In the News
Mar 25, 2020
Time has run out for the U.S. Environmental Protection Agency to challenge a federal court ruling that would limit the agency’s use of waivers exempting small oil refineries from the country’s biofuels regulations.
The EPA had until the end of March 24 to file a challenge, but by early March 25, no such filing had been entered, according to a Reuters review of the case docket though the U.S. government’s electronic public access service for court records.
A decision by the administration of President Donald Trump not to appeal the ruling would mark a big win for the U.S. corn lobby and a blow to the oil industry.
Oil refiners say the waivers have been crucial to keeping small refineries in business, but the agriculture industry believes they have been over used and have cut into demand for corn-based ethanol.
Under the U.S. Renewable Fuel Standard, refiners are required to blend billions of gallons of ethanol into their gasoline every year, a boon for corn farmers. But the EPA can give out waivers to small facilities that prove that compliance would put them in financial straits.
The waiver program was cast into question in January after the 10th Circuit Court of Appeals ruled that the Trump administration had been too free with the waivers and set a standard for the exemptions that would greatly reduce the numbers of waivers the EPA can give out in the future.
The EPA has been considering its response since.
EPA and White House officials did not comment on the issue on Wednesday.
Sources told Reuters earlier this month that the Trump administration was likely to adhere to the ruling and apply it nationally.
The agency, meanwhile, was discussing the possibility of other measures to ease the financial burden on refiners, including instituting a cap or other restrictions on the price of biofuel blending credits that they must acquire to show compliance with the RFS, the sources said.
Read the original story here.
Klobuchar, Smith Help Make Bipartisan Push Urging President Trump to Support Renewable Fuel Standard
Mar 20, 2020
United States Senator Amy Klobuchar
WASHINGTON - U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) joined a bipartisan effort with 14 of their Senate colleagues urging President Trump to support the Renewable Fuel Standard (RFS) as coronavirus pushes ethanol prices to record lows. Their request comes following news that the U.S. Environmental Protection Agency (EPA) may appeal a recent unanimous decision by the U.S. Court of Appeals concerning small refinery exemptions.
With the drop in oil prices related to coronavirus and the pandemic’s projected decrease in gasoline consumption, some experts are projecting a reduction in corn used for ethanol production of 120 to 170 million bushels.
The Tenth Circuit ruling found that the EPA had abused the use of small refinery hardship waivers under the RFS, eliminating demand for billions of gallons of demand for renewable fuels and hurting rural communities, farmers, clean energy producers, and agribusinesses.
“The RFS has been a critical economic driver for rural America and the agricultural industry in each of our states. Farm country has taken successive blows from low commodity prices, trade disruptions, inclement weather, and continued uncertainty over the RFS,” the Senators wrote. “Now, with the global economy bracing for the full consequences of the coronavirus, upholding this court decision is a small step that will have a resounding benefit for farmers and ethanol stakeholders who are on the ropes.”
For years, Klobuchar has been a leader in the fight to strengthen the RFS to support American jobs and decrease dependence on foreign oil. Klobuchar has led several letters urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses and rural communities. In December 2019, Klobuchar In November 2019, Klobuchar led a public comment letter to Environmental Protection Agency (EPA) Administrator Andrew Wheeler expressing concern over the proposed supplemental rule establishing the Renewable Fuel Standard’s (RFS) 2020 Renewable Volume Obligations and 2021 Biomass-Based Diesel Volumes. In October 2019, Klobuchar sent a letter to U.S. Department of Agriculture Secretary Sonny Perdue asking the agency to document the impact of small refinery waivers on farm income, commodity prices, and renewable fuel usage. Klobuchar has also led a bipartisan push for the EPA to allow for the year-round sale of E15, including letters to the Administration urging them to expand waivers for the sale of E15 in the summer months. Klobuchar is an original cosponsor of the bipartisan Consumer and Fuel Retailer Choice Act, which would amend the Clean Air Act to allow for the year-round sale of E15.
Smith has long fought for a strong RFS. In October 2019, Smith pressed U.S. Deputy Secretary of Agriculture Stephen Censky about the Administration’s policy on the amount of corn-based ethanol and other renewable fuels blended into the nation’s gasoline supply at a Senate Agriculture Committee hearing. Smith has also pressed EPA Administrator Andrew Wheeler to take action, pointing out that the granting of waivers had increased by 370 percent since 2016, with “small refinery” waivers going to large oil companies under the Trump Administration.
Read the letter here.
Mar 19, 2020
The U.S. ethanol industry is struggling with demand destruction resulting from COVID-19, an oil price war, ongoing trade disputes, and small refinery exemptions (SREs). “Folks, this is not going to be good, and our biggest concern by far is our people,” said Randy Doyal, CEO of Al-Corn Clean Fuel, during a media call hosted by the Renewable Fuels Association on March 19.
