U.S.-Japan Alliance Includes Ethanol as Carbon Reducer

Cindy Zimmerman

President Biden and Japan Prime Minister Kishida

President Joe Biden and Japanese Prime Minister Fumio Kishida last week announced several new strategic initiatives to further advance the U.S.-Japan Alliance, including the importance of ethanol as a decarbonization solution within the transportation sector.

A Joint Leaders’ Statement issued by the White House stated, “We intend to advance widespread adoption of innovative new clean energy technologies, and seek to increase the globally available supply of sustainable aviation fuel or feedstock, including those that are ethanol-based, that show promise in reducing emissions.”

The U.S. ethanol industry, including the Renewable Fuels Association, U.S. Grains Council (USGC) and Growth Energy, expressed appreciation for the words of support and the work of government agencies advocating for grain-based ethanol in their international discussions.

“We thank the Biden Administration for its ongoing assistance in promoting U.S. ethanol abroad. Through our continued joint efforts to showcase U.S. ethanol benefits to the global community, we are collectively leading the transition to a low-carbon economy and supporting international climate commitments for a net-zero future.”

Ethanol, Ethanol News, Exports, Trade

RFA Concerned About Loss of USDA Reports

Cindy Zimmerman

The Renewable Fuels Association (RFA) is urging USDA’s National Agricultural Statistics Service (NASS) to reconsider its plan announced last week to discontinue all County Estimates for Crops and Livestock beginning with the 2024 production year.

“With the rapid emergence of state and federal climate policies that will compel ethanol producers to carefully track certain feedstock characteristics, the availability of robust county-level data has never been more important,” said RFA President and CEO Geoff Cooper in a letter to NASS Acting Administrator Joseph Parsons.

In particular, with several federal agencies working to develop a version of the GREET life cycle analysis model that will be used to estimate sustainable aviation fuel emissions, the availability of granular, county-level data is crucial. Cooper writes, “It is anticipated that climate-smart farming practices will be recognized in this version of GREET. Moreover, some expect that county-level, or even farm-specific, carbon intensity scoring could be allowed under the IRA tax credit programs at some point in the future. For the USDA to discontinue reporting of high-resolution, annual crop yield data at a time when those data are needed for incorporation into the GREET model array and/or for use in the verification of farm-specific estimates would be regrettable.”

“NASS data will be relied upon in new and important ways as climate-smart farming practices are adopted,” said Cooper.

corn, Ethanol, Ethanol News, Renewable Fuels Association, RFA, USDA

More Voices Push for Summer E15 Waivers

Cindy Zimmerman

This week, 46 members of Congress and 15 Iowa fuel retailers added their voices to those urging the Biden administration to issue waivers to permit the sale of E15 for the 2024 summer driving season.

Representative Dusty Johnson (R-SD) and two dozen other members of the U.S. House sent a letter calling on President Biden to direct EPA to allow the sale of E15 fuel during the summer months (June 1-September 15, 2024). While the year-round sale of E15 will be permissible in some states beginning in 2025, it will still be prohibited this year beginning on June 1, unless EPA takes action.

On the Senate side, John Thune (R-SD) and Dick Durbin (D-IL) led an effort that included 18 other colleagues in a similar letter sent to the president.

“We thank these lawmakers, working across the aisle in both the House and Senate, for calling on the Biden administration to quickly take action to allow the nationwide sale of E15 through the coming summer,” said Renewable Fuels Association President and CEO Geoff Cooper. “These senators and representatives understand that, with current fuel supplies lower than the last two summer driving seasons and the market pressures of ongoing geopolitical conflicts, it is imperative that consumers have access to this American-made supply of lower-cost, cleaner fuel.”

Meanwhile, 15 Iowa retailers sent their own letter to President Biden asking for the summer waivers.

“Now more than ever, we want to keep selling E15, and our customers want to keep buying E15 to save money. While we support the solution for 2025 and beyond, we are encouraging the administration to use its waiver authority to permit the sale of E15 fuel for the 2024 summer driving season and extend the Reid Vapor Pressure (RVP) waiver from June 1 through September 15,” stated the letter.

The retailers who signed the letter were: Maverick/Kum & Go, Growmark FS, New Century FS, New Cooperative, Five Star Cooperative, Sundstop LLC, Zubs Shop, Cresco Fast Stop, Cubby’s, RocStop, RAM Inc., The Corner Store, Linn Coop Oil Co., Thomson’s Filling Station, and Farmers Mutual Town & Country.

Nearly 1,000 farmers and ethanol industry workers signed a letter last week to President Biden also urging immediate action on E15.

E15, Ethanol, Ethanol News

WASDE Increases Corn for Ethanol Use

Cindy Zimmerman

USDA’s April World Agricultural Supply and Demand Estimates (WASDE) released Thursday forecasts greater corn used for ethanol and feed and residual use and smaller ending stocks.

