US Eyes Mexico Ethanol Market

USDA Leads Mission to Explore Ethanol Opportunity in Mexico

NEW YORK (DTN) -- USDA Acting Deputy Secretary Michael Scuse is leading a U.S. ethanol mission to Mexico this week to explore trade opportunities between the two countries, according to a news release from the agency.

Participants in the mission on Tuesday and Wednesday include representatives from the Renewable Fuels Association, Growth Energy and the U.S. Grains Council, who will attend meetings with government officials, legislators and the Mexican private industry.

They will share their experiences with both ethanol production and the development of renewable fuels policies, with the goal of demonstrating how Mexico can implement its own renewable fuels program.

Mexico's state-owned oil company PEMEX has plans to begin selling E6, which is 5.8% 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.

"Mexico, with the right policies in place, has the potential to achieve similar benefits producing ethanol from sugarcane," Scuse said. "We view this as a partnership that can provide benefits for both Mexico and the United States."

Renewable Fuels Association General Counsel Ed Hubbard, who is on the trade mission, said, "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."

"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, said that with the energy regulation reform currently underway, now is the time to introduce ethanol into the Mexican fuel market in hopes of it one day becoming 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," he added.