Insight Focus
Japan is set to increase US ethanol imports. The country plans to blend 10% ethanol by 2030 and 20% by 2040. The US Grains Council supports these goals, citing a potential 1.2-billion-gallon market opportunity.
Japan Plans to Boost US Ethanol Imports
The US ethanol industry had a pleasant surprise recently when Japanese Prime Minister Shigeru Ishiba, during a visit to Washington, DC, told President Donald Trump that increased US ethanol exports to Japan could help reduce the US trade deficit with his country.
Source: EIA
During a joint news conference, Ishiba told Trump that Japan is planning to scale up its ethanol purchases.
“We’ll be able to provide it,” Trump said. “Iowa is going to be very happy. Nebraska, all of our farm states are going to be very happy.”
Before 2018, Japan exclusively used Brazilian ethanol for on-road uses, according to the US Grains Council. This was because the country’s Ministry of Economy, Trade and Industry had excluded US corn-based ethanol, based on its higher carbon-intensity score.
Japan Sets New Gasoline Blend Targets
The Japanese government has announced its intention for the country’s gasoline to be blended with 10% ethanol (E10) by 2030 and E20 by 2040, a move that will have significant benefits for the economic, environmental and human health of Japan and its consumers.
Source: USDA
“The US Grains Council (USGC) and its members and partners are delighted at the news of Japan’s steps towards E10 and E20 and applaud its recognition of ethanol’s ability to reduce harmful emissions in our atmosphere,” said Ryan LeGrand, USGC president and CEO.
“The Council is ready and willing to support Japan and its transportation sector in any capacity to help the country meet its energy ambitions.”
In 2022, Japan targeted biofuel use of 500 million litres of crude oil equivalent. As there is almost no biodiesel, the target equates to 824 million litres of ethanol. Most fuel ethanol is consumed in the form of Ethyl Tertiary Butyl Ether (ETBE), a gasoline blending component.
Iowa’s deputy ag secretary Grant Menke told news outlets that he is optimistic Japan will expand its purchases of US ethanol. “If they are able to fulfil their goals, we could see a 1.2-billion-gallon ethanol opportunity in Japan going forward,” Menke said, adding that Japan’s ethanol market is currently valued at 140 million gallons.
The US Grains Council is a longstanding supporter of biofuel growth in Japan. It recently attended the opening of the first E7 fuel pump in Japan.
“Through promotional activities like the USDA/USGC joint conference in October, the Council will continue ensuring the introduction of higher bioethanol blends in Japan and work to make US corn ethanol a major component in supporting Japanese ethanol blending policies,” said Tommy Hamamoto, USGC director in Japan.
Japan’s government had previously set a target of having all vehicles be fully or partially electrified by 2035. However, delays to that initiative and Japan’s concentrated efforts to reduce carbon emissions have created the need for higher ethanol blending rates.
