Ethanol plans to be on the offensive when dealing with the new Congress

The ethanol industry plans to go on the offense with the new Congress, to position biofuels as an important part on the climate solution.

In Washington, speculation is growing that lawmakers may try to evolve the Renewable Fuel Standard into a National Low Carbon Standard after 2022.

American Coalition for Ethanol CEO, Brian Jennings says that the industry plans on being part of the conversation.

Jennings states, “While I think there are some statutory limitations on their ability to do it, we intend to fully engage on this topic and really educate members of Congress on how today corn ethanol reduces greenhouse gasses by about 50 percent compared to gasoline.”

He says that the Trump administration opened the door to more ethanol use with the year-round E-15 expansion, but more work is still needed to develop infrastructure for higher blend rates.

“Certainly, the Higher Blends Infrastructure Incentive Payment Program that was rolled out by USDA providing nearly $100 million dollars for ethanol and biodiesel infrastructure is going to be a shot in the arm,” he states. “We are working with retailers now who applied for those matching funds and are working through that process right now, but we need to see those market places continue to develop.”

He says that the global marketplace is imperative to the future of this industry, especially growing markets like China.

“It could be a game changer overnight,” he notes. “That country would like to go blending E-10 nationwide. That could create demand for about 4 billion gallons of ethanol, much of which would be needed to be satisfied through exports and so we would like to see that retaliatory tariff taken down on U.S. ethanol going into China.”

In the wake of COVID-19, the industry has seen $7-10 billion dollars in economic damage from low demand. So far, renewable fuels have been left out of stimulus packages, but Jennings says that ACE is working with lawmakers to include something in the next bill.

“We’re encouraged by the fact the House did have a provision that would reimburse renewable fuel producers for some of their production over the course of the year. The Senate had a bipartisan provision, which similarly would provide a reimbursement payment based on feedstock costs,” he adds. “So we are hoping something like that makes its way into the support package.”

The latest ethanol report shows ethanol demand is at a five month low in the United States.