In the News
Dec 21, 2021
Happy days are here again at ethanol plants, with profits nearing the all-time high set in 2014.
The black ink has all but erased the industry’s bad old days of 2020 brought on by the pandemic-induced cutback in liquid fuel use.
Scott Irwin, Laurence J. Norton chair of agricultural marketing at the University of Illinois Urbana-Champaign, says the rapid rise in ethanol plant profits has brought smiles to ethanol plant operators and owners across the United States.
“Happy days are here again is an accurate statement right now,” Irwin says. While he doubts 2021’s profit margins will top the record returns from seven years ago, he expects them to be close because of the incredible ethanol price spike that occurred in the last four months of the year. On March 28, 2014, a representative Iowa ethanol plant modeled by Irwin chalked up a record profit margin of $1.53 per gallon. In mid-November 2021, profits at the representative Iowa plant totaled $1.34 a gallon.
“We are in rarefied territory for ethanol prices and profits, and it’s happened over a pretty short period of time,” Irwin notes. “What’s really interesting is that on August 1, plants were basically operating at break-even margins. Since then, ethanol prices and profits have gone literally straight up.” At the beginning of 2021, Iowa plants were selling each gallon of ethanol for $1.39. By November, ethanol prices had more than doubled to $3.17 a gallon.
Connie Lindstrom, senior biofuels benchmarking analyst at Christianson, PLLP, in Willmar, Minnesota, says ethanol prices have been pushed higher because ethanol demand has outpaced supplies and corn prices have stabilized since harvest began. Ethanol plants also have seen strong demand for the coproducts they produce, particularly for corn oil that is processed into renewable diesel, she adds.
Christianson, which analyzes the finances of 60 ethanol plants that account for 35% of U.S. ethanol production, also has noted that prices paid for corn have stabilized because of favorable yields from the 2021 harvest, according to Lindstrom. “We had a good corn harvest this year,” she says, “which kept corn prices stable.” The twin trends of higher ethanol demand and abundant feedstock supply should continue, she adds, “which means we should get some pretty good profitability going forward.”
Scott Richman, chief economist at the Renewable Fuels Association in St. Louis, Missouri, says the financial fortunes of ethanol plants started to turn around in August. That’s when stocks of old-crop corn were running low, corn prices were relatively high, and margins for ethanol producers were quite thin, he says. Those negative factors led to a drop in ethanol production through mid-September.
PROFITS RISE
When the 2021 corn crop started arriving in September, Richman states, gasoline demand surged and ethanol plants’ profit margins rose considerably. “Since then, ethanol production has really geared up,” he says, “and we’ve been producing more than a million barrels of ethanol a day for six straight weeks, approaching all-time production records a couple of times. And because ethanol demand has remained so strong, we’ve been unable to rebuild stocks.”
Walt Wendland, president and chairman of the board of Ringneck Energy in Onida, South Dakota, says dry weather cut corn yields in the area, but the plant has been profitable because higher ethanol prices have outstripped the higher corn prices the plant is paying.
Ringneck Energy, which began production in April 2019, produces 80 million gallons of ethanol a year. After a challenging first year, Wendland says, Ringneck Energy was turning the corner financially in March 2020, when COVID-19 hit and demand for gasoline and ethanol both plummeted. “Our start-up year in 2019 was extremely challenging, but when we went into 2020, things were starting to look better until COVID hit,” Wendland recalls. “Eventually, we’ve come out of it OK, and things are looking pretty promising.”
During the depths of the economic implosion caused by the pandemic, Ringneck Energy cut production by 50% or more when there was little demand. “During the third and fourth quarters of 2020,” Wendland says, “we returned to full production.”
CORN USE JUMPS
Corn remains the preferred feedstock for ethanol plants. In November, the USDA estimated corn used for ethanol production in the 2021-2022 marketing year to total 5.25 billion bushels, up 50 million from its previous estimate.
Because dry weather cut average corn yields in central South Dakota, where Ringneck Energy is located, the plant has been bringing in 20 to 25 railcars of corn every week to supplement the local corn it purchases for processing. The plant processes 80,000 bushels of corn a day. Local corn yields averaged about 100 to 120 bushels per acre (bpa) in 2021, Wendland notes. Normal yields are closer to 150 bpa and 190 to 220 bpa in a good year.
“We had an extended shutdown in August thinking that we’d have an early harvest in mid-September,” Wendland says, “but we had some rains that delayed the start of harvest until the first of October.” The late harvest meant that Ringneck Energy had to start using a 50-50 corn-to-milo mix for processing, although corn is the preferred feedstock for the plant’s ethanol. Milo accounts for less than 5% of the plant’s production, according to Wendland, who credits the plant’s marketing team for keeping it supplied with feedstocks, despite the dry weather.
Ethanol stocks haven’t increased because ethanol demand has risen even faster, Wendland says, and higher ethanol prices have outpaced corn prices. Ringneck Energy ships 60% of its ethanol on the BNSF Railway to the West Coast, and 40% of its ethanol goes to markets in the South and western United States, he adds.