Geoff Cooper, president and CEO of the RFA, opened the call by stressing the ethanol indsutry is facing unprecedented economic hardship. “We were already experiencing demand destruction and challenging economics before the coronavirus began to roil energy markets,” he said.
Cooper explained that demand for motor fuel is plummeting and most analysts today are expecting about a 20-25 percent drop in consumption over the near-term. “We’ve seen ethanol prices fall to record lows,” Cooper said, adding that April ethanol futures closed at 95 cents per gallon on March 18. Ethanol producer margins have also fallen and are have been in deep negative territory for the past several days. “These are some of the worst margins that we’ve seen in the industry’s history,” Cooper said.
COVID-19, the oil price war between OPEC and Russia, trade disputes with China and other markets and SREs are factors that have conspired to create not just the perfect storm for ethanol, but the perfect tsunami, Cooper added. Over the past week many ethanol plants have significantly reduced output and some have idled, he said. “We expect to see substantial reductions in ethanol production in the weeks ahead as producers contend with lower demand, record low prices and negative margins,” Cooper added.
Scott Richman, chief economist at the RFA, said average spot margins are at roughly negative 25 cents per gallon at yesterday’s prices. “That’s very far in the red,” he said, noting that some plants are slowing production, others are idling and some have stopped buying corn.
“Our absolute first concern in this is our people,” said Jeanne McCaherty, CEO of Guardian Energy Management, a company that manages operations at three ethanol plants. She said her company is working hard to follow Center for Disease Control recommendations, including social distancing, enabling employees to work remotely where possible and ensuring proper cleaning and hygiene.
“The second concern is job security,” McCaherty said. “Our people are sacred to us…We are concerned about them,” she added, noting that ethanol plants and their workers are integral parts of local rural economies.
Demand destruction the industry is facing is devastating, she said. Ethanol plants are also worried about physical logistics problems. Ethanol plants and their customers have limited amounts of storage space, she said. Some plants may need to shut down simply because of physical restrictions related to storage.
Doyal noted the ethanol indsutry was negatively impacted during the financial collapse of 2008, but said the impact from that event was relatively short. “This one, I think, we will feel for much longer,” he said. “Folks, this is not going to be good, and our biggest concern by far is our people. This is going to directly impact our folks, and we’re doing everything we can to mitigate that,” he said, whether that impact comes from risk of exposure to the virus or trying to keep plants open and operating so that workers can stay employed.
Chad Friese, general manager of Chippewa Valley Ethanol Co., discussed the unique position his company is in as a producer of not just fuel ethanol, but also pharmaceutical grade ethanol that can be used to produce hand sanitizer and other cleaning products. Currently, the company is trying to shift its focus to producing as much alcohol as possible for the hand sanitizer market. While the vast majority of fuel ethanol plants aren’t designed to produce pharmaceutical-grade ethanol, Freise said Chippewa Valley Ethanol has had the capability to serve that market for nearly 20 years, since 2001. It’s a big shift at the plant level to make that change, he said. Fuel ethanol production, however, is the first step in the plant’s process to produce pharmaceutical-grade alcohol.
Friese said his company is concerned over logistical problems impacting their ability to produce the alcohol needed for hand sanitizers, specifically whether the plant will have access to the rail cars and trucks it needs to move products. “We need those logistical channels to stay open,” he said. Friese also expressed concern over how plant operations could be impacted if a member of his staff becomes infected with COVID-19. “These are highly specialized jobs,” he said.
Cooper described several actions needed to keep ethanol plants operational. To help the ethanol indsutry survive the current disastrous market conditions, Cooper said the RFA is calling on Congress and the Trump administration to take immediate action to prevent a potential collapse of the industry. The top priority, he said, is to retain the industry’s highly-skilled workforce and save jobs. “The ethanol industry’s most valuable asset is its workforce,” Cooper said. Every effort should be taken to retain these jobs, especially given the likelihood that many plants will be forced to temporarily idle production and suspend sales of ethanol and coproducts.”
Beyond that, Cooper said the RFA is asking the administration to immediately announce that it will not appeal the Tenth Circuit Court decision that struck down three SREs approved by the U.S. EPA and announce it will apply the court’s decision nationwide. “This would send positive market signals that RFS demand will not be undermined by further small refinery exemptions,” he said. “That’s a signal our industry desperately needs today.” In addition, Cooper said the EPA should also announce it will immediately add 500 million gallons to the 2020 Renewable Fuel Standard requirements as ordered by the D.C. Circuit Court in 2017, and should announce it will not approve any pending SREs that do not meet the criteria of the Tenth Circuit Court.
