In the News
Sep 13, 2021
The Renewable Fuel Standard’s compliance credit market mechanism does not have any impact on retail gasoline prices, according to a new analysis released today by the Renewable Fuels Association. The analysis finds that while RFS compliance credits—known as RINs, or Renewable Identification Numbers—are a factor in wholesale gasoline prices, there is no evidence that RIN costs have any measurable effect on the retail prices paid by consumers.
RFA Chief Economist Scott Richman found that, not surprisingly, the main driver of recent higher retail gas prices is higher crude oil prices. He calculates that retail gasoline prices have had a correlation of 0.96 with West Texas Intermediate crude oil prices on a monthly basis from January 2013 to July 2021 (with 1.00 representing a perfect correlation and 0.00 representing no correlation whatsoever). Meanwhile, there has been essentially zero correlation (-0.05) between gasoline prices and the prices of RINs. The new analysis is consistent with similar studies conducted by Informa in 2015 and 2017.
“Higher gasoline prices this summer were caused primarily by OPEC+ oil production cutbacks and an increase in gasoline demand,” writes Richman. “Additionally, supply issues such as the Colonial Pipeline shutdown and refinery closures due to Hurricane Ida accentuated price pressures at times. RINs are a convenient target for accusations since they are not widely understood, but as the analysis confirms, RINs do not contribute to higher retail gasoline prices.”
RFA President and CEO Geoff Cooper put the report’s findings into context: “The topic of RFS compliance and RINs can be complex and confusing, and oil refiners have used that complexity to their advantage in their relentless campaign against the RFS. One minute the refiners claim RIN prices cause higher retail gas prices, implying that they somehow fully pass RIN costs on to consumers. Then the next minute they claim RINs are eating into their bottom line because they can’t pass costs along to the pump. Neither of those arguments holds water, as this new analysis shows. The truth is, merchant refiners fully recoup RIN costs by passing them along to wholesale buyers at the terminal; then the RIN value is fully offset when ethanol is blended with gasoline. There is no impact to the consumer.”
Cooper also stressed that the debate over RINs wouldn’t even exist today if refiners had appropriately reacted to the investment signals sent when the RFS was expanded nearly 15 years ago. Refiners who acquire and blend physical volumes of renewable fuel—the original intent and purpose of the RFS—secure RINs free of charge.
When it comes to retail fuel prices, the U.S. Energy Information Administration has stated that crude oil prices and gasoline supply and demand are the main drivers. The EIA estimates that the cost of crude oil accounted for more than half of what consumers paid for gasoline from 2011 to 2020, and crude oil and taxes together represented nearly three-quarters of the total.
Read the original news release here.
Sep 9, 2021
U.S. fuel ethanol production expanded by 2 percent the week ending Sept. 3, according to data released by the U.S. Energy Information Administration on Sept. 9. Weekly ending stocks of fuel ethanol were down more than 3 percent.
U.S. ethanol production averaged 923,000 barrels per day the week ending Sept. 3, up 18,000 barrels per day when compared to the prior week, and marking the first weekly increase of ethanol production since early July. When compared to the same week of last year, ethanol production for the week ending Sept. 3 was down 18,000 barrels per day.
Weekly ending stocks of fuel ethanol fell to 20.39 million barrels for the week ending Sept. 3, the lowest level of ending stocks reported since early June. When compared to the previous week, stocks for the week ending Sept. 3 were down 720,000 barrels. When compared to the same week of last year, stocks were up 397,000 barrels.
Read the original story here.
Sep 8, 2021
Today, Rep. Cindy Axne (IA-03) announced that she had secured $1,000,000,000 for biofuels infrastructure in the House’s initial draft of the Build Back Better Act to support expanded availability and use of renewable fuels.
“This is a great day for our rural communities, our agricultural economy, our planet, and for hundreds of thousands of Americans whose jobs will be supported by the investments I’ve helped secure in the Build Back Better Act,”said Rep. Axne.“Make no mistake, this was no easy fight. For months, I have been helping members of the administration, the Senate, and my own colleagues in the House understand the key advantages of biofuels – from the fact that it’s been proven to be more than twice as clean as fossil fuels to how much it can help the economies of states like Iowa. But I wouldn’t let up, because it was clear from other infrastructure negotiations that this was not as much of a priority for others in Washington.
“While I will still withhold my final decision on this package until I see the full bill, seeing these investments included will be a critical part of my choice,” Rep. Axne added.
This week, House committees are beginning to consider their sections ofthe Build Back Better Act, a comprehensive legislative package that will tackle a range of issues from infrastructure to health care, education, and climate.
Included in the initial draft of the bill is $1 billion in funding for the U.S. Department of Agriculture to provide grants over the next 8 years to expand biofuel pump infrastructure, upgrade existing tanks and pumps, and increase usage of higher blends of ethanol and biodiesel.
That investment is double the amount originally proposed by Axne in herRenewable Fuels Infrastructure Investment and Market Expansion Act, which she introduced in March.
Axne has reiterated the value that renewable fuels will have in the fight against a warming planet and a changing climate in discussions with her colleagues to secure this funding.
“The proof of a changing climate is more apparent each and every day. From devastating floods and hurricanes to droughts, derechos, and wildfires, our world’s foremost climate experts are sounding the alarm that if we do not take an all-hands-on-deck approach to lowering emissions, climate disasters will only get more frequent and more powerful,”said Rep. Axne. “If we’re going to drastically reduce our reliance on fossil fuels quickly, we can’t just rely on energy technologies that are still years away from being available in our rural areas. That’s where renewable fuels come in. Biofuels have been shown to be over 50% cleaner than fossil fuels and has the potential to be net-zero carbon emissions with continued innovation. With the right infrastructure investments, we can quickly expand the availability of this low carbon fuel across the U.S. To fight climate change, we can’t just keep arguing over what one policy is best to cut emissions. We need to use every tool in our toolbelt – both renewables and electric – to meet the challenge we’re facing.”