The company sells wet distillers’ grains to local cattle-feeding and cow-calf operations in the area, which means it saves on natural gas expenses by not having to dry the distillers’ grains.
“Corn oil prices have been unbelievable,” Wendland notes, because of renewable diesel demand. “That’s been a real growth market for our corn oil and an industry-wide focus for increasing profits.” Ringneck Energy has capitalized on those high prices by increasing its corn oil yields by 50%, he says.
2022 OUTLOOK
Steve Roe, general manager and CEO at Little Sioux Corn Processors, LLC, in Marcus, Iowa, says the plant had one of its best quarters ever in the third quarter of 2021 and the fourth quarter looks to be even better.
As for 2022, “I don’t see how we are going to have as good a year as we’ve had in 2021,” he notes. “I just don’t think these large returns are sustainable.”
Exports are the wild card for 2022. “Export prospects look promising because oil prices are high worldwide, so that will push ethanol exports up as people substitute ethanol for gasoline,” Roe says. Domestic demand for ethanol will be 14.5 billion gallons in 2021 based on the amount of gasoline consumed. With U.S. ethanol production expected to exceed 15 billion gallons this year, exports are going to have to make up the difference, he adds.
Domestic demand is expected to remain high.
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Dec 14, 2021
A new material developed by the University of Central Florida may one day mean people could be pouring a drink for their car. That’s because UCF researchers are developing an alcohol-based power source for cars and other technology.
The power source —an ethanol fuel cell — is a renewable energy alternative to fossil fuels and uses less fuel and produces less emissions compared to a combustion engine.
This is because ethanol is used as a fuel to generate electricity rather than heat generated by combustion as in an engine. As a bonus, the approach requires no recharging time like is needed for battery-based electric vehicles, meaning consumers will have more options for alternatives to fossil fuels.
The fuel cell would be replenished similar to refilling a gas tank in a car, but instead of gasoline, ethanol would be used. Ethanol can be generated through fermentation of biomass such as corn and other plants.
The new technology is described in this month’s edition of the journal Nature Energy.
“Our research enables direct ethanol fuel cells to become a new player to compete with hydrogen-fuel cells and batteries in various sustainable energy fields,” says Yang Yang, an associate professor in UCF’s NanoScience Technology Center and study co-author.
The development of ethanol fuel cells has been hindered in the past by sluggish internal reactions that hamper their performance, he says.
UCF researchers are overcoming this problem by adding the element fluorine to the palladium-nitrogen-carbon catalysts that spur electrical production in the fuel cell.
“Our lab has continued to work on fluorine-doped materials for energy and sustainability,” Yang says. “We spent more than two years on this project, we never stop because we believe this invention will change the world.”
Yang says the fluorine works to increase the effectiveness of the ethanol fuel cell by enhancing catalytic activity and decreasing corrosion.
The researchers found their designed catalyst achieves a maximum power density of 0.57 watts per centimeter square and more than 5,900 hours of operation in direct energy ethanol fuel cells. This has several times more power and operation time than previously developed ethanol fuel cells.
Yang says the technology is ready for commercialization now, and the research team is working on reducing the raw materials used and to reduce the manufacturing cost of the developed catalysts.
Study co-authors at UCF were Jinfa Chang, a postdoctoral researcher with UCF’s NanoScience Technology Center; Guanzhi Wang and Wei Zhang, doctoral students with the NanoScience Technology Center and UCF’s Department of Materials Science and Engineering; and Nina Orlovskaya, an associate professor in UCF’s Department of Mechanical and Aerospace Engineering.
Yang holds joint appointments in UCF’s NanoScience Technology Center and the Department of Materials Science and Engineering, which is part of the university’s College of Engineering and Computer Science. He is a member of UCF’s Renewable Energy and Chemical Transformation (REACT) Cluster. He also holds a secondary joint-appointment in UCF’s Department of Chemistry. Before joining UCF in 2015, he was a postdoctoral fellow at Rice University and an Alexander von Humboldt Fellow at the University of Erlangen-Nuremberg in Germany. He received his doctorate in materials science from Tsinghua University in China.
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Dec 14, 2021
WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) introduced bipartisan legislation to prohibit the EPA from reducing the minimum applicable volume of biofuels into transportation fuel once the RVO levels are finalized for any given year. This would prevent the EPA from retroactively reducing 2020 or future finalized RVO levels.
TheDefend the Blend Actis cosponsored by Senators Tammy Duckworth (D-IL) and Joni Ernst (R-IA). Companion legislation was introduced in the House of Representatives by Representatives Ashley Hinson (R-IA), Rodney Davis (R-IL), Angie Craig (D-MN), and Ron Kind (D-WI).
“Our farmers and rural communities are counting on us to uphold the integrity of the Renewable Fuel Standard,”said Klobuchar.“This legislation will stop retroactive changes to Renewable Volume Obligations so the renewable fuels industry has the certainty and stability it needs to create jobs, drive investment, and cut carbon emissions from the existing vehicle fleet.”
