Tag Archives: ethanol

Sioux Falls, SD (July 5, 2019) – American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement on the Environmental Protection Agency’s (EPA) proposed Renewable Volume Obligations (RVOs) for the 2020 Renewable Fuel Standard (RFS):

“While EPA says it is proposing to maintain the 15-billion-gallon conventional biofuel blending target for 2020, refinery exemptions without reallocation of waived volumes have effectively reduced the RFS by more than 2 billion gallons below statutory volumes.

President Trump asked EPA to remedy this issue following his trip to Iowa a few weeks ago and this proposal is a missed opportunity to reallocate the 2.61 billion gallons waived through Small Refinery Exemptions (SREs).

“It’s also a missed opportunity to restore the 500-million-gallon shortfall the D.C. Circuit Court ordered EPA to handle following the Americans for Clean Energy et al v. EPA lawsuit, which recently resigned EPA Assistant Administrator for Air and Radiation William Wehrum told ACE members EPA intended to address in the 2020 proposed rule at our D.C. fly-in in April.

“EPA continues to disregard President Trump’s campaign promise that ‘the EPA should ensure that biofuel blend levels match the statutory level set by Congress under the RFS.’ Like the 2019 blending targets, the 2020 proposed RVOs reinforce our challenge to certain SREs in Court and petition for EPA to account for lost volumes of renewable fuel resulting from the unprecedented number of retroactive SREs that continue to be granted by the agency.

“A strong rural economy depends upon growing the use of renewable fuels. We expect the administration to follow through on the promise that EPA and USDA will review the expanded use of refinery waivers and deliver a satisfactory remedy.”

DENVER—Operating margins for ethanol producers will likely remain weak for the remainder of 2019 under the weight of abundant production. Declining corn production this year will also squeeze margins and some ethanol plants will be forced to shut down or idle their production due to high corn prices or insufficient supplies.

According to a new report from CoBank’s Knowledge Exchange Division, exports remain one area of optimism for ethanol producers, but that optimism is based on China’s plans to convert to E10 blend gasoline nationally by the end of 2020. In the meantime, domestic U.S. ethanol demand will likely be flat over the next two years.

“For margins to go up, supply will need to go down,” said Will Secor, economist, grain and farm supply, for CoBank. “This will be a painful process for some higher-cost producers as they look to reduce production or exit the industry. Consolidation and a slow grind to higher margins will be themes in the coming years as the industry works through changes to absorb excess production capacity.”

Ethanol plants had expanded capacity after several years of positive margins. However, margins began sliding in the summer of 2018 and plants have struggled to remain profitable since then. With stocks expected to remain above 900 million gallons through the remainder of 2019, margins are expected remain low.

One potential growth area is E15, as this fuel blend containing 15% ethanol can now be sold year-round. Some retailers will need to invest in additional infrastructure to support E15 sales and will have to weigh the costs of new pumps, tanks or other equipment against the potential profits from offering E15.

Increased demand for ethanol due to E15 will be limited in the next three years as retailers make these investments and consumer acceptance builds. Longer-term, the E15 fuel market will be able to provide stronger support to ethanol plant margins.

Persistent, low margins will also drive ethanol plants to diversify their revenue streams. “The ethanol plant of today could turn into the corn bio-refinery of tomorrow,” said Secor. “One could expect co-product offerings to expand and investments in these co-product lines to increase. These co-product investments may include equipment to produce high-protein dried distiller grain with solubles, corn oil optimization, and new buyers for carbon dioxide.”

Watch a video synopsis and read the full report: Ethanol Outlook Weak Amid Sluggish Demand.

Sioux Falls, SD– American Coalition for Ethanol (ACE) applauds the letter a group of bipartisan Senators sent Tuesday urging the U.S. Environmental Protection Agency (EPA) to publicly announce its intent to review and incorporate the latest “Greenhouse gas and Regulated Emissions and Energy Use in Transportation (GREET)” modeling into an updated life cycle assessment for corn ethanol. U.S. Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA), both members of the Senate Committee on Agriculture, Nutrition, and Forestry, led the effort in advising EPA to update its outdated environmental analysis on ethanol. ACE CEO Brian Jennings issued the following statement applauding the Senators for urging EPA to formally adopt these changes without further delay:

“ACE extends our gratitude to Senators Durbin and Grassley for leading this bipartisan effort to hold EPA accountable on this important issue. Unlike the Argonne GREET model, EPA has not reviewed or updated their original 2010 corn ethanol greenhouse gas (GHG) assessments. Current data from the GREET model indicate that corn ethanol’s carbon intensity is almost 50 percent less than petroleum gasoline providing significantly more GHG reduction benefits than when the RFS was enacted a decade ago. Last year, ACE published “The Case for Properly Valuing the Low Carbon Benefits of Corn Ethanol” recommending, as is stated in the Senators’ letter today, that EPA refer to the latest U.S. Department of Energy GREET model for life cycle analysis of corn ethanol.

“Given the all hands-on deck nature of the climate change problem, agricultural and biofuel stakeholders continue to believe that governmental policies need to properly acknowledge the role that agriculture and biofuel can play in providing near-term solutions to offsetting U.S. GHG emissions. One of the most direct ways to capitalize on agriculture’s ability to mitigate GHG emissions is to properly acknowledge the role U.S. farmers and ethanol producers are playing to dramatically reduce life cycle GHG emissions from corn ethanol by improving efficiencies, investing in technologies, and adopting sustainable agricultural practices.

“U.S. farmers are under tremendous financial stress from collapsing net farm income, rising expenses, ongoing trade tensions, weather-related disasters, and the undermining of the Renewable Fuel Standard (RFS) with demand destroying small refinery waivers. Updating EPA’s decade-old modeling would be a step in the right direction to underpin the scientific and economic opportunity for ethanol use to increase via low carbon fuel markets.”

ACE’s White Paper titled “The Case for Properly Valuing the Low Carbon Benefits of Corn Ethanol” is available online by visiting https://ethanol.org/ethanol-essentials/low-carbon-benefits-of-corn-ethanol.

Growth Energy Wednesday filed a motion in a U.S. federal appeals court to intervene in a challenge to the Environmental Protection Agency’s rule allowing year-round E15 sales.

The final rule is being challenged by the American Fuel and Petrochemical Manufacturers who filed the lawsuit on Monday. Growth Energy CEO Emily Skor called the challenge “no surprise,” noting the industry saw similar challenges when E15 was first approved in 2011. Skor says the oil industry “wants to inject uncertainty into the marketplace.”AFMP contends, “the plain language of the Clean Air Act does not authorize an RVP waiver expansion beyond E10.”

Year-round E15 sales were authorized through a Reid vapor pressure waiver. Under the Clean Air Act, legal challenges to EPA’s E15 rulemaking may be brought as a “petition for review” within 60 days of publication of the final rule in the Federal Register. Interested parties such as Growth Energy may also file a motion to intervene in the petition for review to protect their interests.