As of August this year, the U.S. had exported more than 905 million gallons of ethanol, a figure a bit higher than many experts expected for the year, says Craig Willis, senior vice president of global markets for Growth Energy. Despite tariffs, COVID-19 and other barriers blocking global markets, Willis expects exports this year to exceed 1.3 billion gallons, inching toward 2019’s total of 1.472 billion.

“Frankly, this year is coming in better than a lot of people thought,” Willis says.

Much of the balance over COVID-19 demand reduction is owed to an increase in industrial ethanol demand, he says. “It hasn’t been a one-for-one offset at all, but industrial demand has helped us out considerably.” Mexico, South Korea and India all have been strong markets on the

industrial side. “While it’s not fully offsetting reduced fuel demand out there, it definitely has helped out and given us stronger numbers than maybe some anticipated.”

Total year-over-year gasoline demand reduction for 2020 is estimated to end up between 9% and 12%, while 2021 will see an improvement to only 1% to 3%, Willis cites. “So we should see an increase next year, just because people are hopefully going to drive more as we get past this COVID environment that we’re in.”

COVID isn’t the only culprit. Tariffs and policy issues—such as those in Brazil and China—stood in the way of meaningful export increases to those markets in 2020, and likely will continue to keep U.S. ethanol exports from reaching their full potential next year.

“We need to make sure ethanol is treated as an energy product, from a tariff standpoint,” says Brian Healy, director of global ethanol market development for the U.S. Grains Council. “This continues to be an issue that’s going to impact fuel ethanol exports over the next five years. … The tariffs do not reflect the energy solution that ethanol is in these markets. We need to work on this disparity from a tariff-level standpoint.”

As countries like Canada, China, Mexico and Brazil evaluate their carbon-reduction policies and goals, ethanol needs to be at the table, Healy says. “Ethanol needs to continue to be elevated in climate discussions and environmental discussions. We cannot let ethanol get behind or excluded in these discussions. It’s got to have a prominent role as a solution to reduce GHG emission in the transport sector.

“Frankly, that’s the direction the world is headed in. We need to make sure we’re not left out of it.”
And looking ahead, several key markets show promise.