“We are also joining many other businesses and industry groups in calling for more general forms of relief for our industry,” Cooper added, noting that the RFA joined with 96 other groups on a letter to President Trump and Congressional leaders this week calling for action to ensure continued access to credit for member companies and small businesses. The letter also advocated for some tax relief measures.
Cooper said the RFA expects fairness and equity in how assistance is being provided to various energy industries. Trump has already directed the U.S. Department of Energy to purchase millions of barrels of crude oil for the strategic petroleum reserve, he said, and noted other relief measures are also in the works for U.S. oil producers. “We’re simply calling on the government to ensure that all fuel producers receive equitable support during this period of marketplace uncertainty and unrest,” he said.
“I am incredibly proud of the men and women of the ethanol indsutry for their tenacity, resolve and compassion during this very difficult time,” Cooper added. “Not only are we continuing to deliver cleaner fuels to the market during this national emergency, but our indsutry is also part of the solution for mitigating the spread of the virus and protecting American families.”
Read the original story here.
Mar 17, 2020
Chicken and eggs are a diet staple in Indonesia—the world’s fourth most populous country spread over more than 17,000 islands. Covering the largest island country is no small feat, but the U.S. Grains Council has expanded tried-and-true promotion programs for U.S. dried distillers grains with solubles (DDGS) and corn gluten meal (CGM) to capture more of the growing feed demand throughout Indonesia.
“Our job is to go find new demand, so that is what we did,” said Caleb Wurth, USGC assistant director for Southeast Asia. “In this case, we discovered significant pockets of layer production that had not considered DDGS before.”
The Council has a long history operating in West Java—servicing and developing the region since the 1990s. After years of engagement, this region is dominated by regional integrators—housing 876 million broilers and 32 million layers—who consistently use DDGS and CGM in their feed rations. This concentrated programming effort helped lead to Indonesia’s importation of nearly 974,000 metric tons of U.S. DDGS in the 2018/2019 marketing year—up substantially from nearly 517,000 tons in 2016/2017.
To expand on this success, the Council began to focus efforts outside of West Java, setting sights on the 47 million layers nestled around the locals of Blitar, Kediri, Surabaya, Maland and Jember in East Sumatra as well as the outlying islands of Sumatra and Sulawesi. In these remote markets, the practice of on-farm mixing is still quite prevalent. Within these self-mixing systems, owners formulate their own ration, supplementing concentrates from a local feed mill—often utilizing a simple mixture of local corn and rice bran. While the nutrition delivery mechanisms can be quite crude, the farm sizes in these locations can still range from 10,000 to 1 million birds.
Mimicking programs executed in other parts of Southeast Asia, Budi Tangendjaja, a long-time USGC consultant, conducted multiple feed formulation trainings across Indonesia. One such training brought together a USGC-member commercial team and a group of layer farm owners representing a local farmers’ association (PPN) in Padang, Indonesia, for a two-day feed formulation training seminar. The group learned how to maximize use of DDGS and CGM using least-cost feed formulation software. The Council made efforts to integrate the younger generation into the programming as well, recognizing the need to exhibit the benefits of DDGS usage to the emerging leaders of the community.
The feed formulation seminars demonstrated DDGS could reduce overall feed costs, and CGM could be beneficial for the early laying period of production. Immediate results of this seminar series included participants reporting increasing DDGS inclusion levels from 15 percent to 20 percent and others beginning first-time DDGS feeding trials at 4 percent and 5 percent inclusion, respectively.
The Council is continually evaluating new areas of market demand within new and existing customers to further promote the use of U.S. coarse grains and co-products like DDGS and CGM. Doing so is especially important as larger trade discussions continue between markets like Indonesia and the United States.
“Discernible headwinds face global trade in the first part of 2020,” Wurth said. “It is important we continue to look for demand outside of the box.”
Read the original story here.
Mar 12, 2020
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.
The EIA currently predicts ethanol production will average 1.04 million barrels per day this year, up from its forecast of 1.03 million barrels per year made in the February STEO. The forecast for 2021 ethanol production was maintained at 1.03 million barrels per day.
On a quarterly basis, the EIA predicts ethanol production will average 1.03 million barrels per day during the first quarter of this year, increase to 1.04 million barrels per day in the second quarter, fall to 1.02 million barrels per day in the third quarter, and return to 1.03 million barrels per day in the fourth quarter. For 2021, ethanol production is expected to average 1.02 million barrels per day in the first quarter, increasing to 1.03 million barrels per day in the second and third quarters, and increasing again to 1.04 million barrels per day in the final quarter of the year.
Ethanol consumption is currently expected to average 950,000 barrels per day this year, flat with 2019. In 2021, ethanol consumption is expected to fall to an average of 940,000 barrels per day.
