Japan considers allowing US ethanol to meet biofuel mandate

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Friday, September 1, 2017

Japan recently filed a report with the USDA Foreign Agricultural Service’s Global Agricultural Information Network, noting the government plans to maintain its 500 million liter (132.09 million gallon) crude oil equivalent mandate for biofuels through at least 2022. The report also states the government of Japan is continuing to assess alternative sources for fuel ethanol, and that U.S. corn ethanol may be designated as an eligible source under the country’s sustainability policy. A decision is expected before the end of the year.

According to the report, the oil industry is expected to introduce 1.94 billion liters of bio-ethyl tert-butyl ether (ETBE) into the market this year in an effort to meet the biofuels mandate. That volume of bio-ETBE is equal to the 500 million liter mandate. Nearly all of that volume is expected to be imported.

The report indicates bio-ETBE blended gasoline is far more prevalent in Japan than E3, and is widely distributed. The Japanese government began to permit sales of E10 and ETBE22 in 2012 for certain vehicles. However, the report notes the change had little effect on the market, with the supply of E3 and E10 remaining small relative to that of bio-ETBE gasoline. According to the report, the country’s petroleum industry has no plans to supply ETBE22 gasoline.

More than 99 percent of the ethanol used in Japan for fuel and other purposes is imported. The country imported 757 million liters of ethanol for transportation last year, including 696 million liters imported as ETBE and 61 million liters used in domestic ETBE production. All imported ethanol currently used in domestic ETBE currently comes from Brazil, while all imported ETBE currently manufactured in the U.S. uses Brazilian ethanol.

Japan currently has only one facility that produces biobased ethanol for fuel use. That facility has a capacity of 200,000 liters and takes in domestic rice as feedstock. Two projects that produced biobased ethanol from molasses were terminated last year. The facilities produced a combined 1.9 million liters of ethanol annually until 2015.

A full copy of the report can be downloaded from the USDA FAS GAIN website.