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Risk Reoriented

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By Luke Geiver

July 14, 2020

Policy Business Operations Markets 

As the ethanol industry seeks normalcy after the shock wave of COVID-19, new notions about capital investment and risk are surfacing. Experts say what was historically a mediocre margin may be considered a good margin moving forward.

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In Stanley, Wisconsin, Ace Ethanol LLC is becoming a pacesetter in the corn fiber-to-ethanol race after installing D3MAX technology, which gives the plant a strong advantage, both with cellulosic RINs and, potentially, the low-carbon fuels market.

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Southwest Iowa Renewable Energy has had a marathon year, accommodating a presidential visit, managing change and showing poise in the face of a national crisis. A year after Trump's historic drop in, the plant keeps rising to new challenges.

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Even though the pandemic delivered an unprecedented shock, the prospect of a green recovery will ultimately be decided by the strength of our climate policies and the content of our gas tanks. Ethanol-blended gasoline remains a top solution.

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Ethanol destined for industrial-use applications helped stabilize overall U.S. ethanol exports in April and May amid a bleak period for fuel demand globally, according information published by the U.S. Grains Council.

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Electrostatics, used for decades in other industries, show promise in high-protein feed production at ethanol plants. The technology could be useful at a time when the industry faces unprecedented challenges and needs new sources of revenue.

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A novel engine technology could make it possible for ethanol to be used in compression-ignition engines, opening up a potential multi-billion-gallon market. With $3 million in financing secured, Clear Flame Engines is poised for commercialization.

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Business Briefs

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By Ethanol Producer Magazine

July 13, 2020

News from the July issue of Ethanol Producer Magazine, including DuPont's new enzyme blend, the deferment of the 2020 Export Exchange, sequestration funding, monarch habitat, and Aemetis' and Pacific Ethanol's high-grade alcohol strategies.

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With many ethanol plants slowed or shut down this spring, the American Coalition for Ethanol's senior vice president watched on, while recovering at home, as our industry pitched in to help the nation stay healthy. Deeds, not words, set us apart.

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UNICA, the Brazilian sugarcane industry association, has announced that ethanol sales by mills in the south-central region of the country were down during the first half of June. Corn ethanol production, however, continued to grow.

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European ethanol producer CropEnergies released first quarter financial results on July 8, reporting reduced revenues, EBITDA and net income. The company, however, said impacts from COVID-19 were less severe than initially expected.

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U.S. ethanol production was up nearly 2 percent the week ending July 3, while weekly ending stocks of fuel ethanol increased by more than 2 percent, according to data released by the U.S. Energy Information Administration on July 8.

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RenovaBio marks important milestones, setbacks

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By Gabriel Miranda, EcoEngineers

July 07, 2020

Ethanol markets in the U.S. and Brazil have been hit hard by the COVID pandemic, and demand has plummeted. The Brazilian government has proposed a reduced RenovaBio target for 2020 that trims the goal 50 percent, according to EcoEngineers.

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The U.S. Energy Information Administration increased its forecasts for 2020 and 2021 ethanol production in its latest Short-Term Energy Outlook, which was released July 7. Forecasts for ethanol consumption were also revised up.

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The U.S. exported 67.53 million gallons of ethanol and 601,029 tons of distillers grains in May, according to data released by the USDA Foreign Agricultural Service on July 2. Exports of both products were down significantly.

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ACE CEO Brian Jennings has expressed his disappointment in the EPA for taking no action to follow through on ACE's request to issue an interim final rule by July 1 to increase the RVO for 2020 to ensure 20.09 billion gallons of biofuel is blended.

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Harvestone Group has added four plants owned by Glacial Lakes Energy to its marketing, logistics and trading platform. The four plants represent 360 MMgy of production capacity. Harvestone's platform now handles more than 850 MMgy of production.

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U.S-Mexico-Canada Agreement officially entered into force on July 1. The agreement represents a culmination of years of work to update and improve NAFTA, offering improved agricultural market accesses and fairer trade between the countries.

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The House Select Committee on the Climate Crisis on June 30 unveiled a climate crisis action plan that aims to serve as a congressional roadmap to help the U.S. reach net-zero emissions by 2050. The plan shows ethanol can help meet that goal.

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Iowa Gov. Kim Reynolds on June 30 signed a bill that will extend Iowa's biofuel tax differentials for six years and announced her intention to use $7 million of Iowa's federal CARES Act funding to expand the Iowa's biofuel infrastructure program.

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Production and use of renewable ethanol from ePURE members delivered an average of more than 72 percent greenhouse gas (GHG) savings compared to fossil fuels in 2019, according new certified data released in June.

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UNICA, the Brazilian sugarcane industry association, has announced ethanol production was down significantly during the final half of May, while ethanol sales were down nearly 30 percent when compared to the same period of 2019.

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Due to heavy container traffic between the United States and Asia, 2020 has been a rollercoaster for containerized shipping following the outbreak of COVID-19 in January. Containerized grain shipment, however, have started to recover.

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To help meet continuing high demand for hand sanitizer, ADM on June 23 announced it is significantly increasing production of industrial alcohol at its Clinton, Iowa, corn processing complex. The new capacity will be available on an on-demand basis.

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Japan has opened a public comment period on a proposal that aims to increase the GHG emission value for gasoline and expand the list of conditions under which an unfulfilled ethanol target can be carried into the following fiscal year.

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Excess production capacity and reduced demand will force the U.S. ethanol industry to transform its business model to create more value and improve its operational efficiency, according to a new report from CoBank's Knowledge Exchange.

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Several biofuel producers and trade groups are among the nearly 200 organizations that sent a letter to President Trump on June 16 calling on him to ensure the continued implementation of the U.S.-China Phase One Trade Agreement.

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As the COVID-19 pandemic continues, the U.S. Grains Council is working diligently to engage international stakeholders to convey the continued availability of U.S. ethanol. As travel restrictions ease, strategic in-country engagement will resume.

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A roundup of the articles in the June issue of Ethanol Producer Magazine, including stories on hand sanitizer; the future of E30; carbon capture and storage; the CO2 market, ethanol's digital transformation and an alternative to CIP caustics.

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Five railcars of U.S. gasoline pre-blended at an E10 rate arrived in Guadalajara in May 2020, a direct success of the USGC's collaboration with the Mexican Association of Service Station Providers to demonstrate the benefits of increased ethanol use.

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