“Time and time again, renewable fuels have shown to be key in cutting both greenhouse gas emissions and costs at the pump. Yet, past and present administrations have overlooked the value of the Renewable Fuel Standard (RFS), creating uncertainty for Iowa farmers and producers. With EPA’s most recent proposed action of lowering RVO numbers from 2020’s final rule, who’s to say that won’t happen again? It is critical that we establish new safeguards that uphold the RFS and ensure all administrations remain committed to following the law,”said Grassley.
“Upholding the Renewable Fuel Standard helps strengthen the Midwest and our entire nation by diversifying our fuel sources, bolstering our national security, cutting carbon emissions and driving economic opportunity in the heartland,”said Duckworth.“I’m proud to join Senator Klobuchar in introducing this important bipartisan bill that would create more stability for hardworking farmers who feed and fuel our country by halting these harmful retroactive changes to RVO levels.”
“Iowa’s farmers and producers work day in and day out to offer consumers cleaner, more affordable choices at the pump, yet their livelihoods continue to be impacted by bureaucrats in Washington who refuse to uphold the integrity of the Renewable Fuel Standard. This bipartisan bill will ensure the law is followed and in turn provide more certainty and predictability to our renewable fuel industry,”said Ernst.
“This bill comes at a critical time,”said Geoff Cooper, Renewable Fuels Association President and CEO.“Just last week, EPA proposed an unprecedented retroactive reduction to the 2020 renewable volume obligations (RVOs) that were finalized more than two years ago. The RFS was created to provide long-term market certainty for our nation’s ethanol producers and farmers. Going back in time to slash RFS volumes—long after they have been finalized—undermines the purpose and intent of program and destabilizes the marketplace. We thank Sens. Klobuchar, Grassley, Duckworth and Ernst for working together to ensure the integrity of the RFS is being maintained and EPA is being held accountable.”
“ACE thanks these bipartisan Senators for introducing the Defend the Blend Act to help ensure EPA and oil refiners follow the law when it comes to the Renewable Fuel Standard,”said Brian Jennings, American Coalition for Ethanol CEO.“In light of last week’s proposed retroactive cuts to the 2020 biofuel blending obligations, this bill makes clear that going back in time and revising targets that already self-adjusted not only goes against Congressional intent but is likely illegal. We need EPA to quit playing politics when it comes to administering the program and instead look to it as an important tool to immediately make progress toward decarbonization goals for the transportation sector.”
“We’re grateful to Senators Klobuchar, Grassley, Duckworth and Ernst for introducing the Defend the Blend Act in the Senate, legislation that would offer more certainty in the marketplace, especially after EPA’s recent proposal to retroactively lower 2020 RVOs,” said Emily Skor, CEO of Growth Energy.“The Renewable Fuel Standard was put into place to blend more low-carbon biofuels into our nation’s transportation fuel supply, and it includes a built-in mechanism that adjusts for changes in fuel demand. Retroactively reducing RVO levels is completely unwarranted and unnecessary, adds uncertainty to the marketplace, and exceeds EPA’s legal authority.”
Klobuchar has been a strong advocate for investing in renewable fuel infrastructure and upholding theClean Air Act’s Renewable Fuel Standard (RFS).
In June, Klobuchar introduced a package of bipartisan bills to expand the availability of low-carbon renewable fuels, incentivize the use of higher blends of biofuels, and reduce greenhouse gas emissions.
Co-led by Senator Joni Ernst (R-IA), theBiofuel Infrastructure and Agricultural Product Market Expansion Actwould expand the availability of low-carbon renewable fuels in the marketplace, resulting in cleaner air, lower fuel process, and rural economic vitality.
Also in June, Klobuchar led a letter with 15 colleagues to the EPA and National Economic Council (NEC) expressing concern about reports that the Biden administration was considering options to exempt oil refiners from their obligations under the RFS.
In July, Klobuchar joined with Senator Deb Fischer (R-NE) to introduce the bipartisan Consumer and Fuel Retailer Choice Act, which would amend theClean Air Actto allow for the year-round sale of E15.
In February, Klobuchar and Thune introduced the Adopt GREET Act to require the EPA to update its greenhouse gas modeling for ethanol and biodiesel. Klobuchar also led a letter with Grassley to the EPA highlighting the need to restore integrity to the RFS by reviewing small refinery waivers, swiftly issuing a proposed rule for the 2021 Renewable Volume Obligation, and advancing the proposed E15 streamlining proposal.
Read the original press release here.
Dec 13, 2021
The Biden administration has signaled its intent to publish a proposed rule setting Renewable Fuel Standard renewable volume obligations (RVOs) for 2023 and beyond next spring. A variety of other rulemakings impacting biofuel producers are also scheduled to be taken up by federal agencies in the near-term, including those related to RFS fuel pathways, the Biopreferred program, and permitting for certain corn ethanol plants.
