As more states ease lockdown restriction, consumers are slowly returning to the pump and the recent spike in fuel demand has brought some ethanol plants back online.
Andersons, Inc. has reopened two ethanol plants, one in Michigan and the other in Iowa. Earlier this year, the company closed five facilities following a decline in sales. Its Minnesota plant will remain closed for the rest of the year.
According to the American Coalition of Ethanol, more facilities are expected to resume operations, but the closure will have a long-term impact on the industry.
“It’s safe to say you’re still looking at half the production capacity of the U.S. ethanol industry is offline right now,” ACE CEO Brian Jennings said. “We are talking about $8.5 to nearly $9 billion dollars of gasoline is parked right now as a result of the economic fallout from this pandemic.”
The House included provisions to help the struggling sector in its latest stimulus package: the HEROES Act. The provision offers 45 cents per gallon of ethanol produced between January and May 1st. The House is expected to vote on the HEROES Act later today.