U.S. ethanol producers found a friend south of the border on Monday after Mexico approved its own national mandate for blending the alcohol-based fuel in gasoline.
The establishment of Mexico's ethanol requirement is being hailed as a major expansion of the North American renewable fuels market and a key step toward harmonizing the two countries' clean energy goals, industry groups said.
"Our collective goal should be greater harmonization across all of North America on fuel regulations that embrace cleaner burning biofuels like ethanol because that is in the best interest of every mother, father and child," said Emily Skor, CEO of the U.S. pro-ethanol group Growth Energy. The group pledged to continue to work with its colleagues in Mexico "to clearly demonstrate the value of ethanol to their environment, water quality, rural sector and consumers," she said.
Mexico energy regulators published the ethanol rules in the country's federal register Monday. The rules require that 5.8 percent ethanol be blended in the nation's fuel supply with the exception of the three major metropolitan areas of Mexico City, Guadalajara and Monterrey.
By comparison, the U.S. blends about 10 percent ethanol in the nation's gasoline supply to comply with the Environmental Protection Agency's Renewable Fuel Standard program. The RFS has been under attack by the oil industry for years because of problems in implementing the program. Congressional critics have called for substantial reforms to the program or to repeal it entirely.
But it seems that problems with the renewable fuels program in the U.S. isn't dissuading Mexico from pursuing its own program.
U.S. grain producers also lauded Mexico's achievement, saying Mexico's market has "seen enormous growth" in demand for U.S. products of all types over the past two decades. "We welcome this positive development related to ethanol use and what it could mean for furthering of the U.S.-Mexican trade partnership," said Tom Sleight, president and CEO of the U.S. Grains Council.
Mexico's ethanol rules go into effect in 60 days.