Abstracts of the expected rulemakings are included in the White House Office of Management and Budget’s Fall 2021 Unified Agenda of Regulatory and Deregulatory Actions, published on Dec. 10.
The OMB’s unified fall agenda provides expected timelines for several rulemakings already in progress, including the EPA’s recently released proposed rules to set 2020, 2021 and 2022 RVOs and extend certain RFS compliance reporting deadlines, and the agency’s ongoing rulemaking to revise greenhouse gas (GHG) emissions standards for model year (MY) 2023 and later light-duty vehicles.
The EPA released a proposed rule to revise 2020 RFS RVOs and set new RVOs for 2021 and 2022 on Dec. 7. The proposed rule also updates and re-proposes a provision originally included in the long-stalled Renewables Enhancement and Growth Support rule to allow for the production, transfer and use of biointermediates to generate qualifying fuel under the RFS program, and includes a variety of other provisions updating the RFS program. A public comment period on the rule is open through Feb. 4. The OMB’s unified agenda indicates a final rule could be released as soon as February 2022.
The unified agenda also addresses the proposed rule released by EPA in mid-November that aims to further delay certain RFS compliance and attest engagement report deadlines and change the way the agency sets those deadlines moving forward, but does not provide an expected date for publication of a final rule.
The EPA’s final rule to revise GHG emissions standards for MY 2023 and later vehicles is currently expected to be released before the end of the year, according to the OMB. Representatives of the ethanol industry have urged the EPA to address GHG reductions made possible through the use of high-octane, low-carbon renewable fuels as part of the rulemaking.
According to the 2021 fall unified agenda, the EPA is currently expected to issue a notice of proposed rulemaking for the post-2022 RFS in May 2022. Statutory provisions of the Clean Air Act governing the RFS program provides target RVOs only through 2022. Starting in 2023, the EPA must set those volumes based on an analysis of factors specified in statute. The upcoming rulemaking will establish volume requirements beginning in 2023, according to the OMB. A final rule is currently expected to be issued in December 2022.
The unified agenda also indicates that the EPA plans to issue a proposed rule in January 2022 focused on RFS canola oil pathways for renewable diesel, jet fuel, naphtha and liquid propane gas (LPG). An abstract published by the OMB states that the proposed rule will provide an opportunity to comment on an analysis of lifecycle GHGs associated with biofuels produced from canola oil via a hydrotreating process. A final rule is currently expected to be published in July 2022.
The EPA is also set to reconsider prevention of significant deterioration (PSD), nonattainment new source review, and Title V treatment of corn milling facilities under the “major emitting facility” definition, according to the unified agenda. The OMB said the rulemaking would convene a proceeding to reconsider portions of a final rule issued in May 2007 that applies to nonattainment areas. A notice of proposed rulemaking is expected to be released in February. The OMB provided no estimate of when a final rule could be issued.
The USDA is also expected to issue a final rule on its Biobased Markets Program, also referred to as the BIopreferred program, in June 2022. The rulemaking will update the program to reflect provisions included in the 2018 Farm Bill.
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Dec 8, 2021
U.S. fuel ethanol production expanded by more than 5 percent the week ending Dec. 3, according to data released by the U.S. Energy Information Administration on Dec. 8. Fuel ethanol stocks were up approximately 1 percent.
U.S. ethanol production averaged 1.09 million barrels per day the week ending Dec. 3, up 55,000 barrels per day when compared to the 1.035 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 Dec. 3 was up 99,000 barrels per day.
Weekly ending stocks for fuel ethanol expanded to 20.464 million barrels the week ending Dec. 3, up 163,000 barrels per day when compared to the 20.301 million barrels of stocks reported for the previous week. When compared to the same week of last year, stocks for the week ending Dec. 3 were down 1.619 million barrels.
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To facilitate year-round sales of E15 nationwide and remove arcane barriers to innovation and consumer choice in the retail fuel marketplace, six national farm and biofuel organizations have asked the U.S. Environmental Protection Agency to enact regulations requiring lower-volatility conventional gasoline blendstock in the summertime. This would result in lower tailpipe and evaporative emissions during the summer ozone control season and improve air quality.
In a letter to EPA Administrator Michael Regan, the Renewable Fuels Association, American Farm Bureau Federation, Growth Energy, National Corn Growers Association, National Farmers Union, and National Sorghum Producers said reducing the volatility of gasoline by just 1 pound per square inch (psi) would yield significant environmental benefits.
Regarding air quality, the six organizations referenced and attached a new study using EPA modeling tools, showing that reducing the vapor pressure of conventional gasoline blendstock by 1 psi “…would be beneficial to air quality, as emissions of carbon monoxide (CO), oxides of nitrogen (NOx) and volatile organic compounds (VOCs) would be reduced.” The study further concluded that “if the elimination of the 1-psi waiver [for E10] leads to the replacement of E10 with E15, it will also decrease greenhouse gases and particulate emissions.”