The EIA’s most recent weekly data shows ethanol production averaged 1.044 million barrels per day the week ending March 6, down from 1.079 million barrels per day the previous week. Weekly ethanol ending stocks fell to 24.334 million barrels the week ending March 6, down from a record high of 24.964 million barrels the previous week.
The agency’s most recent monthly data shows the U.S. imported 269,000 barrels of ethanol in December, all from Brazil. During the same month, the U.S. exported 3.49 million barrels of ethanol, primarily to Canada, Brazil, and India.
Read the original story here.
Mar 10, 2020
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 and January 2019.
The 151.23 million gallons of ethanol exported in January was up from both the 127.91 million gallons exported in January 2019 and 146.53 million gallons exported in December 2019.
The U.S. exported ethanol to approximately three dozen countries in January. Brazil was the top destination with 58.19 million gallons, followed by Canada at 24.79 million gallons, and India at 13.31 million gallons.
The value of U.S. ethanol exports was $256.53 million in January, up from $190.04 million in January 2019, but down from $263.23 million in December 2019.
The 976,688 tons of distillers grains exported in January was up from both the 806,615 million tons exported during the same month of 2019 and the 767,682 million tons exported in December 2019.
The U.S. exported distillers grains to approximately 36 countries in January. Mexico was the top destination with 169,854 tons, followed by South Korea at 129,058 tons and Indonesia at 115,632 tons.
The value of U.S. distillers grains exports reached $199.48 million in January, up from $155.07 million in December 2019 and $172.38 million in January 2019.
Additional data is available on the USDA FAS website.
Read the original story here.
Mar 9, 2020
Some ethanol producers worldwide said demand is up for their products due to customers stockpiling hand sanitizer - which can be made using the biofuel - as the coronavirus outbreak worsens.
The coronavirus has infected more than 110,000 people in 105 countries and territories and 3,800 have died, according to a Reuters tally. Governments and health agencies have advised people to wash their hands and use hand sanitizer to curb the virus’s spread, prompting an increase in demand for ethanol, also known as ethyl alcohol, industrial alcohol and denatured alcohol, used to make many hand sanitizers.
Minneapolis-based Cargill, which produces and commercializes ethanol, said on Monday that demand for its denatured ethanol in Europe has doubled since last month.
Tereos, one of the largest producers of bioethanol alcohol in the European Union and headquartered in northern France, said it also saw a spike in demand and had a special order for 20,000 hectoliters (528,000 gallons) of additional denatured alcohol in the past days.
The company is unblocking some of its stocks and making these requests a priority, a company spokesperson said in an email.
Meanwhile, Sacramento-based producer Pacific Ethanol confirmed that industrial alcohol sales are rising, said Paul Koehler, vice president of commodities and corporate development.
Read the original story here.
Brownfield Ag News for America
Mar 3, 2020
Ag Secretary Sonny Perdue spoke with reporters Monday at the National Farmers Union meeting in Savannah, Georgia.
At last week’s Commodity Classic, Ag Secretary Sonny Perdue said he believes small refinery exemptions (SREs) will be reduced in response to a recent Tenth Circuit Court ruling that EPA overstepped its SRE granting authority.
But what if EPA decides to appeal the court’s decision? Speaking with reporters at the National Farmers Union annual meeting in Savannah, Georgia, Perdue said that appears doubtful.
“Our legal counsel indicates that he does not think it would be wise to appeal that decision. He thinks it’s pretty solid,” Perdue said.
If EPA doesn’t appeal, the next question is whether the agency will apply the ruling nationwide or confine it to the area covered by the Tenth Circuit, which includes the six states of Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah.
Perdue thinks it should be applied nationwide.
“We think it’s probably applicable nationwide when look at the principle of small refinery waivers—that the decision should go nationwide.”
Perdue made those comments Monday during a news conference at the NFU annual meeting.
Read the original story here.
More...
(Washington, D.C., February 28, 2020) – U.S. Secretary of Agriculture Sonny Perdue issued a memo today directing the U.S. Department of Agriculture (USDA) to acquire alternative fueled vehicles (AFV) when replacing conventionally fueled vehicles. USDA owns and operates one of the largest civilian fleets in the Federal Government and this move to a fleet that can use E85 or biodiesel will increase efficiencies and performance. Additionally, as part of the President Donald J. Trump’s October agreement to seek opportunities to facilitate the availability of higher biofuel blends across the country, USDA will make $100 million in grants available this year for the newly created Higher Blends Infrastructure Incentive Program (HBIIP). Through this program, transportation fueling and biodiesel distribution facilities will be able to apply for grants to help install, retrofit, and/or upgrade fuel storage, dispenser pumps, related equipment and infrastructure to be able to sell ethanol and biodiesel. The Department plans to publish application deadlines and other program information in the Federal Register this spring.
