Brazil Suspends Ethanol Tariff Until End of Year

Cindy Zimmerman

The government of Brazil has announced it will suspend tariffs on U.S. ethanol starting March 23 until the end of 2022. The country is also suspending tariffs on six food products as a means of decreasing inflationary pressures.

The leaders of the Renewable Fuels Association, U.S. Grains Council, and Growth Energy issued a joint statement welcoming the move as an opportunity to make the 18% tariff cut more permanent.

“We welcome this decision and see it as an opportunity to continue discussions with Brazil to expand the global use of low-carbon ethanol, reduce barriers to trade and elevate its prominence in energy discussions. Our hope is that with this action, Brazil and the U.S. will share with third parties the vision of free and open global ethanol markets.

We will continue to pursue a long-term, open and mutually beneficial ethanol trading relationship with Brazil as we work to make this temporary reduction permanent. We look forward to continuing to work closely with USDA and USTR to return to a fair and reciprocal trading relationship with Brazil regarding ethanol.”

The tariff issue was brought up during a panel discussion on trade at the recent National Ethanol Conference which included Evandro Gussi, president and CEO of the Brazilian Sugarcane Industry Association (UNICA) and USDA Foreign Agricultural Service Administrator Daniel Whitley.

While the topic was avoided during the panel discussion, Gussi was asked directly by an audience member about what should be done about the tariff. “You are right and Brasilia isn’t wrong,” he began. “I’m not saying who is right.”

Gussi then explained that there are regional differences within Brazil and the U.S. tariff rate quota on sugar also plays a role. “It’s a political issue,” he says.

Whitley asked Gussi how that type of protectionism can work if Brazil is trying to open other markets to ethanol. “I am a partner to try to solve this problem,” Gussi said.

Listen to that segment and/or the full panel below:
NEC22 trade panel segment on Brazil tariffs (4:54)

NEC22 Outlook for Trade panel (1:13:25)

Audio, Brazil, Ethanol, Ethanol News, Exports

Argonne Debunks Recent Negative Ethanol Study

Cindy Zimmerman

Experts with the Department of Energy’s Argonne National Laboratory, Purdue University, and the University of Illinois system have just published an assessment finding major flaws in a recent paper that made unfounded allegations about the greenhouse gas benefits of ethanol compared to gasoline.

Responding to the report Environmental Outcomes of the US Renewable Fuel Standard, which was led by Tyler Lark of the University of Wisconsin, the authors stated, “After a detailed technical review of the modeling practices and data used by Lark et al., we conclude that the results and conclusions provided by the authors are based on several questionable assumptions and a simple modeling approach that has resulted in overestimation of the GHG emissions of corn ethanol.”

Among the “questionable assumptions” in the disputed report:
The land-use changes identified by Lark et al. likely reflect the conversion of fallow or idle land to crops rather than permanent grasslands.
Lark et al. likely overestimated soil organic carbon (SOC) loss by a factor of two to eight as a result of the incorrect application of carbon response functions. The authors noted that “the validation of the SOC emissions model used by Lark et al. … showed remarkably poor fit to measured SOC changes.” This is important, since a foundational assertion in the recent study was that emissions related to land-use change are higher than commonly recognized.
Lark appeared to have double-counted the emissions of nitrous oxide—a greenhouse gas—from the use of fertilizer in corn production by adding them in while overlooking the fact that they are already included in the corn-farming-related emissions in the main lifecycle assessment models.

Renewable Fuels Association President and CEO Geoff Cooper said it is unfortunate that such a flawed report about ethanol made headlines despite its obvious errors. “Now that light has been shown on these flaws, we call on the news media to correct the record—particularly those who were so quick to report this now thoroughly debunked attack. Ethanol is a renewable, domestically produced fuel that is lower in cost and lower in carbon than gasoline. Today more than ever, it’s also vital for energy security.”

Ethanol, Ethanol News, RFA

Home Front Energy Bill Would Boost E15

Cindy Zimmerman

A bipartisan bill introduced by members of the U.S. House would expand the production and availability of American biofuels.

The Home Front Energy Independence Act, introduced by Reps. Angie Craig (D-MN), Randy Feenstra (R-IA), Cheri Bustos (D-IL) and Ashley Hinson (R-IA), would make E15 available year-round, establish an E15 tax credit and extend the tax credit for biodiesel, and direct the EPA to finalize their E15 labeling rule. U.S. Senators Amy Klobuchar (D-MN) and Joni Ernst (R-IA) introduced companion legislation in the Senate last week.

The bipartisan legislation will also codify into law full restrictions on U.S. purchases of Russian oil until the president determines Russia recognizes the sovereignty and territorial integrity of Ukraine. The current excess ethanol capacity domestically is nearly the same as the amount of Russian gas the U.S. had been importing – roughly 83 million barrels versus 87 million barrels.