The organizations also wrote that the move would “simplify engineering of emissions control systems and help facilitate compliance with Renewable Fuel Standard requirements, with no noticeable impact on fuel costs.” They attached a new economic study showing that lowering the volatility of gasoline blendstock would impact the cost of the fuel by just 1-2 pennies per gallon.
In addition, the regulatory strategy suggested in the letter would address the Nov. 3 request from seven Midwest governors for EPA’s help to secure state-level regulatory approaches to allow the E15 blend to be made available year-round. “The approach we suggest here would be similar to that contemplated by the Governors, but rather than a state-by-state solution, the proposed regulatory fix would be nationally applicable.”
WASHINGTON, D.C., Dec. 7, 2021 – U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today announced that USDA will make up to $800 million available to support biofuel producers and infrastructure. Today’s announcement includes $700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the pandemic. The Department will make the funds available through the new Biofuel Producer Program authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Additionally, in the coming months, the Department will make $100 million available to increase significantly the sales and use of higher blends of bioethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products. The Biden-Harris Administration is committed to further growth of the biofuels industry, and the House-passed Build Back Better Act commits additional funding that will provide better market access for farmers and more affordable and cleaner fuels for consumers.
“Under the leadership of President Biden and Vice President Harris, USDA is providing direct relief to the people of rural America who are still reeling from the economic impacts of the pandemic,” Vilsack said. “As we continue to rebuild the nation’s economy, USDA is targeting resources and investments to improve the strength and resiliency of America’s sustainable fuel markets. The relief we’re announcing today will pave the way to economic recovery for America’s biofuel producers, stimulate a critical market for U.S. farmers and ranchers and move the country closer to President Biden’s goal of net-zero carbon emissions by 2050.”
Background on the Biofuel Producer Program
Through the Biofuel Producer Program, USDA will make up to $700 million in direct payments available for biofuel producers who faced unexpected market losses due to the pandemic. USDA will announce the official application window for this program within the coming week.
By making payments to biofuels producers, the program will help agricultural producers maintain and create more viable markets for products that supply biofuel production, such as corn, soybeans, or biomass. Payments will be based on the producer’s market loss volume in 2020, which is calculated by the amount of fuel produced in 2020 in comparison to 2019.
Background on Grants for Biofuels Infrastructure
USDA intends to make up to $100 million available in new funds for grants for biofuels infrastructure, such as blender pumps which ensure biofuels have greater availability in the retail market. The funding will provide grants to refueling and distribution facilities for cost of installation, retrofitting or otherwise upgrading of infrastructure required at a location to ensure the environmentally safe availability of fuel containing bioethanol blends of E-15 and greater or fuel containing biodiesel blends B-20 and greater. USDA will announce the official application window for grants within the coming months.
Read the original press release here.
Agriculture Secretary Tom Vilsack said the administration appeared “very close” to releasing a long-promised $700 million in pandemic aid to biofuel producers. The aid was announced in March as part of a remodeling of coronavirus relief programs by the incoming administration.
“I think we are very close to getting that done,” Vilsack said during a teleconference on Friday. “Sometimes it is frustrating to negotiate with our friends at OMB but that is the process.”
Ethanol production plunged 12% during 2020, mirroring the plunge in gasoline consumption due to stay-at-home orders and the economic recession that accompanied the pandemic. Ethanol makers lost $3.8 billion in sales, estimated the trade group Renewable Fuels Association at the end of 2020, which called repeatedly for federal aid. As much as 40% of the U.S. corn crop is used in making the renewable fuel and co-products.
The ethanol industry and its allies in Congress have pressed the EPA to announce targets for biofuel use this year and for 2022. Ordinarily, the Renewable Fuel Standard for each year is finalized by Nov. 30 of the preceding year. The Trump administration left office without setting an ethanol mandate for 2020. Vilsack said he expected an announcement “in the very near future.”
Vilsack discussed aid to the biofuel industry while announcing $633 million in USDA loans and grants through five rural economic programs aimed a renewable energy and community facilities on Friday.
More than half of the money, $356 million, went to projects proposed through the Rural Energy for America Program (REAP), which helps farmers and small businesses install renewable energy systems or to improve their energy efficiency. Vilsack visited a family-owned grocery store in Shrewsbury, a small town in southeastern Pennsylvania, that will use a $103,413 REAP grant to install solar panels that are expected to reduce the store’s electricity bills by $30,852 a year.
“The announcements are both large and small,” said Vilsack. Dozens of small grants, such as $40,910 to Ohana Banana Farm in Hilo, Hawaii, were mixed with large loans; $150 million of the REAP disbursements went to six projects, who each got a $25 million loan.
Beside REAP, the USDA loaned $241.8 million to nine solar projects through its Electric Loans for Renewable Energy; issued $3.2 million in grants for eight projects through the Higher Blends Infrastructure Incentive Program, which shares the cost of installing pumps and storage tanks for biofuels; and grants of $195,000 to six projects through its Community Facilities Disaster Grant program.
