Higher Blends Infrastructure Program Grant Applications Open

Cindy Zimmerman Leave a Comment

The U.S. Department of Agriculture has launched an online portal to accept applications for Higher Blends Infrastructure Incentive Program (HBIIP) grants.

USDA has up to $100 million in competitive grants available to help expand the sale and availability of ethanol and biodiesel fuels with approximately $86 million allocated for higher blends of fuel ethanol, and approximately $14 million for implementation activities related to higher blends of biodiesel.

Those eligible for the grant program include vehicle fueling facilities, such as local stations, convenience stores, hypermarket fueling stations, fleet facilities, fuel terminal operations, midstream partners and/or distribution facilities.

The grants are available for up to 50 percent of total eligible project costs, but not more than $5 million.

USDA plans to make funds directly available to help transportation fueling and biodiesel distribution facilities convert to higher ethanol and biodiesel blends by sharing the costs related to the installation of fuel pumps, related equipment and infrastructure.

Electronic applications must be submitted by Aug. 13, 2020, at 11:59 p.m. Eastern Daylight Time. Paper applications will not be accepted.

For details, visit the Higher Blends Infrastructure Incentive Program web page.

Biodiesel, biofuels, Ethanol, Ethanol News, USDA

RFA CEO Says Worst May be Over for Ethanol Industry

Cindy Zimmerman Leave a Comment

The COVID-19 pandemic has continued to have a devastating impact on the U.S. ethanol industry, slashing production by half and leading to the idling of scores of plants across rural America. However, the industry may be finally turning the corner, according to Renewable Fuels Association (RFA) President and CEO Geoff Cooper.

“We are starting to see some ethanol plants come back on line…last week we saw the highest rate of output that we’ve seen in five weeks,” said Cooper during a media call Friday. “So it does seem like we are starting to see a light at the end of the tunnel, but we still have a very long way to go to climb out of the hole that COVID-19 put us in.”

Meanwhile, Congress is considering its newest aid package which includes help for ethanol producers, the Renewable Fuel Standard is facing new threats, and the ethanol industry is becoming an important supplier of alcohol for hand sanitizer. Cooper comments on all of that and also shares some new national polling results that indicate continued strong support for renewable fuels.

Cooper was joined on the call by two ethanol producers:
Neil Koehler, Chairman, RFA; Co-Founder and CEO of Pacific Ethanol
Tim Winters, President and CEO of Western New York Energy

Opening remarks –
RFA 5-15 update on COVID-19 impact remarks

Q and A –
RFA 5-15 update on COVID-19 impact questions

Audio

Ethanol Production Continues Slow Recovery

Cindy Zimmerman Leave a Comment

Gasoline use is increasing as more cars gradually get back on the road with coronavirus restrictions easing in many states, which is helping ethanol production slowly increase.

According to the latest EIA data analyzed by the Renewable Fuels Association for the week ending May 8, ethanol production expanded by 3.2%, to 617,000 barrels per day — equivalent to 25.91 million gallons daily and a five-week high. However, production remains tempered due to COVID-19 disruptions, so that is still 41.3% below the same week in 2019. The four-week average ethanol production rate bounced 2.1% higher to 579,000 b/d, equivalent to an annualized rate of 8.88 billion gallons.

Ethanol stocks tightened by 5.6% to 24.2 million barrels, the lowest volume since March 20.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, jumped 11.0% to 7.398 million b/d (113.41 bg annualized) yet was 19.1% lower than a year ago.

Refiner/blender net inputs of ethanol followed, up 11.9% to 666,000 b/d, equivalent to 10.21 bg annualized but 30.1% below the year-earlier level. While implied gasoline demand has rebounded by 46.1% from the low experienced during the week ended April 3, refiner and blender net inputs of ethanol have been slower to recover, up 32.7%.

Ethanol, Ethanol News, RFA

Brief Filed in Case Over EPA Limits on Higher Blends

Cindy Zimmerman Leave a Comment

An alliance of ethanol, agriculture and clean fuel organizations led by the Urban Air Initiative is challenging the EPA over regulatory barriers to higher blends of ethanol they say are illegal. An opening brief in the case was filed this week in the D.C. Circuit Court of Appeals and oral arguments are expected this fall.

Specifically, the brief argues that EPA’s interpretation of the “substantially similar” provision of the Clean Air Act is obsolete and that EPA’s ruling last year permitting year-round sales of E15 should include the sale of fuel blends containing more than 15% ethanol, consistent with prior guidance allowing retailers to sell E20 and E30 under the Clean Air Act.

Today automakers use test fuels with 10% and 15% ethanol to certify most vehicles. The brief argues that since ethanol is now used in the certification of motor vehicles, the sub-sim law no longer limits the addition of ethanol to gasoline. Therefore, the court should reject EPA’s limit on the sale of gasoline with more than 15% ethanol. In the alternative, the brief argues that EPA’s only rationale for limiting the rule to E15 was refuted by the scientific evidence submitted during the notice-and-comment period, science that EPA simply chose to illegally ignore. As a remedy, the brief asks the Court to order EPA to allow ethanol to compete for greater market share against harmful petroleum-based fuel additives, but without disturbing the rule allowing the year-round sale of E15.