“This commonsense legislation would bring immediate economic relief to American families who are experiencing unprecedented pain at the pump, while simultaneously reducing emissions of greenhouse gases and tailpipe pollutants linked to cancer, heart disease, and respiratory illnesses,” said Geoff Cooper, President and CEO of the Renewable Fuels Association. “Not only would the bill eliminate dependence on Russian oil imports, but it would also ensure that those imports are replaced by more affordable renewable fuels produced right here in America’s heartland.”

Biodiesel, E15, Ethanol, Ethanol News

1000 Biofuel Supporters Sign Letter to White House

Cindy Zimmerman

The Renewable Fuels Association (RFA) is sending a letter to the White House today signed by more than 1,000 farmers, workers in the ethanol industry, and other biofuel supporters asking President Biden to help lower gas prices immediately by allowing broader use of lower-cost ethanol blends like E15.

“Simply allowing gasoline blenders to sell E15 year-round would instantly help moderate prices at the pump and deliver relief to American families,” the letter states. “Today, E15 is selling for 10-25 cents per gallon less than standard gasoline, meaning year-round use of the fuel would save the average American household at least $125-200 on its annual gasoline bill. Those savings would accrue immediately while also providing energy, environmental and economic benefits for the long-term.”

The letter was signed at the 2022 Commodity Classic by farmers and biofuel supporters from 30 states who specifically urge President Biden to take emergency action to allow the uninterrupted sale of E15 throughout the upcoming summer.

Ethanol, Ethanol News, Renewable Fuels Association, RFA

Ethanomics 101: How More Ethanol Lowers Gas Prices

Cindy Zimmerman

Everyone can agree that the price of gasoline is higher than it has ever been. However, no one seems to agree on any way to make it lower, even though an obvious answer is staring us right in the face – ethanol. According to the Renewable Fuels Association (RFA), it’s simply a matter of Ethanomics 101. Listen up, class!

Increased Ethanol Use Will Help Ease the Price Of Gasoline

Ethanol costs significantly less than gasoline. As of March 8, 2022, the price of gasoline was $3.68/gal (April RBOB futures), while the ethanol spot price was $2.55/gal. That is, ethanol is currently trading at a $1.13 per gallon discount to gasoline.

In addition, each gallon of ethanol comes with a free Renewable Identification Number (RIN) attached, which was worth $0.98 on Tuesday. The price differential and RIN value can be seen in significantly lower retail prices for 15% ethanol blends (E15) and especially E85 versus regular unleaded at the pump across the country.

US Ethanol Can Fully Offset Russian Gasoline-Equivalent Import Volumes

Russia accounted for 7% of combined U.S. imports of crude oil and products over the last three years. If the unused capacity in the U.S. ethanol industry were brought online, the additional production could fully replace the amount of gasoline we have been getting via Russian petroleum imports.

How?
The gasoline-equivalent volume of Russian imports averages about 1.7 billion gallons per year (bgy).
U.S. ethanol production capacity is 17.7 bgy. Over the last month, ethanol production has averaged 15.6 bgy on an annualized basis. The unused capacity of 2.1 bgy can fully offset the 1.7 bgy of gasoline-equivalent imports from Russia that are now banned.

In addition, we have current ethanol stocks of 1.1 billion gallons, equivalent to nearly 30 days’ usage, which can be utilized while ethanol production ramps up toward full capacity.

Any questions?

Ethanol, Ethanol News, Renewable Fuels Association, RFA

RFA CEO Responds to Atlantic Editorial

Cindy Zimmerman

Renewable Fuels Association president and CEO Geoff Cooper penned the following response to an article in The Atlantic this week by David Frum alleging that using less ethanol could help Ukraine.

By Geoff Cooper

In nearly 20 years of advocating for American renewable fuel producers and farmers, I’ve seen my share of baseless accusations, uninformed rhetoric, and outright misinformation about corn ethanol. But in those two decades, I have rarely seen an attack as ignorant, incoherent, and insulting as the bizarre tirade recently launched against ethanol by David Frum in The Atlantic (“Ethanol: The Fuel that Powers Putin”).

One of the first rules of effective debate is to never repeat the deceiving arguments of your opponent, so I won’t go into detail on Mr. Frum’s specious allegations about the impacts of ethanol on global grain markets and food security. But the crux of his cockamamie contention is that expanded U.S. ethanol production has somehow “strengthened Russia’s grip upon the world’s food supply” because American farmers today are producing more corn for domestic use and less wheat for export than they did in the 1980s. This is completely absurd.

Wheat’s decline in the United States began decades before commercial-scale ethanol production even began. The amount of U.S. cropland planted to wheat peaked in 1981 at 88 million acres, ironically, in response to President Reagan’s lifting of a U.S. grain embargo against Russia (the embargo, incidentally, had been put in place by President Carter following the Soviet Union’s invasion of Afghanistan). Ethanol was barely an idea at that time.

(Click to read the entire editorial from RFA)

Ethanol, Ethanol News, Renewable Fuels Association, RFA

Ethanol Report on RFA and NCGA

Cindy Zimmerman

The Renewable Fuels Association presented its annual Industry Award to the National Corn Growers Association this year in recognition of the close partnership between the two groups over the last 40 years in moving the ethanol industry forward.

