Sept 21, 2021
As policymakers in Japan, South Korea and Taiwan consider new emission reduction initiatives to achieve carbon neutrality by 2050, the U.S. Grains Council is working to demonstrate the pathway for decarbonization through increased ethanol blending into local fuel supplies. Each country is focused on reducing economy-wide emissions and the transport sector remains high on the list in terms of achievable emissions reductions.
Japan’s strategic energy plan is being revised this summer and policies are in development to achieve the country’s carbon neutrality goals by 2050. Direct blending of ethanol presents an immediate opportunity for the country to further reduce transport emissions to achieve these policy outcomes. Today, Japan does not currently blend ethanol directly; it relies on pre-blended ethanol in the form of ethyl tertiary-butyl ether (ETBE) that reduces 712,000 tons of carbon dioxide emissions per year. With an average blend rate of just 1.9 percent, direct blending of at least 10 percent would drastically reduce carbon emissions for the transport sector.
Currently, the total potential U.S. market share in Japan for ethanol is up to 66 percent of the estimated demand of 217 million gallons of ethanol used to make ETBE, equal to 142 million gallons per year. Investment to reduce carbon intensity of U.S. ethanol paid off in that market where U.S. product previously had no market share for the first decade of a policy that began in 2009. Even as the greenhouse gas (GHG) reduction requirement became more stringent under that policy’s revision in 2018, U.S. ethanol gained access due to carbon intensity improvements made by the U.S. industry during that time.
Much like Japan, South Korea announced a goal last fall of achieving carbon neutrality by 2050, and the Korean public and private sectors have prepared scenarios and implementation measures for carbon reduction, including creating its Carbon Neutrality Committee that in the future will help set carbon neutrality policies.
The council’s Korea office has been providing stakeholders information on ethanol’s contributions to these goals and helping to create an environment for expanding ethanol use by demonstrating to the government the importance of introducing a fuel ethanol renewable fuel standard. Council staff has spoken at events hosted by the Korea Biofuel Forum and the Transportation Sector Working Group of the Carbon Neutrality Committee, that focuses on the importance of a local policy in achieving 2050 carbon neutrality in South Korea. The Council will co-host the Climate Crisis and Biofuel Symposium in September.
Taiwan is the most recent entrant in the region to announce similar targets to achieve net zero emissions. Like Korea, Taiwan does not blend ethanol into fuel. In the past, Taiwan has looked to pilot programs to blend ethanol in the market, but uptake was minimal, and the programs were discontinued. The enormity of the opportunity is immediate to demonstrate the role that ethanol has in supporting these policies as the U.S. ethanol industry value chain invests further to access these markets in the long term.
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