Once again, Renewable Fuels Association (RFA) Senior Strategic Advisor Bob Dinneen has prepared his annual tongue-in-cheek list of what’s out and what’s in as we begin this new year ever hopeful that brighter, healthier, and more prosperous days lie ahead.
Ethanol Industry Mourns Loss of Ray Defenbaugh
Biden Wants Zero Emissions by 2025, or 2050
Wheeler Court Decision Could Change Small Refinery Program
Ethanol Plants Can Shift to Hand Sanitizer
Court Strikes Down Small Refinery Exemptions
USDA Secretary Talks Biofuels at #Classic20
RIP Ethanol Industry Leader Bob Sather
President Trump Order Helps Expansion of E15
Study Finds Gas Car Ban Would Hurt Biofuels and Farmers
RFA CEO Offers Outlook for Ethanol’s Future
Like everyone else, ethanol producers will be happy to see the end of 2020 with hopeful hearts that 2021 will be a better year.
In this edition of the Ethanol Report, we take a ride back through the year starting with the high hopes for a great year in January and February, into the devastating impact of COVID-19 restrictions on travel in the spring, the continuing saga of small refinery waivers, celebrating 15 years of the RFS and increases in E15 availability, and ending the road with preparations to work with a new presidential administration.
Comments come from Renewable Fuels Association president and CEO Geoff Cooper, RFA Chief Economist Scott Richman, Senior Strategic Advisor Bob Dinneen, Vice President of Industry Affairs Robert White, Director Of Market Development Cassie Mullen, RFA board members Jeanne McCaherty with Guardian Energy, Randy Doyal with Al-Corn Clean Fuel, Neil Koehler with Pacific Ethanol, and Chuck Woodside of KAAPA Ethanol.
Ethanol Report 12-28-20 (27:11)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.
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Renewable Energy Group and Optimus Technologies recently partnered to help Ames, Iowa grow its fleet of sustainable vehicles.
The City of Ames is adding seven new all-purpose dump trucks to their fleet that have the Optimus Technologies advanced fuel system integrated into their new vehicle specification. The Optimus system enables the engines to operate year-round on 100 percent biodiesel (B100) produced by Renewable Energy Group (REG).
A pilot project was conducted this year with five trucks using Optimus’ Vector System, combined with REG’s B100 biodiesel. The Vector System is designed to enable trouble-free use of biodiesel in all engines in all operating conditions.
Even in the sub-zero operations the snowplows were subjected to while battling the harsh Iowa winter, the Vector System ensured that the vehicles performed flawlessly on biodiesel. One key feature of the Vector System is that it never inhibits the use of conventional diesel fuel; the system always starts and shuts down the engine on conventional diesel, operating on biodiesel only after the engine and fuel system achieve optimal operating conditions.
Agricultural and biofuels groups as well as farm state lawmakers are pleased that the new COVID relief package passed by Congress last night includes help for producers excluded from previous aid legislation.
Sen. John Thune (R-SD) says relief includes the Paycheck Protection Program for Producers Act. “The bill also includes funding to allow the Department of Agriculture to provide additional assistance to ag producers who were dealing with a tough economy before the pandemic hit,” said Thune.
The bill explicitly makes producers of biofuels like ethanol and biodiesel eligible for USDA assistance, at the discretion of the secretary. “Biofuel producers have suffered from the drop in fuel demand during the pandemic and I hope the secretary will ensure that they are able to receive assistance,” Thune said.
Sen. John Thune (R-SD) on COVID relief for agriculture :58The bill also extends key tax provisions that support innovation and expansion in the renewable fuels industry, including the Second Generation Biofuel Producer Tax Credit, Alternative Fuel Refueling Property Credit, and the Section 45Q tax credit for carbon sequestration.
Renewable Fuels Association (RFA) President and CEO Geoff Cooper says the aid is much needed. “More than half of the ethanol industry shut down during the extraordinary demand collapse in the spring, and producers across the country still have not fully recovered from that market shock. The pandemic has cost the industry nearly $4 billion in lost revenue to date, with losses expected to continue well into 2021.”
American Coalition for Ethanol (ACE) CEO Brian Jennings says they were hoping Congress would require USDA to make relief payments to biofuel producers, but he expects Agriculture Secretary nominee Tom Vilsack will be supportive. “Congress gave USDA flexibility to provide relief for biofuel producers in the last stimulus package, but USDA declined to exercise it. That is why job one in 2021 will be to work with incoming USDA Secretary Vilsack, upon his confirmation in the U.S. Senate, to get assistance to the industry in rapid fashion.”
House Agriculture Committee Chairman Collin Peterson (D-MN) says the latest COVID relief deal moving through Congress this week has new provisions to provide help for food and agriculture sectors impacted by the pandemic restrictions, including biofuels.
In addition to a 15 percent increase in benefits for recipients of the Supplemental Nutrition Assistance Program (SNAP) for six months, Peterson pointed specifically to the inclusion of important support for those who were left out earlier assistance, including contract livestock and poultry growers, ethanol producers that saw a drop in demand, and livestock and poultry producers who had to depopulate herds and flocks as a result of supply chain disruptions.
