA’s Foreign Agricultural Service. They met with officials from China’s energy and trade policy agencies, trading companies and petroleum companies, and visited China’s largest ethanol production facility in Jilin Province. Discussions involved not only ethanol policies in the United States and China, but also how ethanol compares to alternative oxygenates in cost and environmental outcomes, as well as progress towards developing cellulosic ethanol technologies in both countries.

Current policy in China prevents companies from blending imported ethanol into vehicle fuel. However, given the opportunities for China to address environmental concerns with imported ethanol, the team discussed the possibility of a program that allows for limited blending of imported ethanol for fuel in regions where environmental concerns are most acute.

“U.S. ethanol exports to China would be mutually beneficial and strengthen the trade relationship between the two countries” Lohmar said, “therefore, we think these opportunities are real and look forward to working with partners in China to bring these benefits to both countries.”