SOUTH KOREA POISED TO EXPAND IMPORT OF U.S. ETHANOL
A U.S. Grains Council (USGC) trade team from South Korea including ten oil and ethanol industry representatives visited the offices of Iowa Corn today after touring the POET ethanol plant in Emmetsburg this morning. The team, arranged in conjunction with the U.S. embassy in Seoul, is in the United States to learn more about ethanol production and its use as they work to develop a plan to begin blending ethanol in their county’s fuel nationwide.
U.S. ethanol exports to Korea increased from 55 million gallons over two years to a record 60 million gallons in 2015. Korea now accounts for 7 percent of all U.S. ethanol exports per the U.S. Department of Agriculture’s Foreign Agricultural Service (USDA’s FAS) figures, which is remarkable considering it was barely on the radar as export destination for the U.S. in 2013.
According to the FAS, more than 90 percent of these shipments in 2015 were intended for fuel use, a significant change from previous years when more non-fuel ethanol for industrial uses was shipped mostly from Brazil. South Korea has not yet set an ethanol blending program, but there is interest to do so given its high dependency on crude oil imports and interest to reduce greenhouse gas emissions. The country consumes about 3 billion gallons of gasoline per year. A roadmap has been set by the Ministry of Environment to begin distributing E3 and E10 in selected cities this year, and E10 nationwide by 2035.
“While Korea’s current fuel requirements don’t specifically call for the use of ethanol, we believe that through market development programs such as trade teams and in country engagement, we can develop Korean interest for U.S. ethanol and create demand for it as a fuel source,” said USGC Director in Korea Haksoo Kim.
Another key factor in the development of the South Korean market is their building of infrastructure to begin distilling imported fuel-grade ethanol into their own higher non-fuel ethanol. This type of ethanol, used to make industrial solvents, is typically higher priced and requires additional processing. This move would put Korean ethanol distillers in the driver’s seat allowing them to refine only the amount of high-quality ethanol they need while selling the rest to other countries in the regional, maximizing their profits. As the lowest priced source of ethanol in the world, the U.S. stands poised to gain this additional market share.
Korea is just one market in which the U.S. ethanol industry partners are engaged. Programs are also ongoing in Mexico, China, India, Japan, Peru and the Philippines, with more to come in 2017.
The Iowa Corn Promotion Board (ICPB), works to develop and defend markets, fund research, and provide education about corn and corn products. The Iowa Corn Growers Association (ICGA) is an 8,000-member strong grassroots-driven organization, headquartered in Johnston, Iowa, serving members across the state, and lobbying on agricultural issues on behalf of its farmer members to create opportunities for long-term Iowa corn grower profitability. For more information, visit iowacorn.org.
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including ethanol and distiller’s dried grains with solubes (DDGS). The Council believes exports are vital to global economic development and to U.S. agriculture's profitability. Founded in 1960, the Council is a private, non-profit corporation with 10 international offices and programs in more than 50 countries. Its unique membership includes producer organizations and agribusinesses with a common interest in developing export markets. See more at www.grains.org.