“Both of these actions underscore USDA is putting our money where our mouth is when it comes to increased biofuels usage. Expanding nationwide infrastructure that offers biofuels and increasing the number of biofuel capable vehicles in our fleet will increase the use of environmentally friendly fuel with decreased emissions, driving demand for our farmers and improving the air we breathe,” Secretary Perdue said. “President Trump is fighting for our corn and soybean growers and biofuel producers by finalizing year-round E15, ensuring that more than 15 billion gallons of ethanol and 2.43 billion gallons of biodiesel enters the market in 2020, and opening up new markets abroad. USDA will continue to do its part to encourage the use of homegrown energy.”
Background on Higher Blends Infrastructure Incentive Program (HBIIP):
HBIIP will consist of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels. Funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment, and infrastructure. Cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as “E15” and “B20” (or higher), at vehicle fueling locations, including, but not limited to, local fueling stations, convenience stores (CS), hypermarket fueling stations (HFS), and/or fleet facilities, as well as fuel terminals for biodiesel. Prospective participants and stakeholders should expect additional specific program information and requirements to be published by mid-spring which will clarify the application process, eligibility, and how applications for grant funding will be scored.
Background on USDA Fleet:
USDA owns and operates one of the largest civilian fleets in the Federal Government. USDA is moving to acquire E85- or biodiesel-capable vehicles that meet USDA mission requirements instead of those that take conventional gasoline. This will occur over time during the normal fleet renewal process. USDA currently has 37,000 vehicles and replaces approximately 3,000 every year. Secretary Perdue directed USDA to:
- Acquire E85 or biodiesel-capable vehicles that meet USDA mission requirements;
- Use station locator websites and applications to fuel with E15, E85, and biodiesel where available;
- Prioritize the purchase of E15 for gasoline vehicles without E85 capability and the purchase of renewable diesel blends for diesel vehicles without B20 capability; and
- For USDA locations that have in-house refueling pumps, coordinate with fuel vendors to acquire and provide biofuel blends, including E15, E85, B20 and higher biodiesel blends, and renewable diesel blends.
These actions have the potential to increase USDA’s annual consumption of E15 by up to 9 million gallons, E85 by 10 million gallons, and biodiesel and renewable diesel blends by up to 3 million gallons. As availability of E15, E85, and biodiesel expands through the nation, USDA has the opportunity to reach these goals and have a significant impact. Where biofuels are available, the USDA fleet is directed to use biofuels.
Read the original press release here.
Feb 27, 2020
The USDA is scheduled to publish a notice in the Federal Register on Feb. 28 announcing a notice of funding availability (NOFA) of up to $100 million in competitive grants under the Higher Blends Infrastructure Incentive Program.
A prepublication version of the notice indicates the grant funding will be made available to eligible entities to support activities designed to expand the sales and use of renewable fuels under the HBIIP. The notice aims to alert prospective participants and stakeholders of the intention of the Commodity Credit Corp. and Rural Business Cooperative Service to jointly publish a NOFA by mid-spring. That NOFA will provide specific program information and requirements.
The notice explains that HBIIP is intended to encourage a more comprehensive approach to marketing higher blend levels of ethanol and biodiesel by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment and infrastructure.
According to the USDA, cost-share grants and/or incentives will be made available for higher fuel ethanol/biodiesel blends such as E15 and B20 at vehicle fueling locations. This includes local fueling stations, convenience stores, hypermarket fueling stations, and/or fleet facilities.
A full copy of the notice is available on the USDA website.
February 26, 2020 - Today, U.S. Reps. Angie Craig (MN-02) and Dave Loebsack (IA-02) delivered a letter signed by 11 members on the bipartisan Congressional Biofuels Caucus urging the Select Committee on Climate Crisis to include biofuels as a cost-effective and readily available solution for further decarbonization.
“The Select Committee must consider the declining carbon intensity of biofuels, as well as future decreases that can bring biofuels near net-zero emissions by 2050,” wrote the Members. “Ethanol’s carbon intensity is declining due to improved efficient farming practices and increased crop productivity that uses existing crop land efficiently and is not producing land cover change.”
“With greater biofuel use, transportation costs and Greenhouse Gas emissions can both be reduced without causing economic harm to families,” the Members continued. “We urge the Select Committee to support expanded use of low-carbon biofuels as a cost-effective solution for further decarbonization that can be implemented now.”
Rep. Craig was joined by House Agriculture Committee Chairman Collin Peterson, and U.S. Reps. Dave Loebsack, Cheri Bustos, Jeff Fortenberry, Don Bacon, Abby Finkenauer, Cindy Axne, Emanuel Cleaver, II, Ruben Gallego and Marcy Kaptur.
