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New Japanese Policy to Allow Use of U.S. Ethanol
USAgNet - 04/18/2018

The U.S. Grains Council, the Renewable Fuels Association, Growth Energy and their member organizations welcome the news that the Japanese government's new biofuel policy will allow imports of ETBE made from U.S. corn-based ethanol.

"The U.S. Grains Council is pleased by this decision and that Japan recognizes these improved benefits of U.S. product. We continue to work around the world, sharing the benefits of U.S. ethanol with other countries that are serious about reducing their GHG emissions," said Tom Sleight, president and chief executive officer of the U.S. Grains Council, which has an office in Japan working closely with the Japanese government and industry. "From this decision, it is unequivocal that continued improvements in carbon intensity reductions are critical to gain and maintain market access for U.S. ethanol."

The change comes as part of the country's update of its existing sustainability policy, approved in 2010, in which only sugarcane-based ethanol was eligible for import and which only allowed sugarcane-based ethanol for the production of ETBE, an oxygenate. The new policy calls for an increase in the carbon intensity reduction requirements of ethanol used as a feedstock to make ETBE to meet a 55 percent reduction, up from 50 percent, and recognizes corn-based, U.S.-produced ethanol's ability to meet that goal, even with the higher greenhouse gas reduction standard.

Japan will now allow U.S. ethanol to meet up to 44 percent of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons of U.S.-produced ethanol annually. Japan imports nearly all of the ETBE from ethanol that it uses.

This decision by the Japanese government is based on its evaluation and life cycle assessment update of U.S. corn-based ethanol. The U.S. industry's efforts to maximize production efficiency through technological innovations that lead to higher GHG emission reductions for corn-based ethanol and the emergence of co-products like distiller's dried grains with solubles (DDGS) have supported this new access to the Japanese market while positively contributing to the feed and energy value chains.

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