Analyst Caps Ethanol Demand at 15 Billion Gallons

Cindy Zimmerman

The most popular session at the annual ASTA CSS & Seed Expo is always the agricultural economy update by Dan Basse, AgResource Company, and this year was no exception as he opened the general session for the seventh year.

Basse offered his insights on this year’s yields, impact of African Swine Fever in China, the ABU countries (Argentina, Brazil, Ukraine), and much more.

When it comes to demand drivers for U.S. corn and soybeans, Basse says they are mostly flat at this point, including ethanol, which he calls now “mature” and sees little or no growth going forward.

“When I get to 2022, I still believe we’re going to be looking at 14 and a half or 15 billion gallons of ethanol, no matter what politicians do,” said Basse, in response to a question after his remarks.

Listen to the question and answer here:
ASTACSS19 Dan Basse, AgResource, ethanol comments

Listen to Basse’s full presentation and interview with highlights below:
ASTACSS19 Remarks by Dan Basse, AgResource

ASTACSS19 Interview with Dan Basse, AgResource

2019 ASTA CSS & Seed Expo photos

Audio, corn, Ethanol, Ethanol News

Trade Groups Push Congress on Biodiesel Tax Extension

Cindy Zimmerman

Executives from nearly a dozen national trade associations sent a letter to Congressional leaders last week highlighting the urgent need for Congress to extend the expired biodiesel tax incentive before the end of the year.

The groups included the National Biodiesel Board, American Soybean Association, American Farm Bureau Federation, National Farmers Union, Advanced Biofuels Association, among others.

The association executives state in the letter, “There is broad bipartisan support for the biodiesel tax credit, and we believe that Congress can, and must, pass an immediate extension before returning home at the end of the year.”

“America’s farmers and rural communities are facing overwhelming economic uncertainty right now due to policy instability. They are waiting for Washington to complete work on trade deals and stabilize markets for U.S. agricultural output in China, Canada and Mexico. The economic hardships are spreading throughout the economy,” the executives write.

“One thing Congress can do before the end of the year to help rural economies and provide some policy stability is extend the expired biodiesel and renewable diesel tax incentive.”

Kurt Kovarik, NBB’s VP of Federal Affairs, adds, “Biodiesel producers simply can’t wait any longer. Ten facilities have been shuttered this year, and more are on the verge of making that painful decision. More than 250 million gallons of production is now offline, idling hundreds of workers and impacting thousands of jobs. Our industry needs Congress to act before the end of the year to stop more shutdowns and job losses.”

advanced biofuels, Biodiesel, biofuels, NBB

RFA Stresses Ethanol Benefits at COP25

Cindy Zimmerman

The Renewable Fuels Association told world leaders meeting this week in Madrid that low-carbon ethanol is an economical and proven solution for fighting global climate change.

RFA Vice President of Regulatory Affairs Kelly Davis is attending the U.N. Climate Change Conference (COP25) with a small delegation of U.S. farm and biofuel industry leaders to promote the environmental benefits of ethanol for the world. “Renewable fuels like ethanol hold tremendous promise for helping individual countries meet their GHG reduction commitments, while also stimulating rural and farm economies and reducing oil dependence,” Davis said. “We have established new relationships and strengthened existing bonds this week, and I look forward to continuing our work together to expand the global market for low-carbon renewable fuels.”

RFA is highlighting a recent study by Life Cycle Associates that found biofuel consumption under the U.S. Renewable Fuel Standard (RFS) has already resulted in greenhouse gas emissions reductions of nearly 600 million metric tons, far exceeding the Environmental Protection Agency’s original expectations. In addition, Davis is sharing recent USDA research that shows today’s corn ethanol reduces GHG emissions by 43% compared to gasoline, with the potential reduction reaching up to 70% in the next three years.

Finally, RFA is also sharing information showing that ethanol has played an important role in achieving California’s GHG reduction goals under the state’s Low Carbon Fuel Standard (LCFS). Ethanol is responsible for reducing California GHG emissions by 21 million metric tons—or nearly 40% of the total emissions reductions achieved to date under the LCFS.

Ethanol, Ethanol News, Exports, International

Iowa Governor Moves State Vehicles to B20

Cindy Zimmerman

During an appearance at the Iowa Farm Bureau annual meeting in Des Moines Tuesday, Governor Kim Reynolds signed an executive order requiring that all new state vehicles with diesel engines must be approved to run on B20 biodiesel (a blend of 20% biodiesel and 80% petroleum-based diesel) or more

“Biodiesel is a growing and vital industry in Iowa, and I will always work tirelessly for the continued expansion of the biofuels market,” said Gov. Reynolds. “Ethanol and biodiesel remain essential to the health of the agricultural economy, sustainable environmental commitments and employ thousands of Iowans. I am proud to stand alongside Iowa Farm Bureau and key stakeholders in the renewable fuels industry to secure the continued demand for biofuels.”

