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UNICA asks government to help prevent ethanol industry collapse

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By Erin Krueger

April 16, 2020

Policy Business Operations Markets 

UNICA, the Brazilian sugarcane industry association, is asking the Brazilian government to take action to help prevent the nation's sugar and ethanol industry from collapsing due to impacts of the COVID-19 pandemic.

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U.S. fuel ethanol production fell 15 percent the week ending April 10 to an average of 570,000 barrels per day, the lowest level since the U.S. Energy Administration began reporting weekly ethanol production data in mid-2010.

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U.S. ethanol exports are up by 3 percent so far this year according to the USDA, but COVID-19 will impact demand for the rest of 2020. The USGC is working to keep end-users around the world informed on the status of the U.S. ethanol industry.

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U.S. fuel ethanol production fell 20 percent the week ending April 3 to an average of 672,000 barrels per day, the lowest level since the U.S. Energy Information Administration began reporting weekly ethanol production data in mid-2010.

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Growth Energy issued a statement on April 7 discussing the continued economic hardship facing U.S. biofuel producers and farmers as ethanol plants are forced to idle due to market conditions caused by the COVID-19 pandemic.

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U.S. ethanol is helping meet fuel supply needs in Australia—the result of a domestic supply gap and engagement by the U.S. Grains Council and its ethanol industry partners, Growth Energy and the Renewable Fuels Association.

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Several European biofuel trade groups on March 24 sent a letter to the European Commission offiical leading the European Green Deal expressing concern EU member states may reduce blending obligations during the ongoing COVID-19 pandemic.

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The U.S. exported 194.16 million gallons of ethanol and 852,904 tons of distillers grains in February, according to data released by the USDA Foreign Agricultural Service on April 2. Exports of both products were up when compared to February 2019.

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Two federal agencies relaxed regulations in March to allow producers of fuel ethanol help produce hand sanitizer to combat the ongoing COVID-19 outbreak. Several ethanol producers are already taking action help produce the much-needed product.

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The USDA on April 1 published a notice seeking comments on the most important agricultural innovation opportunities to be addressed in the near and long term. The comments will inform efforts related to the agency's Agricultural Innovaton Agenda.

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U.S. gas station operators are bracing for the impact of COVID-19 on fuel sales, as same-store gasoline sales were down 2.4 percent nationwide for the week ending March 14, when compared to the same week last year, according to OPIS Demand Report.

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Economists at the University of Illinois on March 26 published an analysis illustrating how COVID-19 is reducing demand for transportation fuels, including ethanol. Meanwhile, several plants have announced they will idle or reduce production.

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From the 3 E's to the 3 C's

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By Geoff Cooper

March 26, 2020

FROM THE APRIL ISSUE: Touting ethanol as a source of clean octane, it's ability to reduce carbon, and allowing consumer choice in the marketplace.

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FROM THE APRIL ISSUE: Industry leaders at the Iowa Renewable Fuels Summit in January looked back at 2019, offered predictions for 2020, and held hope for the ethanol industry's future.

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The Case for 95 RON Now

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By Dave VanderGriend

March 25, 2020

FROM THE APRIL ISSUE: A case for moving beyond the RFS to a 95 RON minimum octane standard.

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The U.S. Grains Council on March 23 published a letter to its global customers that provides answers to questions related to the continued operations of U.S. grain production and export facilities during the COVID-19 pandemic.

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Business Briefs

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By Ethanol Producer Magazine

March 24, 2020

FROM THE APRIL ISSUE: Growth Energy names American Biofuels Visionary, RFA announces 2020 Industry Award, Grains Council plans trade strategy, E15 added to two Nebraska retail sites, and Valero promotes three.

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The USDA and Office of the U.S. Trade Representative on March 24 announced continued progress with the implementation of agriculture-related provisions of the U.S.-China Phase One Economic and Trade Agreement, including those related to DDGS.

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RFA: Casey's becomes 5,000th station to offer E85

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By Renewable Fuels Association

March 23, 2020

The number of fuel stations now offering Flex Fuel E85 has reached an important milestone. A Casey's store in Ankeny, Iowa, has become the 5,000th station nationwide to sell E85, according to the Renewable Fuels Association.

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The U.S. government on March 18 relaxed regulations to allow producers of fuel ethanol and beverage alcohol to shift production to ethanol-based hand sanitizers. Days later, several ethanol plants are taking action to help combat COVID-19.

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UNICA, the Brazilian sugarcane industry association, recently released ethanol production and sales data for February and has announced its members are donating alcohol for use in hand sanitizer to help contain the spread of COVID-19.

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The ethanol industry is struggling with demand destruction resulting from COVID-19, an oil price war, ongoing trade disputes, and SREs. “Folks, this is not going to be good, and our biggest concern by far is our people," said Al-Corn CEO Randy Doyal.

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Ethanol producers are being impacted by the pandemic, oil war, trade disputes and small refinery waivers. With prices reaching as low as 94 cents per gallon as of March 18, ethanol producers are bracing for difficult decisions and possible closures.

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In response to the developing situation with COVID-19, the USGC said it will postpone all international travel and carefully review all within country travel until the end of March. USGC's Washington, D.C., headquarters remains open.

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The Canadian Parliament approved the U.S-Mexico-Canada (USMCA) trade agreement on March 13. The trade pact, which replaces the North American Free Trade Agreement, has now been ratified by all three countries.

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The U.S. Energy Information Administration slightly increased its forecast for 2020 ethanol production in its latest Short-Term Energy Outlook, released March 11. The 2021 forecast, however, was unchanged.

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A new study releaesd March 11 finds despite challenges, Iowa biofuel production continues to have a significant impact on Iowa's economy, supporting over 48,000 jobs and more than $2.4 billion in household income.

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The U.S. exported 151.23 million gallons of ethanol and 976,688 metric tons of distillers grains in January, according to data released by the USDA Foreign Agricultural Service on March 6. Exports of both products were up from the previous month.

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The exhibition area at the India Auto Expo, India's largest auto show held every two years, covers an area equal to 15 football fields. The USGC and U.S. industry partners invited attendees of the event to learn more about the benefits of ethanol.

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The U.K. Department for Transport opened a public consultation on March 4 on a proposal to allow E10 to be sold within the country. The U.K. currently limits the ethanol content of gasoline to 5 percent.

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