Co-petitioners in the case include National Farmers Union, South Dakota Farmers Union, Farmers Union Enterprises, Jackson Express, Jump Start, Clean Fuels Development Coalition, Big River Resources LLC, Fagen Inc., Glacial Lakes Energy LLC, and Little Sioux Corn Processors.

EPA, Ethanol, Ethanol News, NFU, Urban Air Initiative

USDA Report Calls for Increased Ethanol Output

Cindy Zimmerman

The May World Agricultural Supply and Demand Estimate out from USDA this week is forecasting record high production and domestic use, greater exports, and larger ending stocks for corn.

The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and a return to trend yield. The yield projection of 178.5 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period. Despite beginning stocks that are down slightly from a year ago, total corn supplies are forecast record high at 18.1 billion bushels. Total U.S. corn use in 2020/21 is forecast to rise relative to a year ago with increases for domestic use and exports. Food, seed, and industrial (FSI) use is projected to rise 245 million bushels to 6.6 billion.

Corn used for ethanol is projected to increase from the 2019/20 COVID-19 reduced levels, based on expectations of a rebound in U.S. motor gasoline consumption. Corn feed and residual use is projected higher mostly reflecting a larger crop and lower expected prices.

The report also says corn exports are forecast to rise 375 million bushels to 2,150 million, driven by growth in world corn trade. With total U.S. corn supply rising more than use, 2020/21 U.S. ending stocks are up 1.2 billion bushels from last year and if realized would be the highest since 1987/88. Stocks relative to use at 22.4 percent would be the highest since 1992/93.

corn, Ethanol, Ethanol News, USDA

House Includes Aid for Biofuels in Relief Act

Cindy Zimmerman

Help for struggling ethanol producers is included in the new COVID-19 legislative relief package, thanks to the efforts of Democratic Reps. Cindy Axne (IA-01), Cheri Bustos (IL-17), Abby Finkenauer (IA-01), and Angie Craig (MN-02).

The Renewable Fuel Reimbursement Program included in the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) would authorize USDA to provide assistance of 45 cents per gallon of qualifying ethanol produced from January 1 through May 1, 2020. Producers forced offline for one or more calendar months during this time would qualify for the same credit, based on half the volume produced during the corresponding month or months in 2019.

Renewable Fuels Association President and CEO Geoff Cooper says the aid represents a potential lifeline for the 350,000 men and women whose jobs depend on a healthy and vibrant ethanol industry. “This program would lend a crucial helping hand and ensure that ethanol producers are able to participate in the economic recovery from COVID-19,” said Cooper, who notes that roughly half of the industry’s capacity offline today. “When an ethanol plant shuts down or reduces production, it destabilizes the entire rural economy. Jobs are lost, farm commodity demand and prices plummet, supplies of vital co-products like distillers grains and captured CO2 evaporate, and the nation’s drivers are denied lower-cost, cleaner-burning fuel options at the pump.”

“This is the first time Congress has introduced a stimulus bill that would provide aid directly to biofuel producers and for that we are extremely appreciative,” said American Coalition for Ethanol (ACE) CEO Brian Jennings. “It’s important that securing aid for the biofuel sector continues to be a bipartisan goal. This is one important step in the process but until a bill is signed into law by the President that contains direct aid, we need to stay in constant contact with Members of Congress.”

Senators are expected to consider similar legislation.

ACE, Ethanol, Ethanol News, RFA

Electric Cooperatives Urge Relief for Rural America

Cindy Zimmerman

Over 30 rural electric cooperatives serving members across the Upper Midwest have signed on to a letter urging members of Congress to provide economic relief for rural America. The letter was addressed to members of Congress from Minnesota, South Dakota, North Dakota, Iowa and Nebraska.

Specifically, the letter calls for Congress to support additional stimulus package relief for food and ethanol processing plants, and the farmers and ranchers who serve them, most of whom are also electric cooperative members. The electric cooperatives represented on the letter combined serve over 3 million consumers across the region.

“We are respectfully requesting much-needed economic relief for rural America, which continues to suffer from the impacts of the coronavirus pandemic,” the letter said. “Rural electric cooperatives were created to provide electricity to farms and rural communities and have continued to expand this essential service as rural America has grown and prospered. Our member-owners have invested in not only the electric infrastructure through their cooperative to serve these areas, but also in helping to develop the rural economy in which they live. These investments have allowed for diversification into biofuels, food processing, and other business development opportunities.”

The letter was driven by Basin and East River Electric Power Cooperatives who provide power to 30 U.S. ethanol plants. East River is a founding member of the American Coalition for Ethanol (ACE).

Estimates show as much as half of U.S. ethanol production has been idled due to efforts to slow spread of COVID-19. In addition, the pandemic has forced several food processing facilities to either idle or shut down. These events have left producers of several agricultural commodities without a market for their product, forcing some to euthanize animals or destroy their products. The pandemic has compounded the impacts of low commodity prices and extreme weather events that had already created a struggling farm and rural economy.