The executive order is intended to encourage increased production of engines expressly approved for B20, and Iowa Renewable Fuels Association (IRFA) President Derek Winkel says it sends a strong market signal to diesel engine manufacturers. “If we are serious about reducing greenhouse gas emissions from the transportation sector and boosting Iowa’s rural economy, we should be looking for new ways to increase biodiesel use. This proclamation by Governor Reynolds sets the state of Iowa on a course to do exactly that by ensuring all new diesel vehicles can use higher biodiesel blends.”

Iowa is the country’s number one producer of biodiesel, producing 365 million gallons in 2018. The state’s 11 plants have the capacity to produce 400 million gallons annually.

Biodiesel, Iowa RFA

Researching Ways to Turn Biorefinery Waste into New Products

Cindy Zimmerman

A research team at the South Dakota School of Mines & Technology is beginning work on new methods to turn biorefinery waste into valuable industrial products.

A pilot scale testing facility for one of the processes set to be established at SD Mines. Pilot scale processing of corn stover will be performed at Idaho National Lab, SD Mines and Southwest Research Institute (SwRI) to make products such as carbon nanofibers, lactic acid, phenol, and battery grade biocarbon. These valuable products have wide ranging use in industry, from disinfectants to carbon fiber materials to batteries and fuel. The products that can be created with these processes include clean-burning oils, “This can be blended with commercial bio-diesel and used in diesel generators,” says Vinod Amar, Ph.D., a SD Mines research scientist working on the project.

Some of the partnering institutions on this project will also have processing facilities including, Old Dominion University (ODU), Virginia Commonwealth University (VCU), Idaho National Laboratory (INL) and Southwest Research Institute (SwRI).

Ethanol, Ethanol News

NBB Asks EPA To Properly Account for SREs

Cindy Zimmerman

The National Biodiesel Board (NBB) comments on EPA’s supplemental proposal for 2020 renewable volume obligations urge the agency “to properly account for small refinery exemptions, address the remand of the 2016 standards, and increase the 2021 biomass-based diesel volume.”

NBB is encouraging EPA to use a three-year average of the gallons EPA actually exempted. “Unfortunately, the proposal uses an average of past exemptions recommended by the Department of Energy (DOE) rather than an average of actual volumes waived,” NBB writes. “Because EPA has ignored DOE’s recommendations in each of the past three years, that methodology would only account for about half of the annual impact of recent small refinery exemptions.”

NBB also points out that EPA does not propose to do anything about small refinery exemptions before 2020. “Over 4 billion gallons of demand for biofuels has been lost due to retroactive small refinery exemptions for compliance years 2015 through 2018. This impact has been particularly significant for biomass-based diesel producers because biomass-based diesel RINs can be used to satisfy multiple obligations under the RFS,” NBB writes. “Despite having the means to do so, EPA has not proposed to do anything in the Supplemental Notice to address this massive loss of renewable fuel demand.”

Biodiesel, EPA, NBB

RFA Urges EPA to “Just Follow the Law”

Cindy Zimmerman

The comment period on EPA’s supplemental proposal for 2020 renewable volume obligations ended on Friday, and the Renewable Fuels Association’s message in comments submitted was simple when it comes to implementing blending obligations under the Renewable Fuel Standard: Just follow the law

RFA’s comments highlight the fact that the Clean Air Act requires EPA to “ensure” that the RFS volumes specified by Congress are fully enforced. By issuing dozens of small refinery exemptions and refusing to reallocate the lost volume, EPA has failed to comply with this legal obligation in recent years.

“The congressional intent is indisputable and unambiguous, and the law is clear,” according to RFA President and CEO Geoff Cooper. “Unfortunately, the EPA has forsaken the law in recent years by failing to ensure the congressionally directed renewable fuel volume requirements are enforced. EPA issued 85 retroactive small refinery exemptions for the 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.04 billion gallons.”

While EPA’s supplemental proposal takes a step in the right direction, it doesn’t go far enough in ensuring that the congressional RFS volumes are fully enforced. “If past is prologue, EPA’s proposal could result in the 15-billion-gallon requirement sliding backward to a requirement for just 14.4 billion gallons in 2020,” according to the comments.

RFA said the agency can get the RFS back on track and uphold President Trump’s commitment to farmers by fully redistributing renewable fuel blending requirements that are waived due to small refinery exemptions.