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Nov 30, 2021
Operable biofuels production capacity in the U.S. expanded by 32 MMgy in September to 20.766 billion gallons per year, according to data released by the U.S. Energy Information Administration on Nov. 30. Feedstock consumption was down for the month.
The increase in operable biofuels capacity came from expanded biodiesel production capacity. Capacity levels for fuel ethanol and other biofuels, defined as renewable heat oil, renewable jet fuel, renewable naphtha, renewable gasoline and other biofuels and biointermediates, remained steady.
Fuel ethanol capacity was at 17.393 billion gallons per year in September, a figure that has held steady since April. Biodiesel capacity expanded to 2.462 billion gallons per year, up from 2.43 billion gallons reported the previous month. Capacity for other biofuels was at 911 MMgy, flat with the previous three months.
A total of 24.308 billion pounds of feedstock went to biofuels production in September, down from an estimated 24.948 billion pounds in August.
Biofuel producers consumed approximately 22.799 billion pounds of corn in September, down from 23.196 billion pounds the previous month. Grain sorghum consumption was also down, falling to 27 million pounds, compared to 30 million pounds consumed in August.
The EIA reported that 756 million pounds of soybean oil was used to produce biofuels in September, down from 815 million pounds in August. Corn oil and canola oil consumption also fell. Biofuel producers consumed 167 million pounds of corn oil and 106 million pounds of canola oil in September, down from 199 million pounds and 142 million pounds, respectively, in August.
The consumption of waste oils, fats and greases was also down in September. Biofuel producers consumed 18 million pounds of poultry fat during the month, flat with August. Tallow consumption fell to 90 million pounds, down from 120 million pounds. The consumption of white grease was at 54 million pounds, down slightly from 55 million pounds in August. Biofuel producers consumed only 219 million pounds of yellow grease in September, down from 305 million pounds the previous month. Waste oils, fats and greases classified as “other” fell to 5 million pounds, down from 8 million pounds.
Biofuel producers also consumed 63 million pounds of feedstock classified as other recycled feeds and wastes, up from 60 million pounds in August. The consumption of other biofuel feedstocks not elsewhere specified or identified (NESOI) in the EIA’s report was at 4 million tons in September. Data on NESOI feedstock was not reported for August to avoid disclosure of individual company data.
Full copies of the EIA’s monthly biofuels capacity and feedstock reports is available on the agency’s website.
Read the original story here.
Nov 23, 2021
On Monday, the Renewable Fuels Association, Growth Energy, the National Biodiesel Board, National Corn Growers Association, and National Farmers Union thanked Congress for efforts to “build new markets for farmers and biofuel producers and help lower the carbon intensity of agriculture.” In a joint letter to the chairs of the House and Senate agriculture committees, U.S. Sen. Debbie Stabenow (D-Mich.) and U.S. Rep. David Scott (D-Ga.), biofuel and farm leaders offered appreciation for key provisions of the Build Back Better (BBB) Act, which passed the House on Friday and was sent to the Senate.
“One of the most pressing challenges facing biofuel producers is ensuring that consumers have consistent access to higher-level ethanol and biodiesel blends, which are lower carbon and lower cost than petroleum fuels. The Biofuel Infrastructure and Agriculture Product Market Expansion provision in the BBB Act helps address this issue and contains much needed funding to ensure consumers have access to these fuels,” they wrote in reference to $1 billion allocated to upgrade refueling and distribution infrastructure meant for higher blends of ethanol.
Advocates also pointed to lifecycle analysis illustrating how improved farm practices continue to drive down the carbon intensity of farming, and therefore the overall carbon intensity of biofuels.
“The BBB Act provides further voluntary incentives like cover crops, nutrient management, buffers, and incentives for locally-led conservation efforts that will help reduce the carbon intensity of agriculture even further, helping biofuel producers provide an even lower carbon liquid fuel at a time when demand for low carbon fuels is rising. As biofuel producers capture the value of low carbon farming practices, farmers would also have the opportunity to benefit in the form of premium prices for their commodities.,” they noted.
The full letter is available here.
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Nov 17, 2021
U.S. fuel ethanol production expanded by 2 percent the week ending Nov. 12, according to data released by the U.S. Energy Information Administration on Nov. 17. Stocks of fuel ethanol were down 1 percent.
Ethanol production averaged 1.06 million barrels per day the week ending Nov. 12, up 21,000 barrels per day when compared to the 1.039 million barrels of production reported for the previous week. When compared to the same week of last year, production for the week was up 89,000 barrels per day.
Stocks of fuel ethanol fell to 20.081 million barrels the week ending Nov. 12, down 205,000 barrels when compared to the 20.286 million barrels of stocks reported for the previous week. When compared to the same week of last year, fuel ethanol stocks for the week ending Nov. 12 were down 122,000 barrels.
Read the original story here.
