In the News

Ethanol Producer Magazine

Jul 31, 2023

Sens. Amy Klobuchar, D-Minn., and Pete Ricketts, R-Neb., on July 27 introduced the Flex Fuel Fairness Act, a bill that aims to provide meaningful incentives for automakers to manufacture flex fuel vehicles (FFVs) in addition to battery electric vehicles. 

“The Biden EPA has made a mistake and ignored the proven benefits of flex fuel vehicles that can run higher ethanol blends,” Ricketts said. “Our bill levels the playing field for a proven Nebraska alternative to expensive and burdensome electric vehicles. Nebraskans know biofuels like ethanol are a proven solution that lowers prices for consumers at the pump, is great for our farmers and ranchers, and reduces our dependence on foreign oil.”

The U.S. EPA recently released proposed tailpipe greenhouse gas (GHG) emissions standards for model year (MY) 2027-2032 light-duty vehicles. Once finalized, the proposed standards will require automakers to meet certain tailpipe carbon dioxide emission values, on average, across their fleet of new vehicles. According to information released by Ricketts office, the EPA’s proposed approach for electric vehicles (EVs) assumes that EVs produced by automakers will use only zero-carbon renewable electricity. That approach has been criticized for ignoring the significant GHG emissions associated with critical mineral extraction, EV battery production, and the production and transmission of electricity used to recharge EV batteries. Some estimates indicate the EPA’s proposed standards would require EVs to account for two-thirds of light-duty vehicles within eight years. 

The proposed tailpipe emissions rule does not recognize or account for meaningful GHG emissions savings that can be achieved through expanding biofuels use in vehicles designed to accommodate higher blends, including FFVs. According to Ricketts office, for the purpose of determining GHG tailpipe emissions compliance performance values, FFVs capable of operating on E85 should be assumed to operate on E85 all of the time, in line with how EVs are assumed to operate on zero-carbon electricity all of the time. The Flex Fuel Fairness Act aims to ensure that automakers that manufacture FFVs should be allowed to use a compliance tailpipe carbon dioxide emissions value that reflects the lifecycle GHG savings from using E85. For purposes of determining fleet average carbon dioxide standards, the bill would ensure that manufacturers may use a gram-per-mile carbon dioxide value for FFVs that is 31 percent lower than the gram per mile carbon dioxide value for the same vehicle model that is not an FFV. 

The Renewable Fuels Association is applauding the bill, stressing it would help level the playing field for FFVs by properly recognizing the emissions benefits associated with the use of E85 flex fuels. 

“We thank Senators Klobuchar and Ricketts for introducing the Flex Fuel Fairness Act, which appropriately acknowledges the emissions benefits of FFVs and flex fuels and rewards automakers who continue producing these popular vehicles,” said Geoff Cooper, president and CEO of the RFA. “This legislation helps unlock the potential of renewable fuels and puts more tools in the toolbox for automakers who must comply with increasingly stringent vehicle emissions standards. By leveling the playing field for the production of all clean vehicle technologies, this bill allows low-carbon liquid fuels like ethanol to work alongside clean electricity, electric vehicles, and other technologies to reduce emissions from transportation.”

“If EPA regulations are going to credit EVs for their maximum theoretical carbon emissions benefit, then it stands to reason that the agency should also credit FFVs for their maximum possible carbon emissions benefit,” Cooper added. “This bill would ensure that EPA is being fair and equitable in the way it uses emissions values as policy incentives to stimulate the production of lower-carbon vehicles.”

Growth Energy has also spoken out to welcome the bill, noting it would maximize the benefits of low-carbon biofuels under federal tailpipe standards. “U.S. automakers need flexibility to pursue innovative strategies for decarbonizing light-duty vehicles,” said Emily Skor, CEO of Growth Energy. “This bill would level the playing field, so both electricity and low-carbon biofuels can drive progress toward a net-zero future. We applaud Senators Klobuchar and Ricketts for working to make sure that EPA regulations protect access to cleaner, more affordable transportation options.”  