Relief for biofuels producers would come from $11.2 billion for the USDA to be distributed by the Secretary with direction by Congress. Specific language says the Secretary “may make payments to producers of advanced biofuel, biomass-based diesel, cellulosic biofuel, conventional biofuel, or renewable fuels with market losses due to COVID-19.”
Read the full breakdown of the food and agriculture provisions in the bill.
Ace Ethanol co-founder Bob Sather with RFA CEO Geoff Cooper
Now in its 12th year, the program has been named in honor of Bob Sather, who was involved in education before helping to found Ace Ethanol in Wisconsin. Sather, who also chaired the Renewable Fuels Foundation, passed away in June 2020.
The 26th annual National Ethanol Conference will be held in an entirely digital format Feb. 16-18, 2021. Four scholarships are available to cover the cost of the conference registration fee, a $249 value. This year’s digital event, including online networking and on-demand content after the show, will allow students greater flexibility to participate.
Those interested should submit a 500-word essay explaining how their participation in the NEC will help them achieve their future goals. They should also submit one letter of recommendation and an up-to-date resume. Scholarships are only available to students who are attending a U.S. institution of higher learning or foreign students who are affiliated with the U.S. ethanol industry.
For full consideration, applications must be received by February 5.
The U.S Department of Agriculture has announced another round of funding for its successful Higher Blends Infrastructure Incentive Program, or HBIIP. Approximately $22 million is being made available for retailers to add higher ethanol blends like E15 and E85.
The application window will be open for 30 days starting December 21 and ending January 19. Ethanol organizations are offering help to retailers in the application process. Awards to successful applicants will be in the form of cost-share grants for up to 50 percent of total eligible project costs, but not to exceed $3 million.
The Renewable Fuels Association is urging retailers to act quickly.
“We are very proud of our earlier work that helped fuel retailers across the country successfully apply for and receive funding under the HBIIP grant program, and the RFA staff is ready to roll up its sleeves again to help retailers tap into the remaining funds available,” said RFA President and CEO Geoff Cooper.
American Coalition for Ethanol (ACE) Senior Vice President and Market Development Director Ron Lamberty hopes this new round provides a second chance for retailers who got started during the original 90-day time frame but couldn’t complete their grant applications before that window closed.
“We got feedback on the application process from marketers we worked with saying it took too long to gather the information they needed and get the ‘registrations’ they had to complete before they could even apply,” Lamberty said. “Those things are required to do business with the government, and most retailers weren’t expecting that.”
Brazil’s decision to impose a 20 percent tariff on all U.S. ethanol imports is devastating for the U.S. ethanol industry, according to organizations that work to promote ethanol exports.
The leadership of the Renewable Fuels Association, U.S. Grains Council, Growth Energy, and the National Corn Growers Association say the action jeopardizes the future of cooperation and coordination between the U.S and Brazil and “marks a dramatic turn in our bilateral trade relationship.”
“Today, Brazilian ethanol receives unfettered access into the U.S. market, while U.S. producers are denied reciprocal market access due to a restrictive import tariff designed solely to make U.S. product less competitive. This unjust imbalance must be addressed. We urge the incoming Biden Administration to respond with strength, leveraging various U.S. government tools and authorities to make it clear that protectionist barriers are unacceptable. However, it seems clear from today’s decision that Brazil is more focused on keeping U.S. ethanol out of Brazil than true two-way trade.”
American Coalition for Ethanol (ACE) CEO Brian Jennings added. “One of the most urgent priorities for USTR nominee Katherine Tai will be to sit down with her Brazilian counterparts to try and negotiate a much better outcome. Sanity must be restored to Brazil’s protectionist policy toward ethanol trade.”
Since May, U.S. exports to Brazil have fallen to less than 4 million gallons. Over the same time period, Brazil has exported nearly 96 million gallons of fuel ethanol to the United States.
RFA President and CEO Geoff Cooper says the tariff will have an immediate impact on U.S. ethanol exports. “Brazil has been our top market in the past few years and if this tariff remains in place we certainly expect that to change,” said Cooper.
RFA CEO Comments on Brazil ethanol tariff (1:26)
As Congress continues to negotiate a new COVID-19 aid package, the pandemic continues to batter the U.S. ethanol industry and the Renewable Fuels Association (RFA) wants lawmakers to know the challenges producers are facing.
With losses from the pandemic nearing $4 billion, the ethanol industry continues to fight for implementation of the Tenth Circuit Court decision nationwide, and prepares to enter the new year with the uncertainty of having no Renewable Volume Obligations set for 2021.
Added to all of this, Brazil made the decision this week to impose a 20 percent tariff on all U.S. ethanol imports.
RFA held a press conference to provide an update on these issues and more with:
Geoff Cooper, RFA President and CEO
Scott Richman, RFA Chief Economist
Jeanne McCaherty, RFA Chairperson
Erik Huschitt, RFA Vice Chairman
Listen to opening comments from each:
RFA Ethanol Industry Update (27:15)
