To Mexico on a renewable fuels mission

WASHINGTON, May 26, 2016 - Mexico is embracing ethanol and U.S. officials want to make sure they can help, potentially laying the groundwork for a renewable fuels program and ethanol exports headed for south of the border.

USDA Acting Deputy Secretary Michael Scuse is leading a U.S. ethanol mission to Mexico on May 24–25, along with representatives from the Renewable Fuels Association, Growth Energy and the U.S. Grains Council.

Last year, Pemex – Mexico’s state-owned petroleum company – announced its plan to introduce a first-ever pilot program to blend gasoline with ethanol and reduce emissions by up to 35 percent. This spring, the company said it planned to begin selling E6 (5.8 percent) ethanol-blended gasoline in selected cities in the Mexican states of Tamaulipas, San Luis Potosi, and Veracruz.

Implementation of a nationwide E6 fuel option in Mexico would create a potential market for 790 million gallons of ethanol, according to USDA.

"Our goal is to partner with Mexico to support the establishment of an economically viable ethanol industry there, where Mexican domestic production can be supplemented with imported product from the United States," Scuse said. "The increased use of ethanol in the North American fuel market will provide citizens from both countries with an inexpensive source of renewable energy that improves air quality, reduces greenhouse gas emissions, and stimulates the rural economy."

Renewable Fuels Association General Counsel Ed Hubbard, who is on the trade mission, said now is the right time to explore new trade opportunities. “The U.S. is the world’s largest producer of ethanol and for several years now has been the low cost supplier as well, allowing us to dramatically increase our exports. With domestic use artificially capped by EPA at 14.8 billion gallons, we will continue to seek export opportunities,” said Hubbard.

“This trade mission is an excellent example of the importance of ethanol to the success of nations looking to reduce their imports of harmful fossil fuels in favor of a cleaner burning and a more economical fuel,” said Growth Energy CEO Emily Skor. “It is also equally important to our goal of expanding the marketplace for U.S. ethanol, which is why we’re proud to be participating in this mission.”

Ryan LeGrand, USGC director in Mexico, expressed hope that ethanol could one day become the principal oxygenate used in the country. “We see significant potential for exports of U.S. ethanol to Mexico — and therefore, U.S. grain demand — if the right policies are in place.”

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