“Higher blends of biofuels offer immediate climate benefits while also reducing emissions of particulate matter, carbon monoxide, and other smog-forming pollutants linked to cancer and other negative health outcomes,” added Skor. “This legislation would put more FFVs on the road and position them to play an even greater role in decarbonizing transportation for decades to come.” 

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Ethanol Producer Magazine

Jul 26, 2023

U.S. fuel ethanol production was up 2 percent the week ending July 21, according to data released by the U.S. Energy Information Administration on July 26. Stocks of fuel ethanol were up slightly while exports were unchanged from the previous week. 

Fuel ethanol production averaged 1.094 million barrels per day the week ending July 21, up 24,000 barrels per day when compared to the 1.07 million barrels per day of production reported for the previous week. When compared to the same week of last year, production for the week ending July 21 was up 73,000 barrels per day. 

Weekly ending stocks of fuel ethanol reached 23.228 million barrels the week ending July 21, up 62,000 barrels when compared to the 12.166 million barrels of stocks reported for the previous week. When compared to the same week of last year, stocks for the week ending July 21 were down 100,000 barrels. 

Fuel ethanol exports averaged 86,000 barrels per day the week ending July 21, a level that was maintained from the previous week. Data on weekly ethanol exports is not available for the corresponding week of 2022 as the EIA began reporting weekly data on fuel ethanol exports in June 2023. According to EIA data, no fuel ethanol imports were reported for the week ending July 21.

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Ethanol Producer Magazine

Jul 25, 2023

Archer Daniels Midland Co. released second quarter financial results on July 25, reporting strong results for both ethanol and biodiesel operations. Robust margins for both types of biofuel are expected to continue into the second half of the year.

“Biofuels demand continues to remain strong,” said Juan Luciano, chairman and CEO of ADM, during a second quarter earnings call. “Through the first half of the year, we saw robust margins from biodiesel, strong demand for ethanol and an increasing demand for vegetable oil from renewable green diesel. We expect these trends to continue in the second half.”

Luciano said the new soybean crushing facility under development in Spiritwood, North Dakota, is currently scheduled to begin operations during the fourth quarter of this year. The facility, owned by a joint venture between ADM and Marathon Petroleum, will add 1.5 million metric tons of annual soy crush capacity to ADM’s portfolio and produce low-carbon intensity (CI) for Marathon’s renewable diesel facility in Dickinson, North Dakota. “Projects like this will support growing demand for renewable diesel and sustainable aviation fuel throughout the industry,” he added. 

ADM’s Carbohydrates Solutions business segment reported $303 million in operating profit for the second quarter, down from $473 million during the same period of last year. The segment includes the Starches and Sweeteners subsegment, which reported $285 million in operating profit, down from $393 million; and the Vantage Corn Processors subsegment, which reported $18 million in operating profit, down from $80 million. 

ADM noted the Carbohydrates Solutions segment delivered strong results, but said results were lower than the record second quarter of last year. The Starches and Sweeteners subsegment includes ethanol production from wet mills. The company said ethanol margins were solid as industry stocks moderated, but were lower than the prior year. Results for the quarter were negatively impacted due to unplanned downtime at one of the company’s corn germ plants. Vantage Corn Processors results were lower due to lower year-over-year ethanol margins. ADM also noted that the second quarter of last year included a one-time $50 million benefit from the USDA Biofuel Producer Recovery Program. 

Vikram Luthar, chief financial officer of ADM, said the company is continuing to make progress on its initiatives to decarbonize its Carbohydrates Solutions business, including through its definitive agreement with Tallgrass to capture carbon dioxide from its corn-processing complex in Columbus, Nebraska, and transport it to Wyoming for secure geologic storage. The company’s carbon reduction efforts will allow it to produce low-CI feedstock for use in a variety of applications, such as its joint ventures with LG Chem to produce lactic acid and polylactic acid (PLA). 

Overall, ADM reported segment operating profit of $1.53 billion for the second quarter, down from $1.84 billion during the same period of last year. Adjusted segment operating profit was at $1.83 billion, down from $1.85 billion.  Earnings per share reached $1.70, down from $2.18. Adjusted earnings per share reached $1.89, down from $2.15.