The award was presented at the 27th annual National Ethanol Conference in New Orleans in February, and last week RFA joined NCGA in New Orleans for the 2022 Commodity Classic as the conflict in Ukraine escalated and gas prices skyrocketed.

In this edition of The Ethanol Report, we hear from RFA President and CEO Geoff Cooper, NCGA CEO Jon Doggett, NCGA chairman John Linder, NCGA president Chris Edgington, and Secretary of Agriculture Tom Vilsack, all from the Commodity Classic.

Ethanol Report 3-14-22 (12:36)

The Ethanol Report is a podcast about the latest news and information in the ethanol industry that has been sponsored by the Renewable Fuels Association since 2008.

Choose an option to subscribe

Audio, Commodity Classic, corn, Ethanol, Ethanol News, Ethanol Report, NCGA, Podcasting, Renewable Fuels Association, RFA

Secretary Vilsack Addresses #Classic22

Cindy Zimmerman

Secretary of Agriculture Tom Vilsack made only his second in-person appearance at a large agricultural event since taking office last year when he addressed the 2022 Commodity Classic in New Orleans Friday and thousands of corn, sorghum, soybean, and wheat farmers.

He talked about the situation in Ukraine and being able to hear from the agriculture minister from that country who was speaking to them from a bunker. “As I listened to him, it impressed upon me the importance of all of us who live in a free and democratic country never to take that privilege for granted,” Vilsack said to applause.

The secretary got a standing ovation when he talked about the role biofuels can play in lowering record high fuel costs. “We know and I know and you know that E15 can do that and B20 can do that,” he said.

During his press conference, Vilsack had little else to add when asked about what can be done to increase the use of higher ethanol blends to offset higher gas prices. “You can expect announcements of increased use in the sense that we are putting $100 million of USDA resources out to expand the resources to make E15 more available,” said Vilsack, adding that he could not speak for other federal agencies, meaning that USDA is not able to make any decisions regarding retail sales of E15 in the summer months. “It’s clear from the marketplace that there is a price differential (between ethanol and gas) and we would obviously support whatever steps are necessary.”

Secretary Vilsack remarks (32:11)

Vilsack press conference (24:24)

Audio, Biodiesel, biofuels, Commodity Classic, E15, Ethanol, Ethanol News, USDA

RFA Promotes Higher Ethanol Blends at #Classic22

Cindy Zimmerman

The Renewable Fuels Association is back in New Orleans this week at the 2022 Commodity Classic promoting higher blends of ethanol at the trade show.

For one, they are giving farmers a chance to sign a letter to President Biden urging him to use more ethanol to help moderate soaring gas prices. “Today ethanol is selling for about a dollar a gallon less than gasoline,” said RFA President and CEO Geoff Cooper. “Obviously, if you are able to blend more ethanol, it’s going to result in a lower cost product for the consumer.”

In this interview, Cooper talks about other ways they are trying to get the administration to unleash the power of higher ethanol blends, and the great partnership between RFA and corn growers.
Classic 22 Interview with Geoff Cooper, RFA (6:10)

In addition, RFA has its new flex-fuel Hauk Designs Can-Am X3 on display. “We took this thing from 170 horsepower all the way up to about 220, so it’s a rocket on four wheels…demonstrating that nearly every engine on the planet can be converted to use a higher blend of ethanol,” said RFA Vice President for Industry Relations Robert White.

The Can-Am X3 project is being featured on Season 4 of the popular Hauk Machines television program and White says mini-episodes of the show are starting to air now on RFA social media.

In this interview, White talks about some of the plans RFA has for the vehicle.
Classic 22 Interview with Robert White, RFA (5:24)

Audio, Commodity Classic, corn, E15, E85, Ethanol, Ethanol News, Renewable Fuels Association, RFA

Wisconsin Capital Moving Fleet to B100

Cindy Zimmerman

The City of Madison, Wisconsin will soon be seeing emissions reductions after 17 fleet vehicles have been converted to operate on 100% biodiesel, thanks to a partnership with Optimus Technologies and Renewable Energy Group.

Over the lifecycle of the fuel, biodiesel can reduce greenhouse gas emissions by up to 86% when compared with petroleum diesel. Utilizing Optimus Technologies proprietary Vector System, a simple vehicle add-on that works in conjunction with the conventional diesel components, fleets can operate on B100 year-round.

“Optimus’ Vector System is in use in cities across the U.S. like Washington, D.C. and the City of Chicago where we’re eliminating carbon emissions from critical public services such as refuse collection and snow removal,” said Colin Huwyler, CEO of Optimus Technologies. “These applications require severe-duty trucks with the ability to perform in the harshest conditions without compromising reliability or performanc.”

The City of Madison vehicles were installed with the Vector System at the end of last month, and will begin operating on B100 in the coming weeks. The 17 vehicles that were converted include three dump trucks, 12 garbage trucks, one 644kh loader and one wood grinder.

Biodiesel, REG