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USGC Explores Ethanol Use In Indonesia, Thailand

Opportunities and challenges to expanded use in both markets

Representatives from the U.S. Grains Council (USGC) recently traveled to Indonesia and Thailand to visit with ministry and industry officials there and gain a better understanding of the opportunities for and challenges to expanded ethanol use in both markets.

The Council's work in Thailand and Indonesia are part of a larger effort to engage with government and industries to assist in developing biofuels policies with a role for ethanol trade.

“Indonesia is forecast to be the sixth largest gasoline market by 2022,” said Brian Healy, USGC manager of ethanol export market development. “Additionally, Indonesia has a goal for renewables to represent 23 percent of their energy mix by 2025 and to reduce greenhouse gas emissions (GHG) by 29 percent by 2030. Ethanol has a great opportunity to help Indonesia meet these ambitious goals.”

Indonesia instituted a national ethanol policy in 2006, but the mandate has largely gone unmet. The Council engaged with Indonesia ministry officials in December to highlight the role of policy and trade in helping to develop a consistent supply chain for biofuels as well as capture the societal benefits of biofuels with regard to air quality and GHG emission reductions.

For example, according to a life cycle analysis study released by the U.S. Department of Agriculture (USDA) in January 2017, GHG emissions associated with producing corn-based ethanol in the United States are 43 percent lower than gasoline on an energy equivalent basis. Additionally, U.S. corn-based ethanol is expected to help reduce emissions by more than 50 percent domestically in the next five years.

The mission also highlighted the competitiveness of U.S. ethanol as an octane enhancer, compared to MTBE (methyl tertiary-butyl ether), aromatics or other sources.

Following meetings in Jakarta, the Council traveled to Thailand to assess opportunities for biofuels in that market. Thailand has an effective national blend rate of 12 percent, utilizing domestically-sourced sugarcane and cassava-based ethanol. Domestic ethanol production is expected to total nearly 360 million gallons in 2017.

“Thailand has successfully differentiated ethanol products to consumers at the pump by using price incentives across grades of fuel and incentivizing the use of flexible fuel vehicles,” Healy said. “Thailand also produces flex fuel vehicles for its own domestic market and for export to regional markets. As a result, Thailand is a good collaborator to discuss engine technology and biofuels policy with regional partners.”

The partnership opportunities in Thailand and Indonesia are part of the Council’s work to engage with government and industries around the world to assist in developing biofuels policies with a role for ethanol trade.

Learn more about the Council’s work on ethanol here.

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