Cooper talked about RFA’s opinion of the supplemental rule in this interview from the recent NAFB convention.
NAFB19 Interview Geoff Cooper, Renewable Fuels Association (11:10)

Audio, EPA, Ethanol, Ethanol News, Renewable Fuels Association, RFA

Comments Rolling in on RFS Rule

Cindy Zimmerman

Comments are rolling in this week proposed supplemental rulemaking to the 2020 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS). The deadline is Friday, November 29, which is a federal work day, but many groups are getting their comments in early this week to take two days for Thanksgiving.

Most comments from biofuel supporters basically center on three main areas, as outlined by American Coalition for Ethanol (ACE) CEO Brian Jennings.
1. The rule fails to reallocate the 85 Small Refinery Exemptions (SREs) from 2016 through 2018
2. It represents a missed opportunity to restore 500 million gallons unlawfully waived from the 2016 compliance year
3. It betrays the deal on how to ensure at least 15 billion gallons in the RFS for 2020 and beyond.

The National Corn Growers Association (NCGA) President Kevin Ross said farmers are once again asking EPA to uphold the law and the integrity of the RFS. “EPA’s proposal does not ensure sufficiently accurate projections for waived gallons and, therefore, will continue to shortchange the RFS when waivers are granted.”

Because the comment deadline is the day before EPA’s statutory Nov. 30 deadline to release final Renewable Volume Obligations (RVO) for next year, the agency will need a little more time to review the comments on the supplemental rule before finalizing. That is expected to come now in mid to late December.

ACE, EPA, Ethanol, Ethanol News, NCGA

RFA Reviews 2020 Vehicle Models for Ethanol Usage

Cindy Zimmerman

The Renewable Fuels Association (RFA) finds good news for E15 but bad news for higher blends of ethanol in its review of 2020 model year vehicles.

The RFA analysis of vehicle owner’s manuals and warranty statements reveals that nearly all new 2020 automobiles are explicitly approved by the manufacturer to use gasoline containing 15 percent ethanol (E15). However, RFA’s annual review also shows automakers are offering far fewer model year 2020 flex fuel vehicles (FFVs) capable of running on blends containing up to 85 percent ethanol (E85).

According to the RFA analysis, manufacturers responsible for 95 percent of U.S. light-duty vehicle sales unequivocally approve the use of E15 in their model year 2020 automobiles. For the first time ever, BMW models will carry the manufacturer’s approval to use E15; in fact, the BMW Group approves the use of up to E25 in its 2020 models, including its line of Mini automobiles.

Among major manufacturers, only Mercedes-Benz, Mazda, Mitsubishi, and Volvo – which collectively represent less than 5 percent of U.S. sales – exclude E15 as an approved fuel in their owner’s manuals.

Meanwhile, automakers continue to dramatically curtail production of FFVs. Only two automakers—Ford and General Motors—are offering FFVs in model year 2020. Just 16 models will be available as FFVs in 2020, with six of those models available only to fleet purchasers. That’s down from more than 80 different models from eight manufacturers being available to consumers as recently as 2015.

RFA encourages drivers to make their voices heard with the auto industry itself by signing an online grassroots petition asking automakers to offer more models designed to run on “high-octane, low-carbon ethanol blends such as E20, E30 and E85.”

automotive, E15, E85, Ethanol, Ethanol News, Flex Fuel Vehicles, RFA

Governors’ Biofuels Coalition Takes Aim at Gasoline Aromatics

Cindy Zimmerman

The Governors’ Biofuels Coalition is asking President Trump to take action on removing toxic aromatics from gasoline.

In a letter to President Trump, coalition chair and vice chair Minnesota Governor Tim Walz and South Dakota Governor Kristi Noem asked him to enforce a provision of the Clean Air Act that requires the reduction and elimination of toxic carcinogenic aromatics from gasoline.

In 1990, Congress passed the landmark Clean Air Act amendments and directed the U.S. Environmental Protection Agency to reduce the dangerous chemical additives in gasoline. Today, almost 30 years later, this vital element of the law has yet to be enforced in any meaningful way. Aromatics, the poisonous chemicals that oil refiners add to all gasoline, remain a significant component of the fuels we use every day.

The governors note that octane options in the 1990s were limited, and cost-effective aromatic substitutes did not exist, but today many options exist, including high-octane biofuels.

“President Trump should order EPA to obey Congress’s long-neglected directive to reduce the toxic compounds in gasoline. By replacing aromatics with cleaner alternatives, the nation will be on the right path to cleaner-burning, less costly fuel. Any other approach is the wrong policy for America,” the governors said.

Ethanol, Ethanol News