Corn used for ethanol is raised 25 million bushels to 5.4 billion based on data through February from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of March. Feed and residual use is increased 25 million to 5.7 billion based on indicated disappearance.

U.S. corn exports remain unchanged at 2.1 billion bushels. Global coarse grain production for 2023/24 is forecast 2.3 million metric tons lower to 1,505 million with declines in production, trade, and ending stocks. Foreign corn production is forecast lower as cuts for South Africa, Argentina, Mexico, and Moldova are partially offset by increases for the EU and the Philippines.

corn, Ethanol, Ethanol News, Grains, USDA

Grassley Hearing GREET Model Update Rumors

Cindy Zimmerman

Iowa Sen. Chuck Grassley is unhappy with what he has been hearing about the GREET model updates for sustainable aviation fuel expected soon from the Biden Administration.

“We understand that this model might say that you can use (corn as a) feedstock but it will have to be grown in one of three conditions – minimum tillage, cover crops, or these new corn planters where you have very precise application of chemicals or fertilizer,” said Grassley in his weekly call with agricultural reporters on Tuesday.

The problem with that, he says, “we commingle our grain when it gets to the local elevator. And you can’t tell one kind of corn from another kind of corn” making it easy to violate the formula. As a result, Grassley says, one of two things will happen. “Either we get all of our corn into the formula or you’re not going to get any corn into the formula.”

Since USDA is one of the agencies involved in the GREET model updates, Grassley said he hopes they make it “very clear to the other three departments that are involved in this decision making, because this is a stupid approach. From the standpoint of both the need for new aviation fuel to fight global warming and the ability to produce that amount of fuel is going to be impeded.”

Listen to Grassley’s comments below:
Sen. Grassley press call 4-9-24 16:58

Audio, corn, Ethanol, Ethanol News

Ethanol Industry Seeks Permanent End to Brazil Tariff

Cindy Zimmerman

This week, the U.S. ethanol industry submitted comments to the Brazilian government seeking a permanent end to that country’s tariff on imported U.S. ethanol.

The Renewable Fuels Association, U.S. Grains Council and Growth Energy jointly submitted comments within the Brazilian Chamber of Foreign Trade (CAMEX) regarding the 18% Brazilian tariff on all incoming U.S. ethanol, while Brazilian ethanol imports enjoy free access within the U.S. market.

The comments were submitted in Portuguese in response to a formal request made in October 2023 by ABICOM, the Brazil association of fuel importers, to drop the ethanol duties because data showed the tariff raised fuel costs for domestic consumers.

“Considering this significant discrepancy in our historically productive commercial relationship between countries, we would like to stress that the U.S. industry will continue to advocate for restrictive measures to entry for Brazilian ethanol into the U.S., in the case that the Brazilian government does not rethink the current tariff policies…. Despite the promising opportunities emerging new ethanol export markets could bring to both countries, we stress that we are not willing to cooperate with Brazil in any possible partnerships, nor with technology transferring or within new uses for ethanol such as SAF, in case the market is not completely open for free trade for ethanol. We strongly consider the permanent reinstatement of the duty-free access for ethanol as a window of opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States.”

News reports out of Brazil on Wednesday quoted Agriculture Minister Carlos Fávaro at a sugar cane industry conference saying they will maintain the tariff to protect Brazilian producers.

Brazil, Ethanol, Ethanol News, Exports

New Tailpipe Emissions Rules Would Impact Corn Demand

Cindy Zimmerman

The National Corn Growers Association reports new tailpipe emissions rules would be a “major shock on demand for corn used to produce ethanol” that could result in potentially devastating impacts on farmers and the rural economy.

EPA’s recently released final rule for multi-pollutant emissions standards for model years 2027 and later light-duty and medium-duty vehicles dictates that sales of non-electric vehicles will drop from over 92% of new vehicle sales in 2023 to under 30% of new vehicle sales in 2032 which translates to a 6.9-billion-gallon reduction in motor gasoline use in 2032, a 5.7% decline from the baseline projection for that year.

The rule’s requirement that drivers migrate to electric vehicles much faster than the market-driven adoption curve reflected in the baseline results in major declines in corn demand in a short period of time. U.S. corn growers would lose more than 550 million bushels of demand from 2027 to 2032 as compared to the baseline for E10 blends. As illustrated below, the annual loss in corn demand is over 1B bushels per year by 2041. That’s a loss of nearly a quarter of the total expected corn use in E10/E15 ethanol blends for this year.

The National Corn Growers Association has been advocating for movement to nationwide E15. While this wouldn’t change the tailpipe emissions ruling impact, it would provide much-needed relief to corn farmers. In fact, the move would increase corn used in E10/E15 blends by more than 2 billion bushels in 2027 and provide a long-term offset to the rule’s otherwise devastating hit to corn demand. It would also offer consumers lower fuel prices at the pump and provide a lower emissions product that can protect the environment during the vehicle transition.