Nov 16, 2021
As the Biden administration continues to explore options for addressing high gas prices, the Renewable Fuels Association sent a letter to the White House late Monday explaining that strong Renewable Fuel Standard (RFS) volumes and expanded ethanol consumption would help keep pump prices in check.
RFA’s letter follows media reports that Biden administration officials may be considering lowering RFS volumes based on the mistaken belief that the program somehow is a factor contributing to current high gas prices.
“To be clear, lowering biofuel blending requirements under the Renewable Fuel Standard (RFS) would not reduce the cost of gasoline for American households,” wrote RFA President and CEO Geoff Cooper in a letter to National Economic Council Director Brian Deese. “In fact, cutting RFS volumes would most assuredly have the exact opposite effect on consumer gas prices. Reducing the domestic usage of low-cost renewable fuels like ethanol would increase demand for petroleum at a time when global oil inventories are already strained and prices are at seven-year highs.”
RFA noted that ethanol presently extends the U.S. gasoline supply by nearly 1.1 million barrels per day, equivalent to the combined crude oil production from Alaska, California, Utah, and Wyoming. According to a renowned economist and energy policy advisor to two former presidents, the use of roughly 1 million barrels per day of ethanol in the United States has lowered the average price of crude by $6 per barrel, thereby cutting the retail gasoline price by $0.22 per gallon.
The letter also pointed out that gasoline with just 10 percent ethanol (E10) is currently selling for 10-15 percent less (typically 35-50 cents per gallon) than “ethanol-free” gasoline (E0). Higher blends like E15 and E85 offer even greater savings.
“Rather than undermining the market for low-carbon renewable fuels, we encourage you to follow through on the President’s Day 1 pledge to ‘double down on the liquid fuels of the future,’” Cooper wrote. “This includes immediately proposing strong RFS volumes for 2021 and 2022, and taking swift regulatory action to facilitate the rapid expansion of E15 availability nationwide.
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Nov 15, 2021
Bioenergy accounted for approximately 3.52 million of the 12 million global renewable energy jobs in 2020, according to an annual jobs report released by the International Renewable Energy Agency (IRENA) in late October. Total bioenergy jobs were down slightly when compared to the 3.58 million reported for 2019.
Liquid biofuels accounted for 2.411 million jobs in 2020. Solid biomass, biogas, and municipal and industrial waste accounted for 765,000, 339,000, and 39,000 jobs, respectively.
The report notes that global biofuels production fell 6 percent last year, from 161 billion liters (42.53 billion gallons) in 2019 to 151 billion gallons in 2020. The decrease is attributed to market impacts associated with the COVID-19 pandemic. Ethanol output was down approximately 8 percent, while biodiesel production was relatively steady.
The U.S. and Brazil remained the world’s dominant ethanol producers last year, with a combined 83 percent share of production. The U.S., Indonesia and Brazil produced a combined 45 percent of biodiesel in 2020. The European Union accounted for 31 percent of biodiesel production.
Latin America accounted for 44.4 percent of global biofuel fuels jobs last year. Asia accounted for 33.6 percent, while North America accounted for 11.8 percent and Europe accounted for 10 percent. The relatively low labor levels in the U.S. and Europe are primarily attributed to highly mechanized agricultural operations in both regions.
According to the report, 368,000 of the world’s 765,000 solid biomass jobs are located in the European Union. An additional 188,000 jobs are located in China, with 58,000 jobs in India and 44,500 jobs in the U.S. In the U.S., 32,442 jobs were in wood biomass fuels, with 12,039 jobs in biomass power.
China accounted for 145,000 of the 339,000 global biogas jobs last year. India accounted for an estimated 85,000 biogas jobs, while 76,000 biogas jobs were located in the European Union. The number of biogas job in the U.S. was not available.
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Nov 5, 2021
NEW YORK, Nov 5 (Reuters) - The U.S. Environmental Protection Agency has rejected so far one petition from an oil refiner to be exempted from the nation's biofuel blending laws for the 2019 compliance year, EPA's website showed on Friday.
The move comes at a time when the oil and biofuel industries await an indication from the Biden administration on how it will approach blending requirements under the U.S. Renewable Fuel Standard (RFS). Though the EPA, which administers the RFS, rejected the one petition from 2019, it still has to decide on 32 pending petitions for that year.
Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation's fuel mix, or buy tradable credits from those that do. Refiners can request a waiver from the EPA that would exempt them from those requirements if they can prove the obligations would do them financial harm.
During the coronavirus pandemic, the EPA delayed a decision on blending requirements for 2021, and a finalized rule has been late by nearly a year. The deadline for 2022 requirements is the end of this month.
The oil industry and the biofuels industry have been at odds over the regulations for years. The biofuels industry says the exemptions hurt demand for their products, while independent refiners reject that claim and say that exemptions are needed for smaller refineries to stay afloat.
Aside from the 2019 compliance year, EPA's website shows that there are 28 pending petitions for 2020 and three pending petitions for 2021.