ACE, Ethanol, Ethanol News

Ag and Biofuel Groups Ask Congress for COVID-19 Relief

Cindy Zimmerman

America’s top biofuel and farm advocates are calling on Congress to ensure the next round of COVID-19 relief includes U.S. ethanol and biodiesel production.

A joint letter to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell was signed by the Renewable Fuels Association, Growth Energy, the National Biodiesel Board, the American Farm Bureau Federation, the National Corn Growers Association, the American Soybean Association, the National Farmers Union, the National Oilseed Processors Association, the National Renderers Association, the National Sorghum Producers, and Fuels America.

“The situation we face is dire,” wrote biofuel and farm advocates. “More than 130 biofuel plants have already partially or fully shut down as motor fuel demand plunged to 50-year lows. America’s biofuel plants purchase annually more than one-third of U.S. corn and U.S. soybean oil, and the loss of those markets has depressed farm income and will continue to push corn and soybean prices down dramatically. The damage has rippled across the entire agricultural supply chain.”

The letter notes that the U.S. Department of Agriculture (USDA) excluded the biofuel sector from initial aid under CARES Act, despite urgent letters of support to Secretary Sonny Perdue from broad, bipartisan coalitions in the House and Senate.

Read the letter here.

AFBF, ASA, Biodiesel, biofuels, corn, Ethanol, Ethanol News, NBB, NCGA, RFA

Senators Urge President Trump to Uphold RFS

Cindy Zimmerman

A bipartisan group of 24 U.S. senators sent a letter to President Trump this week that strongly urges him to uphold the Renewable Fuel Standard and reject oil industry efforts to waive renewable fuel blending obligations.

The effort was led by Sens. Joni Ernst (R-IA), Tina Smith (D-MN), Chuck Grassley (R-IA), and Debbie Stabenow (D-MI). They expressed their concerns in response to the oil industry efforts to waive renewable fuel blending obligations.

“Waiving the RFS would cause further harm to the U.S. economy, especially our most vulnerable rural communities. It would also exacerbate the effects experienced by the biofuel sector as a result of COVID-19, causing far-reaching detrimental impacts on employment, farmers, food security, fuel prices, and the environment. The resiliency of America’s renewable fuel industry has already suffered as a result of the EPA’s drastic expansion of the small refinery waiver program in recent years.”

“We join these leaders in asking the administration to stand up for the Renewable Fuel Standard, which has promoted energy diversity, strengthened the heartland’s economy, reduced emissions, and lowered consumer fuel costs for a decade and a half,” said Renewable Fuels Association (RFA) President and CEO Geoff Cooper. “Now is not the time to abandon this vital policy, especially when so many jobs are on the line in the midst of an unprecedented economic crisis. We are truly grateful that these senators understand that.”

Cooper noted that, as of Wednesday, roughly half of the ethanol industry’s production capacity remained offline, and nearly three-quarters of the nation’s ethanol plants were fully idled or had greatly reduced output rates.

“Ethanol plant closures don’t just affect our nation’s fuel supply; they also affect the supply of other critical products made by the industry, such as high-protein feed for livestock and poultry producers and captured carbon dioxide, which is an important product for food and beverage processing and other industries. Shutting down, or even slowing down, our diverse product line has significant ripple effects throughout the entire U.S. economy.”

Ethanol, Ethanol News, RFA

Commerce Maintains Duties on Argentine Biodiesel

Cindy Zimmerman

The U.S. Department of Commerce announced today a final determination in its “changed circumstances review” of antidumping duty (AD) and countervailing duty (CVD) orders on imports of Argentine biodiesel. As a result, the rates on biodiesel imports from Argentina will remain at their current levels.

National Biodiesel Board (NBB) is pleased with the decision.

Kurt Kovarik, NBB’s VP of Federal Affairs, said, “NBB’s Fair Trade Coalition fought hard for this outcome, and we certainly appreciate Secretary Wilbur Ross and the Trump administration for supporting U.S. biodiesel producers at a critical moment. We are grateful for their consistent willingness to listen to the U.S. biodiesel industry. The Department of Commerce took the time necessary to fully evaluate the status of Argentina’s export tax regime and make the right decision.

“Also critical to this outcome is the support and leadership of Senators Chuck Grassley and Maria Cantwell along with Representative Darren LaHood. We greatly appreciate their steadfast support for the U.S. biodiesel industry and America’s soybean farmers. U.S. biodiesel producers appreciate their help in amplifying the industry’s push for fair trade conditions.”

It was determined back in January 2018 that U.S. biodiesel producers were harmed by unfair trade practices and Commerce finalized antidumping and countervailing duty rates on Argentine biodiesel imports, ranging from 132.72% to 157.86%. In July 2019, Commerce issued a preliminary decision on Argentina’s request for a “changed circumstances” review that would have virtually eliminated CVD rates for Argentina’s biodiesel producers, while maintaining AD rates.

Today’s final determination maintains both AD and CVD rates and will be published in the Federal Register at a later date.

Biodiesel, NBB