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US Grains Council

Jul 20, 2023

U.S. Grains Council (USGC) leaders, Chairman Josh Miller and President and CEO Ryan LeGrand, traveled to Seoul, South Korea, last week for the 2023 Role of EcoFriendly Fuels in Realizing 2050 Carbon Neutrality symposium. The event was a collaboration between the Council, FAS Seoul, the Korea Automobile Journalists Association (KAJA) and the Korea Biofuels Forum.

The purpose of the symposium was to inform various stakeholders including the Korean government, the petroleum industry and the media about the carbon emission reduction potential of bioethanol and its enhanced effectiveness under a national bioethanol renewable fuel standard (RFS). The symposium also aimed to introduce alcohol-to-jet technology for the production of sustainable aviation fuel (SAF) from bioethanol and provide insights into SAF industry trends.

“We applaud the Korean government for its 2022 announcement to create a Renewable Fuel Standard. This symposium further promotes and actualizes Korea’s goal to implement its Renewable Fuel Standard by 2025, joining many other countries around the world in acknowledging and incorporating bioethanol within their country’s fuel supply chain,” Miller said.

The symposium’s key events included individual presentations by subject matter experts on global bioethanol and SAF policies, life cycle analysis (LCA), vehicle compatibility and infrastructure, prospects of the global automotive industry. Additionally, there was a panel discussion between global bioethanol industry experts and domestic policy officials, emphasizing the necessity of introducing a national bioethanol RFS in South Korea.

“The enthusiasm and excitement surrounding bioethanol consumption within Korea was great to see. A multitude of stakeholders from media, government, automotive, retail, import and refinery level organizations were present and there was robust and substantial engagement throughout the event and in follow-on meetings,” said Mackenzie Boubin, USGC director of global ethanol export development.

Through this program, the Korean government and related industries recognized the carbon-reduction effect of U.S. corn-based bioethanol and its potential as a promising raw material for SAF. This will contribute to the government’s pilot distribution project for a successful automotive RFS introduction and will create an environment that promotes the use of bioethanol for the deployment of alcohol-to-jet technology.

“A significant 480-million-gallon opportunity, the Korean market has been elevated to a tier 1 priority market in 2023 to account for its RFS commitments and on-road bioethanol implementation efforts. USGC will remain engaged on pilot initiatives and best-practice pathways toward nationwide consumption to achieve Korean’s decarbonization objectives,” Boubin said.

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Ethanol Producer Magazine

Jul 18, 2023

The U.S. ethanol industry delivered strong second quarter results with steady production and above-average profitability, according to statements made by CoBank in its latest quarterly research report, released July 13. 

CoBank said that pretax operating margins for the three-month period averaged 45 cents per gallon through late June, well above the average profit margins of 32 cents per gallon year-to-date and 28 cents per gallon long-term. 

Production during the second quarter averaged 15.4 billion gallons annualized vs. 15.2 billion gallons sequentially, which modestly exceeded the five-year average levels, according to the report. 

CoBank also discusses expectations for this year’s corn crop within the report. Although the USDA currently forecasts a record large U.S. corn crop at 15.32 billion bushels on expanded acreage, CoBank cautioned that crop conditions across the Central U.S. are below historical averages. Mild temperatures in the Midwest thus far have prevented a faster decline in corn crop conditions, CoBank noted, but said July weather during corn pollination will be key to establishing yield potential. 

A full copy of the quarterly report is available on the CoBank website

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Ethanol Producer Magazine

Jul 17, 2023

Vietnam has lowered Most-Favored-Nation tariff rates on ethanol from 15 percent to 10 percent, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. 

The Government of Vietnam issued a decree on May 31 announcing the change. The new rate became effective on July 15, according to the report. 

MFN tariff rates will to all of Vietnam’s trading partners with whom the country has no preferential agreements in place. The report indicates that MNF tariff rates apply to the U.S. 

According to data published by the USDA FAS, the U.S. exported approximately 2.38 million gallons to Vietnam last year, compared to 6,325 gallons in 2021 and 2.72 million gallons in 2020. 

