U.S. Ethanol Companies Export More to Mexico

Biofuel producers look south of the border despite loosened restrictions on selling E15. 

November 08, 2019

MEXICO CITY—U.S. ethanol producers are upping their exports to Mexico even after the Trump Administration lifted restrictions on selling E15, Politico reports. American ethanol companies have begun selling more pre-blended E10 to Mexican retailers in border locations. Two years ago, Mexico began allowing the sale of E10 in all locations except for Guadalajara, Mexico City and Monterrey.

U.S. Grains Council President and CEO Ryan LeGrand anticipates that the country will allow E10 to be sold in those three localities by the end of 2019. “Once the entire country is open, there’s a potential 1.2 billion gallons of ethanol exports to Mexico,” LeGrand said.

LeGrand cited White House policies as a major driving force behind the exports, as the U.S. Environmental Protection Agency (EPA) granted more exemptions to smaller refineries, thus reducing demand for biodiesel by 550 million gallons. The Trump Administration promised that large oil refiners would make up the difference between the waivers and the target number of gallons.

“If the Renewable Fuel Standard was being properly enforced, and if we didn't have a trade war with China, demand for U.S. ethanol could be about 2 billion gallons more than it is today,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

The agency countered that it “continues to implement the Renewable Fuel Standard program in accordance with the Clean Air Act, taking into consideration additional direction from Congress, recommendations from [the] Department of Energy, and relevant court decisions.”

Meanwhile, ethanol producers have found an alternative market for its biofuels. “The Renewable Fuel Standard is now being governed as something that is difficult for oil companies to do,” said Ron Lamberty, senior vice president for the American Coalition for Ethanol. “The only way to get around this is by selling [ethanol] somewhere else where they'll pay a fair market price for it.”