As the US moves toward a blend of 15% ethanol year around in motor fuels, China is attempting to achieve a 10% ethanol blend, something that will clear the air in its major cities. But China has retaliated against the US by placing a tariff on ethanol it had been buying from the US. Stu Ellis helps sort out the issues in our report from the Farm
US ethanol refiners produce 14 billion gallons of ethanol to achieve a 10% blend, but have a lot of ethanol left over. So, Craig Willis of the ethanol trade group Growth Energy, has become a global salesman for US ethanol.
China is the second biggest gasoline market in the world. They use 46 billion gallons roughly of gasoline annually. At E-10 they would need four and a half billion gallons of ethanol. Today in their country they can produce around 1 billion gallons of ethanol. So somehow they have to come up with three and a half billion gallons of incremental ethanol for this E-10 program and obviously it’s a big number. So we think the United States could be a great complement to whatever they can produce there, and just kind of a fun fact about 48% of all the gasoline in China is along the coast, the gasoline demand. So the United states can get to China with ethanol really cheaper than China can get to China because a lot of the production, where its going to be is northeast China, it’s a little tougher and more expensive to get into the coastal areas. We think that if we can get the trade war resolved here is a lot of potential there for US industry and farmers for the country.
Craig Willis is a former president of ADM’s ethanol business. That’s our report from the farm. I’m Stu Ellis with WCIA 3 your locl news leader.