Rep. Craig remains committed to combating climate change. Rep. Craig is a cosponsor of the Energy Innovation and Carbon Dividend Act and has introduced the Resilience Revolving Loan Fund Act to give local communities the tools they need to combat climate change through local infrastructure. Additionally, she has remained committed to protecting the Renewable Fuel Standard and our domestic biofuels markets.
Full text of the letter can be found here.
February 14, 2020
NEW YORK (Reuters) - The U.S. Environmental Protection Agency is seeking White House guidance on the future of its controversial biofuel waiver program after a court ruling cast doubt over its legitimacy, and aims to announce a decision by early next month, a source familiar with the matter said on Friday.
In late January the U.S. Court of Appeals for the 10th Circuit said the EPA must reconsider some waivers it gave oil refineries exempting them from the nation's biofuel blending laws. The ruling here has prompted speculation that the EPA will need to reconsider dozens of other waivers it has granted under similar circumstances, and drastically reduce the numbers of waivers handed out in the future.
The exemption program has saved oil refineries hundreds of millions of dollars in regulatory costs. But it has infuriated the corn and biofuel industries, which say the Trump administration has overused the exemptions in a way that undermines demand for corn-based ethanol. The oil industry refutes that the exemptions hurt ethanol demand.
The EPA will announce a response to the court’s decision by March 9 after consultations with the White House, according to the source, who asked not to be named.
“EPA and (the Department of Justice) are reviewing the decision and carefully considering its potential impact on the program,” EPA spokeswoman Molly Block said in a statement.
EPA Administrator Andrew Wheeler had told reporters this month that the ruling “has the potential of completely, of changing the small refinery program.”
Under the U.S. Renewable Fuel Standard (RFS), the nation’s oil refineries are required to blend billions of gallons of biofuels such as ethanol into the nation’s fuel pool, or buy credits known as RINs from those that do.
But the EPA can waive refiners’ obligations if they prove compliance would cause them financial distress.
According to the court’s decision, the EPA overstepped its authority to grant waivers in the past for HollyFrontier’s Woods Cross and Cheyenne refineries and CVR Energy’s Wynnewood refinery because the refineries had not received exemptions in the previous year.
The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an “extension.”
“This decision would deprive EPA of a critical tool used to help small refineries disproportionately impacted by the RFS,” Chet Thompson, president of the American Fuel and Petrochemical Manufacturers trade group said. “We hope the EPA will appeal this ruling and at the very least limit its impact to the 10th Circuit.”
According to EPA data, the agency granted seven biofuel waivers in 2015. That number rose to 35 in 2017 – meaning 28 waivers were given without having been given in a previous year.
The EPA does not name the refineries that receive the waivers, arguing the information is confidential, but Reuters has reported that some have gone to small facilities owned by large companies like Exxon Mobil Corp and Chevron Corp.
Market participants are awaiting clarity on how the EPA will address the court’s ruling. U.S. renewable fuel prices have more than doubled since the Jan. 24 court decision. Credits for 2019 traded at 25.5 cents each on Friday, up from nine cents before the decision, traders said.
Read the original story here: EPA consulting White House over biofuel waiver program: source
February 13, 2020
The marine territory covered by the countries in Southeast Asia is about three times larger than the combined land area—a large reason fish is the most popular and affordable protein source in the region. The U.S. Grains Council is specifically targeting the aquaculture industry in Southeast Asia as one of the next big demand growth opportunities for U.S. dried distillers grains with solubles (DDGS).
According to an agricultural outlook from the Food and Agriculture Organization of the United Nations, aquaculture feed production is expected to grow 35 percent over the next decade. The majority of this growth is expected to come from Southeast Asia, where fish claim a 31 percent share in meat consumption, and exports of fish and fish products continue to increase.
“In Southeast Asia, access to water provides a natural environment for expansion in aquaculture production—and growing export markets are creating more demand for production,” said Caleb Wurth, USGC assistant director of Southeast Asia. “Fish provide an extremely efficient source of protein production. Furthermore, a concentrated feed allows for intensive farming, which reduces the stress on the region’s wild ecosystems.”
The primary limiting factor for DDGS use in aquaculture feed is a lack of data and familiarity with the feed ingredient. In the absence of experience, end-users have misconceptions about DDGS, including that use will yellow fillets, questions of whether or not they are halal (permitted for Muslim diets) and others, all of which USGC is working to dispel. As a result, current inclusion rates for DDGS are estimated between zero and 5 percent, on average. USGC’s Southeast Asian office’s technical training and on-the-ground engagement is breaking down these barriers.
