U.S. Grains Council Advances Ethanol U.S. Grains Council To Southeast Asia
Southeast Asia shows significant promise for U.S. ethanol, with recent developments highlighting growth potential. The Philippines has announced a voluntary increase in ethanol blending to E20, which could boost demand by 86 million gallons. Vietnam is considering expanding its ethanol mandate to E10, potentially increasing consumption by 400%. Meanwhile, Indonesia’s ethanol imports have surged by over 500%, with plans for broader ethanol blending. These advancements create substantial opportunities for U.S. ethanol producers in the region.
JULY 22, 2024
BY MACKENZIE BOUBIN
Emerging opportunities in Southeast Asia for the U.S. Grains Council’s ethanol programs are beginning to show significant merit and engagement. After years of market development efforts in the top tier markets in the region, namely the Philippines, Vietnam and Indonesia, these markets are showing immense promise and potential within the near- and long-term.
In June, the Philippines Department of Energy officially submitted notice that fuel retailers in the country can increase ethanol blending to E20 on a voluntary basis, representing 86 million gallons of potential increase in ethanol demand.
Currently, the Philippines consumes 1.8 billion gallons of gasoline annually and was one of the earliest adopters of ethanol blending programs globally. Ethanol production and demand has increased since its E10 mandate began in 2013, delivering significant economic benefits to rural communities, alleviating pump prices for consumers and reducing greenhouse gas emissions from the transportation sector.
This success story is further enhanced through the mutual trade partnership that the Philippines and the U.S. enjoy. In 2023, the country imported 55 million gallons of ethanol from the U.S., accounting for 85% of all ethanol imports and 40% of the Philippines’ total ethanol demand.
Alternatively, Vietnam is considering a potential migration of its current E5 RON92 mandate to all grades of gasoline as an immediate goal, with a longer-term aim of implementing E10 blending. A nationwide E5 mandate would increase ethanol consumption by an estimated 400%, creating opportunity for the U.S. ethanol industry to support Vietnam’s clean energy transition with supplemental supply.
The Council is working through a multistakeholder program to educate the public, governments and fuel supply chain on the benefits poised by E5 and E10 blends, which includes partnering with the local automobile and motorcycle industries. The Council has organized trade missions of Vietnamese industry leaders to visit the U.S. and witness firsthand ethanol’s seamless integration into our fuel supply
Finally, Indonesia continues to be of the fastest growing fuel markets in the world; ideal for integrating ethanol blending. In marketing year 2023/24, Indonesia has increased its ethanol imports from the U.S. by over 500% and is a top 10 market destination for U.S. ethanol with over 26 million gallons sold so far. Much of this product is being preblended as an E3 to overcome the current 30% import tariff on U.S. ethanol into the country.
Pertamina, Indonesia’s state-run oil refinery, continues to expand its E5 pilot program in the country, targeting nearly 60 retail locations carrying E5 RON95 by the end of 2024, and the new government is committing under their draft National Energy Policy to implement E40 by 2060. In addition, Pertamina also has vocally announced plans to launch an E7 called Pertamax Green 92, although no timeline has been given.
Given the significant movement within the region for these three markets, the Council’s Southeast Asia ethanol team is focused on internal consultations and engaging national strategy to align with global decarbonization efforts. This combination of the Philippines, Vietnam and Indonesia represents an immense opportunity for U.S. ethanol producers and creates a regional success story for other ASEAN members to follow.
Source Link : https://ethanolproducer.com/articles/us-grains-council-advances-ethanol-exports-to-southeast-asia
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