Read more from NCGA

corn, EPA, Ethanol, Ethanol News, NCGA

Iowa Farmers Encouraged to Try Higher Biodiesel Blends

Cindy Zimmerman

The Iowa Renewable Fuels Association (IRFA) is once again offering the statewide On-Farm Biodiesel Credit Program that offers farmers who buy a biodiesel blend up to 50 cents per gallon.

“This is a great opportunity for farmers to try higher blends of biodiesel on their farm like B20, especially if they have previously used B11,” said IRFA Marketing Director Lisa Coffelt. “It truly goes to show that farmers are willing to use higher biodiesel blends in their farm operations. This program is a fantastic opportunity for farmers, and we would love to see more take advantage of these credits while using homegrown fuel. Especially when we’ve seen on-farm use of B20 increase by five times, according to the 2023 Retailers Motor Fuel Gallons Report.”

The program is managed by IRFA and supported by the Iowa Soybean Association and Iowa Biodiesel Board as well as biodiesel producers Western Iowa Energy, Western Dubuque Biodiesel and Chevron Renewable Energy Group. Biodiesel is supported by both John Deere and CASE IH engines.

Farmers will earn 25 cents per gallon for filling up with B11 (11 percent biodiesel) and 50 cents per gallon with B20 (20 percent biodiesel) up to a maximum credit of $500. Program funding is limited and will be awarded on a first-come, first-serve basis. To be eligible, farmers must meet the criteria and follow the procedures outlined at https://iowarfa.org/iowa-on-farm-biodiesel-credit-program/.

Biodiesel, Iowa RFA

RFA Provides Input to GREET Working Group

Cindy Zimmerman

As the clock continues to tick, the Sustainable Aviation Fuel Interagency Working Group continues its work on a modified GREET model for the 40B SAF tax credit.

The Renewable Fuels Association this week provided some input to the working group regarding what time period should be used for land use change (LUC) emissions accounting under the new model. In a letter to the agency heads, RFA President and CEO Geoff Cooper explained why the time period should be 30 years.

EPA’s 2010 RFS lifecycle GHG analysis (and subsequent EPA rulemakings) used a 30-year timeframe to account for LUC emissions. Treasury has already determined that EPA’s 2010 RFS lifecycle analysis methodology, which integrates a 30-year time profile for LUC emissions accounting, satisfies the criteria of 211(o)(1)(H). Thus, using anything other than a 30-year period (e.g., 20 or 25 years) for the upcoming 40B(e)(2) GREET model would likely render the new model inconsistent with the requirements of CAA 211(o)(1)(H), as interpreted and implemented by EPA.

The working group – which consists of USDA, EPA, Energy, and Treasury – had set a March 1 deadline to announce the modified model, but has yet to give any indication when it may happen at this point. The clock is ticking because the 40B applies to fuel used or sold after 2022 and before 2025, or by the end of this year. The tax credits were included in the Inflation Reduction Act passed by Congress in 2022.

Ethanol, Ethanol News, Renewable Fuels Association, RFA

Ethanol Exports Down 7%, DDGS Up 9%

Cindy Zimmerman

February U.S. ethanol exports slipped seven percent, while exports of the animal feed co-product dried distillers grains (DDGS) rebounded nine percent, according to the latest analysis from the Renewable Fuels Association.

Ethanol exports in February totaled 139.0 million gallons (mg), with Canada as the top destination for the 35th consecutive month despite a 17% decline from January. “Exports surged to the United Kingdom (up 53% to 21.2 mg) and Colombia (up 93% to 15.0 mg) but volumes tempered to India (down 59% to 13.4 mg) and the European Union (down 39% to 9.7 mg). Escalating exports to other larger markets helped curb the slippage, including Singapore (6.0 mg, +501%), Mexico (5.8 mg, +5%), Peru (5.7 mg, +133%), and Jamaica (4.0 mg, +1040%). Notably, exports to Japan marked a 4-year high of 1.7 mg following concerted efforts to enlarge the market, while Brazil was again absent. Year-to-date ethanol exports totaled 289.0 mg, a whopping 30% ahead of last year at this time.”

Exports of DDGS in February totaled 986,337 metric tons (mt) on mixed markets. “Shipments to Mexico, our largest customer for the second straight month, climbed 4% to 259,658 mt—the nation’s second-largest monthly imports on record. South Korea imports of U.S. DDGS slipped 10% to 132,457 mt while volumes rallied to Indonesia, up 20% to 86,304 mt. The remaining half of February exports shipped to forty countries, including significant yet declining volumes to Vietnam (65,146 mt, down 8%), Japan (51,051 mt, down 11%), Canada (49,588 mt, down 24%), and Colombia (33,477 mt, down 26%). Year-to-date DDGS exports totaled 1.89 million mt, which is 23% more than last year at this time.”

Ethanol, Ethanol News, Exports, Renewable Fuels Association, RFA