“Until now, U.S. coarse grains and coproducts have been under-utilized and under-considered feed rations for shrimp, tilapia and pangasius [a large catfish species native to Southeast Asia]—the region’s top species by volume,” Wurth said. “A combination of funding from USDA’s Market Access Program and Agricultural Trade Promotion program has allowed us to specifically target this amassing market.”
To help in this effort, USGC has hired a part-time consultant to spearhead the aquaculture program. Ronnie Tan, a nutritionist by education, has more than 35 years of experience in the aquaculture supply chain and international marketing. In this role, he is developing and targeting technical education and trade servicing programs for aquaculture in Southeast Asia. The initial program is focusing on Vietnam, Thailand and Indonesia, with likely expansion into Malaysia, Myanmar and the Philippines in the future.
USGC kicked off its new aquaculture-focused venture with two seminars in January 2020 in Ho Chi Minh City, Vietnam, and Bangkok, Thailand, with nearly 100 customers participating.
The seminars focused on the inclusion of DDGS and high-protein DDGS in shrimp, fin fish and marine species. Local U.S.-trained Vietnamese and Thai aqua nutritionists conducted a technical segment during the seminars, in addition to a commercial segment led by Tan, Wurth and DDGS-producing USGC members.
“The council’s aquaculture program will help end-users engage with global aquaculture experts, increase their familiarity with DDGS in aquaculture diets, dispel myths associated with its use and instill confidence that DDGS is an ingredient with low mycotoxins, high energy and quality protein,” Wurth said. “All of these activities will allow end-users to make informed decisions and increase the use of U.S. DDGS in their aquaculture operations.”
Success in raising inclusion rates to 5 percent for shrimp and marine fish and 3 percent for freshwater fish could result in 275,000 metric tons in additional demand for U.S. DDGS in a region already responsible for one-third of U.S. DDGS exports. Higher inclusion rates could up that consumption to between 500,000 to 1.25 million tons in the future.
Read the original story here: Aquafeed: The New Frontier for DDGS Demand in SE Asia
February 5, 2020
The official numbers are in and they confirm that U.S. ethanol exports netted the second-highest volume on record in 2019. According to government data released today and analyzed by the Renewable Fuels Association (RFA), American shippers rallied at year’s end with ethanol sales surging 37% higher to 146.5 million gallons (mg) in December. While coming in 13% under the 2018 record, ethanol producers still garnered a robust 1.47 billion gallons in exports last year.
In December, nearly all (96%) U.S. ethanol sold outside our borders landed in ten countries, with most experiencing healthy growth. Exports to Canada expanded 18% to 31.7 mg—sufficient to regain its status as our top customer after yielding that title to Brazil in November. Shipments to Brazil grew 14% to 30.8 mg, the largest volume in eight months. India was the third-largest destination at 27.8 mg, scaling up from 3.3 mg in November. Substantial volumes were also exported to South Korea (15.7 mg) and the European Union (14.4 mg).
Shipments of U.S. undenatured fuel ethanol climbed in December, up 29% to 68.2 mg. Eighty percent of exports were destined for Brazil (30.8 mg, +14%), India (12.8 mg, +287%), and the Netherlands (10.9 mg, +137%). Another dozen countries secured the remaining volumes of undenatured exports, including the Philippines (5.1 mg) and the United Kingdom (3.5 mg).
Sales of U.S. denatured fuel ethanol pressed higher in December, lifting 47% to 76.4 mg—the highest monthly total since Oct. 2018, aided by record shipments to India, South Korea, and Mexico. Forty percent of exports crossed the border to Canada (30.6 mg, +21%), with sizeable shipments also landing in India (15.0 mg), South Korea (13.8 mg), Colombia (6.7 mg), Mexico (3.7 mg), and Peru (3.4 mg).
Exports of U.S. ethanol for non-fuel, non-beverage purposes declined 24% to 1.9 mg, the lowest volume in two years. Most product shipped to Canada (0.9 mg), South Korea (0.6 mg), and Colombia (0.3 mg).
Imports from Brazil moderated in December as the U.S. purchased 14.0 mg of cane ethanol, scaling back from the 25.5 mg purchased in November. Total U.S. ethanol imports in 2019 increased 162% to 203.6 mg, up from 77.6 mg the prior year. In fact, more foreign ethanol entered our borders in 2019 than the last three years combined, marking the first time to breach 100 mg since 2013.
U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—declined in December by 16% to 767,682 metric tons (mt). Mexico solidly retained its position as our top DDGS export market despite diminished sales (143,330 mt, -29%), capturing nearly one-fifth of the global market in December. Shippers exported 125,303 mt to South Korea, a 19% gain over November and the largest volume in nine months. Indonesia boosted imports by 31% to 95,405 mt, the largest imports in over a year. Significant volumes also landed in Vietnam (80,041 mt, -5%), Japan (80,041 mt, +102%), and Canada (43,991 mt, +6%). Total exports of U.S. DDGS realized in 2019 were 10.79 million mt, landing 9% under 2018.