The EPA was to decide on a petition from United Refining Co (RAPPLU.UL) by Friday, after the company filed a lawsuit against EPA administration for the delay in deciding on the company's 2019 exemption petition.
United Refining did not immediately respond to a request for comment.
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Nov 4, 2021
The Renewable Fuels Association today thanked a bipartisan group of seven Midwestern governors for their efforts to explore what actions can be taken to allow the year-round sale of E15 in their states.
In a letter sent to EPA Administrator Michael Regan today, the governors seek guidance from the agency on how best to pursue a specific provision of the Clean Air Act that allows states to establish a “level playing field” for E15. The governors’ letter follows a recent D.C. Circuit Court decision that found in favor of oil refiners and overturned EPA’s 2019 regulation that finally allowed the year-round sale of E15 in conventional gasoline markets.
“In the wake of the court decision, we are exploring all of our options to ensure retailers are able to sell E15 to consumers all year long without interruption,” the letter states. “Fuel marketers and retailers, renewable fuel producers, the U.S. Department of Agriculture, and state governments have invested hundreds of millions of dollars in recent years to expand consumer access to low-cost, clean-burning fuels like E15. Not only does the recent court decision threaten to strand these public and private investments, but it also jeopardizes the progress we’ve made toward cleaning up our fuel supply and reducing emissions from transportation.”
Commenting on the letter, RFA President and CEO Geoff Cooper said, “We sincerely appreciate the efforts of these governors to protect and expand market opportunities for the region’s farmers and ethanol producers. The governors should be applauded for working together to proactively seek solutions at the state level, rather than waiting for Washington to clean up yet another regulatory mess created by the oil industry. Ethanol producers and farmers stand with these governors, and we will leave no stone unturned in our pursuit of an open and competitive marketplace for E15 and other lower-cost, lower-carbon ethanol blends. We encourage EPA to expeditiously respond to the governors and open the dialog needed to remove the outdated and absurd regulatory barrier to summertime sales of E15 in these states.”
Governors signing the letter were Kim Reynolds (R-Iowa), Pete Ricketts (R-Nebraska), Tim Walz (D-Minnesota), Tony Evers (D-Wisconsin), Doug Burgum (R-North Dakota), Kristi Noem (R-South Dakota), and Mike Parson (R-Missouri). In addition, Gov. Laura Kelly (D-Kansas) sent a similar letter to EPA in recent weeks. This bloc of eight contiguous states consumes approximately 13 billion gallons of gasoline annually. A universal move from E10 to E15 across these states would expand ethanol consumption by nearly 700 million gallons and boost corn demand by 225 million bushels.
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Oct 28, 2021
As leaders from around the world descend on Glasgow, Scotland for the 26th U.N. Climate Change Conference, also referred to as COP26, the Renewable Fuels Association reminds them that ethanol and other renewable fuels are available—today—to jumpstart global decarbonization efforts. A new one-page fact sheet released by RFA today spotlights recent research and data proving that ethanol is an immediate solution for cutting greenhouse gas emissions from transportation.
“Ethanol already cuts carbon emissions in half compared to gasoline; with smart policy measures, ethanol can do even more,” said RFA President and CEO Geoff Cooper. “Ethanol can serve as a zero-emissions fuel for cars and trucks while also helping to decarbonize the aviation, marine, and stationary power generation sectors. That’s why our members have unanimously committed to achieving a net-zero carbon footprint by 2050 or sooner. We urge world leaders gathering for COP26 to take a closer look at ethanol and encourage them to include a prominent role for renewable liquid fuels in their national decarbonization plans.”
In a July letter to President Biden, RFA’s members pledged that ethanol will achieve a net-zero carbon footprint by mid-century, if not well before, as the supply chain adopts CCUS technologies; uses more renewable energy to power biorefineries; and expands carbon-efficient feedstock production practices.
At the same time, they noted it also requires simple action from Washington. To support the achievement of its goals, RFA encouraged the administration to move forward with several key policy initiatives: development of a national Clean Fuel Standard; deployment of more flex-fuel vehicles; and support for broad adoption of carbon capture, utilization and sequestration technologies.
Ethanol producers from across the country, from California to New York, have signed onto this pledge, Cooper noted, and it is featured in an ad campaign currently running in select Morning Consult email newsletters.
For more information, visit EthanolRFA.org/pledge.
Recent Research on Ethanol and Carbon Emissions:
- In January, scientists affiliated with Harvard, MIT, and Tufts University published an analysis finding that corn starch ethanol produced in the United States reduces GHG emissions by 32 to 62 percent compared to gasoline, with a central best estimate of 46 percent.
- In February, Life Cycle Associates released a report showing that the use of ethanol and other biofuels under the Renewable Fuel Standard has reduced GHG emissions by 980 million metric tons since 2008.
- And in May, experts at the Department of Energy’s Argonne National Laboratory published a study demonstrating that average corn ethanol reduces GHG emissions by 44 to 52 percent compared to gasoline, right in line with the findings from the January study.
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