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Renewable Fuels Association

Jul 6, 2023

May U.S. ethanol exports eased 10% to 113.2 million gallons (mg), chiefly reflecting lower undenatured non-beverage, non-fuel ethanol shipments (including 12.6 mg lower exports to India). Canada was our largest destination for the 26th consecutive month and accounted for 45% of global ethanol sales. The 51.0 mg of ethanol shipped north of our border (a 9% increase over April and the second largest on record) included 73% of total U.S. denatured fuel exports for the month. Other substantial markets included the European Union (22.6 mg, +37%)—primarily shipped to the Netherlands, marking the country’s second-largest import volumes on record—the United Kingdom (9.7 mg, -7%), South Korea (9.6 mg, -10%), Peru (6.2 mg, +113%), and Colombia (6.0 mg, +116%). Brazil again remained essentially absent from the market with a 16% tariff on U.S. ethanol in place. Year-to-date U.S. ethanol exports total 593.0 mg, lagging 18% behind last year at this time.

For the fifth consecutive month, the U.S. did not register any meaningful imports of foreign ethanol.

U.S. exports of dried distillers grains (DDGS), the animal feed co-product generated by dry-mill ethanol plants, sprang to a 9-month high of 958,385 metric tons (mt) in May. This was 23% more than April but 1% behind year-ago volumes. The bulk of DDGS shipments landed in just six countries, yet several smaller markets logged near-record volumes (e.g., Tunisia imported 20,008 mt and Guatemala bought 18,016 mt). Mexico captured the largest market share (17%) for the 11th consecutive month (up 4% to 163,731 mt), and Turkey’s imports were up sevenfold to a 22-month high of 146,559 mt. South Korea (103,925 mt, -7%), Indonesia (89,005 mt, +21%), Vietnam (83,905 mt, +29%), and Canada (59,523, +65%) rounded out our largest global customers for the month. Year-to-date DDGS exports, totaling 4.17 million mt, lag 11% behind last year at this time.

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National Corn Growers Association

Jun 29, 2023

Congress can ensure more consumer choice in fuels and vehicles by taking greater advantage of low-cost, low-emissions biofuels like ethanol, a leader of the National Corn Growers Association told members of Congress on June 22. 

“As producers of the sustainable, primary feedstock for low carbon ethanol, corn farmers stand behind agriculture’s contribution to low-cost, cleaner, domestic energy,” NCGA CEO Neil Caskey  said during testimony  before the Subcommittee on Environment, Manufacturing, and Critical Materials of the House Energy and Commerce Committee. “Their production improvements will help achieve biofuels with net-zero emissions and higher ethanol blends cost less.”

In his testimony, Caskey discussed several bills that that would leverage the benefits of biofuels to ensure a level playing field in transportation, including:

  • The Fuels Parity Act, which ensures EPA uses the most accurate lifecycle emissions assessment for biofuels: the Department of Energy Argonne National Lab’s GREET model. The legislation recognizes progress made under the Renewable Fuel Standard, allowing all fuels, including corn ethanol, that meet the 50 percent lower GHG standard for an advanced biofuel to qualify as an advanced biofuel.
  • The Consumer and Fuel Retailer Choice Act, which would permanently remove outdated and unnecessary barriers to full market access to 15 percent ethanol-blended fuel, a lower-cost and lower emissions choice.
  • Next Generation Fuels Act, which considers fuels and vehicles as a system, would improve our nation’s liquid fuel supply and transition new combustion vehicles to use advanced engines that take advantage of better fuels, such as higher blends of ethanol. This transition to updated fuels and vehicles would cut fuel costs, reduce GHG and other transportation emissions and increase fuel efficiency.

Caskey said NCGA supports policies to further reduce emissions from vehicles but is opposed to EPA’s proposed approach for emission standards.

“EPA’s proposed rule envisions only one solution to meet new standards, electric vehicles, without accounting for their full lifecycle emissions,” he said. “Rather than endorse a single technology, we are urging EPA to focus on outcomes and open pathways for all low-carbon fuels and technologies, as well as advance a needed rulemaking to improve fuels.”

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