Ethanol market development organizations cheered the news out of Japan today that the government’s new biofuel policy will allow imports of the oxygenate ETBE made from U.S. corn-based ethanol.

A release from the U.S. Grains Council (USGC), the Renewable Fuels Association (RFA), and Growth Energy says Japan will now allow U.S. ethanol to meet up to 44 percent of a total estimated demand of 217 million gallons of ethanol used to make ETBE, or potentially 95.5 million gallons of U.S.-produced ethanol annually.

The change comes as part of the country’s update of its existing sustainability policy, approved in 2010, in which only sugarcane-based ethanol was eligible for import and which only allowed sugarcane-based ethanol for the production of ETBE, an oxygenate. The new policy calls for an increase in the carbon intensity reduction requirements of ethanol used as a feedstock to make ETBE to meet a 55 percent reduction, up from 50 percent, and recognizes corn-based, U.S.-produced ethanol’s ability to meet that goal, even with the higher greenhouse gas (GHG) reduction standard.

The groups say the Japanese government based on its decision on the evaluation and life cycle assessment update of U.S. corn-based ethanol and the U.S. industry’s efforts to maximize production efficiency through technological innovations that lead to higher GHG emission reductions for corn-based ethanol and the emergence of co-products like distiller’s dried grains with solubles (DDGS).