A U.S. Grains Council (USGC) trade team from South Korea including 10 oil and ethanol industry representatives visited the offices of the Iowa Corn Growers Association on November 2 in Des Moines. Earlier in the day they toured the POET ethanol plant at Emmetsburg in northwest Iowa. The team, arranged in conjunction with the U.S. embassy in Seoul, is visiting 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 South Korea increased from 55 million gallons over two years to a record 60 million gallons in 2015. South Korea now accounts for 7% of all U.S. ethanol exports according to USDA’s Foreign Agricultural Service (USDA’s FAS). That is remarkable growth, considering South Korea was barely on the radar as an export destination for U.S. ethanol in 2013.
Korea is developing an interest in U.S. ethanol as a fuel source
According to the FAS, more than 90% 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. South Korea consumes about 3 billion gallons of gasoline per year. A roadmap has been set by that nation’s 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,” says Haksoo Kim, USGC’s director in Korea.
U.S. ready to gain additional share in world ethanol export market
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 region, maximizing their profits. As the lowest priced source of ethanol in the world, the U.S. stands poised to gain this additional market share.
More countries are learning about the benefits of using ethanol
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 Korean team visiting Iowa heard a presentation by Iowa Corn’s director of research and development, Rodney Williamson, and Iowa Corn’s senior policy adviser Amanda DeJong. Williamson answered questions about engine performance and talked about the Corporate Average Fuel Economy (CAFÉ) Standard requirements by the U.S. government on U.S. automakers to reduce tailpipe greenhouse gas emissions. He explained how automakers are exploring using high octane fuels in advanced combustion engines in meeting these requirements. DeJong provided the Korean delegation an overview of the benefits of ethanol, the U.S. Renewable Fuel Standard, U.S. ethanol blends and the biofuels infrastructure cost-share programs.
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 ag 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 distillers dried grains with solubles (DDGS). USGC believes exports are vital to global economic development and to U.S. agriculture's profitability. Founded in 1960, the council is a private, nonprofit 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 grains.org.