Read the original story here: December U.S. Global Ethanol Sales where Invigorated while DDGS Exports Subsided
Lyons, KS - February 5, 2020 - Whitefox Technologies is pleased to announce that Kansas Ethanol LLC is to install Whitefox ICE™ membrane dehydration system at its 77 million gallons per year (mmgy) plant in Lyons, Kansas.
Mike Chisam, President, and CEO of Kansas Ethanol, said, "We are first and foremost pursuing avenues to reduce our operating costs and ways to lower our carbon intensity to capitalize on low-carbon fuel markets. We also want to improve our overall operations and debottleneck existing process units. After meeting with the team at Whitefox Technologies, we knew their system and team was the right one for us. We look forward to getting the system installed and running."
Stephan Blum, Whitefox Technologies Chief Technical Officer, said, "Kansas Ethanol is already an efficient and well-managed plant. The addition of Whitefox ICE™ will further improve their overall efficiency in operations by eliminating recycle streams and fluctuations in distillation and dehydration. Whitefox ICE™ will enable Kansas Ethanol to increase production by an average rate of 30,000 gallons per day.
"This increase, and the operational improvements will keep them highly competitive in low-carbon markets and have a positive impact on their bottom line.”
Whitefox Technologies CEO, Gillian Harrison, said, “It’s great to be working with the team at Kansas Ethanol to further improve their energy and operational efficiency. It will be our first plant in this important state and our ninth ICE solution. This takes us to over 100 mmgy of installed membrane capacity, which is an exciting milestone.”
Kansas is home to 12 ethanol plants and produces nearly 500 million gallons peryear of renewable, clean-burning ethanol fuel.
Learn more about Whitefox Technologies here
Jan 28, 2020
A U.S. court decision last week striking down three biofuel waivers that the Environmental Protection Agency gave oil refineries in 2017 has cast doubt on the legitimacy of dozens of other EPA exemptions granted under similar circumstances, according to industry experts and agency data.
That spells uncertainty for a handful of independent refiners that secured lucrative waivers from the Trump administration, and could fire up prices for the biofuel blending credits those facilities need to comply with the nation’s biofuel law.
“The potential ramifications are huge,” said James Stock, an economist and professor at Harvard University who has researched biofuel policy.
Under the U.S. Renewable Fuel Standard, oil refineries are required to blend billions of gallons of biofuels such as ethanol into their fuel or buy credits from those that do. The EPA can waive those obligations if they prove compliance would cause them financial distress.
The biofuel industry has been incensed by a near quadrupling of waivers granted by the Trump administration, saying it is undermining demand for corn-based ethanol. The oil industry argues the waivers are needed to protect refining jobs, and says the waivers do not affect actual ethanol usage.
The U.S. Court of Appeals for the 10th Circuit on Jan. 24 vacated here three biofuel waivers the EPA granted in 2017 to two small refineries owned by HollyFrontier and one by CVR Energy, which is controlled by Trump ally and billionaire investor Carl Icahn.
According to the court's decisihere the EPA overstepped its authority to grant the waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an "extension."
It also noted research showing oil refineries are able to pass the costs of complying with the RFS to consumers by raising fuel prices, suggesting the waivers were not needed to help the oil refineries financially.
Officials at Holly Frontier and CVR were not immediately available to comment. EPA spokesman Michael Abboud said the agency is reviewing the decision.
A coalition of biofuel industry groups had challenged the three exemptions, bringing the suit. Those groups hope the court decision can eventually be applied to other waivers because the issues in question apply more broadly, said Geoff Cooper, president of the Renwable Fuels Association industry group.
According to EPA data here the agency granted seven biofuel waivers in 2015. That number rose to 35 in 2017 – meaning 28 waivers were given without having been given in a previous year. The EPA does not name the refineries that receive the waivers, arguing the information is confidential, but Reuters has reported here that some have gone to small facilities owned by large companies like Exxon Mobil and Chevron Corp.
Harvard’s Stock said the case threatens to hit small oil refineries hard if it means the waivers will be rescinded and they must comply with the RFS.
“All of a sudden there would be vast amounts of past obligations due, combined with the prospect of very limited (waivers) going forward,” he said.
Prices of blending compliance credits, known as Renewable Identification Numbers (RINs), are up about 20% since the court decision to one-month highs.
Ericka Perryman, a spokeswoman for the American Fuel and Petrochemical Manufacturers refining industry group, said AFPM was “carefully reviewing the opinion and potential implications.”
Read the original story here: Court Decision Casts Doubt On Dozens Of US Refinery Biofuel Waivers