ACE conference reveals global ethanol demand opportunities
Posted on 08/07/2017
Sioux Falls, SD (August 7, 2017) – The 30th annual American Coalition for Ethanol (ACE) conference Aug. 15-17 in Omaha will highlight key efforts underway here and abroad to set the stage for higher ethanol blends.
One of this year’s featured speakers is Jim Galvin, CEO and Director of Lakeview Energy and the appointed leader of the U.S. Grains Council Advisory Team for Ethanol. Galvin will provide an update on market trends, factors driving (and restricting) global demand for ethanol and co-products, and implications of trade policy reform on the U.S. ethanol industry.
“We need to ensure that biofuels and ag commodities do not get caught up in trade wars or retaliatory responses from other countries as the current Administration navigates through its reviews of existing trade deals and develops new ones,” Galvin said. “The importance of exports for ag and more recently for biofuels cannot be underestimated by this Administration as tariffs would be extremely disruptive at a time when we see plentiful global supplies of these commodities.”
Galvin added that two critical issues facing the industry are remaining price competitive on the world market for octane and having efficient logistics to get product to export destinations. “At a government level, we see increased attention by some countries on considering imposing import duties on our ethanol,” Galvin said. “We as an industry need to vigorously defend against these barriers to free and open trade.”
Ethanol is becoming more widely used and accepted as part of the global fuel transportation mix, evidenced by the sale of U.S. ethanol to countries like China and South Korea in recent years. Policies are also emerging for the inclusion of greater biofuels in a country’s fuel mix to help improve air quality and reduce greenhouse gas emissions. The recent announcement by Mexico to adopt an E10 fuel is a prime example of this, Galvin said.
Kristy Moore with KMoore Consulting LLC has spent time in Mexico assisting with efforts for this market prospect. Moore will also speak at ACE’s upcoming conference. “The Mexico opportunity for ethanol is exciting for two key reasons: size of the market potential and geography,” Moore said. “Currently, Mexico consumes about 12 billion gallons of gasoline per year (BGY)—this is just under California gasoline consumption (15 BGY) and more than the size of the Texas gasoline market. Mexico has never allowed ethanol blended gasoline, therefore the U.S. supply of gasoline, which nearly all of it contains 10 percent ethanol, was off limits. Mexico is a brand-new market opportunity.”