Background:
Rep. Axne has emphasized both in public and private for months that biofuels investments are a key priority for her in any infrastructure agenda.
In April, Axne urged relevant House committee chairs to include biofuels investments in infrastructure discussions.
Since that letter, Axne has met with dozens of House colleagues – including the committee chairs charged with agriculture, tax, and climate policies – to make the case for biofuels.
Last week, Axne again laid out the reasons to invest in biofuels to her House and Senate colleagues – penning an open letter with her Midwestern colleagues to emphasize how renewable fuels would help reduce carbon emissions and reliance on fossil fuels.
Read the original press release here.
Sept 2, 2021
WASHINGTON – U.S. Senators Amy Klobuchar (D-MN), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Tina Smith (D-MN), and Dick Durbin (D-IL) and Representatives Cindy Axne (D-IA), Angie Craig (D-MN), Cheri Bustos (D-IL), and Mark Pocan (D-WI) sent a letter to Senate Majority Leader Chuck Schumer (D-NY) and Speaker of the House Nancy Pelosi (D-CA) urging them to include support for homegrown renewable fuels in the upcoming reconciliation package.
“Providing additional market access for higher blends of low carbon fuels in the budget reconciliation process will create jobs in rural communities, lower the price of fuel for consumers at the pump, reduce our dependence on fossil fuels, and, most importantly, decrease carbon emissions,” the legislators wrote.
They continued later in the letter: “We know that the climate crisis is happening right now and we need to confront it with a sense of urgency. Our goal is to decarbonize our transportation sector through an all-hands-on-deck approach that includes investment and incentives for both electric vehicles (EVs) and homegrown renewable fuels.”
The legislators specifically asked Schumer and Pelosi to consider including the Biofuel Infrastructure and Agricultural Product Market Expansion Act, Consumer and Fuel Retailer Choice Act, Low Carbon Biofuel Credit Act, Clean Fuels Vehicle Act, Biodiesel Tax Credit Extension Act, and enacting a long-term extension of the Second Generation Biofuel Producer Tax Credit in the budget legislation.
Full text of the letter can be found HERE and below.
Dear Leader Schumer and Speaker Pelosi:
We write to respectfully urge you to make sure that the upcoming budget legislation currently being drafted includes support for homegrown renewable fuels. Providing additional market access for higher blends of low carbon fuels in the budget reconciliation process will create jobs in rural communities, lower the price of fuel for consumers at the pump, reduce our dependence on fossil fuels, and, most importantly, decrease carbon emissions.
Recent studies from the U.S. Department of Agriculture (USDA) and Harvard and Tufts Universities have demonstrated that using renewable fuels to displace fossil fuels reduces greenhouse gas emissions between 39 and 46 percent. When including on-farm adoption of climate-smart conservation practices, such as cover crops, no-till, or precision technologies, and improvements in biorefineries, emissions could be reduced by 70 percent over gasoline by 2022. Biodiesel producers are making fuels that emit as much as 89 percent less greenhouse gas compared to petroleum based diesel.
We know that the climate crisis is happening right now and we need to confront it with a sense of urgency. Our goal is to decarbonize our transportation sector through an all-hands-on-deck approach that includes investment and incentives for both electric vehicles (EVs) and homegrown renewable fuels. The above studies confirm that renewable fuels can play a complementary role to EVs, immediately cut carbon emissions, and help meet our new commitment under the Paris Climate Agreement to reduce emissions by 50 – 52 percent by 2030.
In the budget reconciliation process, we ask you to consider the following bipartisan proposals that will strengthen the production and sale of homegrown renewable fuels and allow them to play a significant role in supporting a greener economy.
- Biofuel Infrastructure and Agricultural Product Market Expansion Act(S.2271/H.R.1542): Fuel retailers want to offer smarter fuel options to their customers and consumers want to purchase lower cost and more environmentally friendly fuel, but a lack of federal investment has prevented them from moving forward. This legislation would provide for the installation of new fuel pump infrastructure to deliver ethanol blends greater than 10 percent and biodiesel blends greater than 20 percent. This sorely needed federal investment in renewable fuel infrastructure will allow small businesses across the nation to provide cleaner, more affordable, and lower emission options to American drivers.
- Consumer and Fuel Retailer Choice Act (S.2339/H.R.4410): In 2019, the Environmental Protection Agency (EPA) finalized a rule to extend a Reid Vapor Pressure (RVP) volatility waiver to fuel blends with 15 percent ethanol (E15). The rule allowed for an open marketplace with more fuel options for consumers while encouraging competition and driving down fuel costs. E15 has been proven to lower evaporative and tailpipe emissions when compared to 10 percent ethanol fuel. Unfortunately, a July D.C. Circuit court ruling vacated EPA’s final rule. This legislation would make permanent the ability of retailers to sell E15 year-round.
- Low Carbon Biofuel Credit Act (S.2262/H.R.4254): Federal tax incentives – along with the Renewable Fuel Standard (RFS) – have been critical in the development of homegrown renewable fuels. This legislation would build upon previous renewable fuel tax incentives by establishing a low carbon fuel tax credit to incentivize ethanol blends of 15 percent or greater in the marketplace, which will reduce emissions, diversify our fuel supply, and provide for rural economic development.
- Clean Fuels Vehicle Act (S.2267): The ability of renewable fuels to decarbonize liquid transportation fuels has been constrained due to the fact that roughly 90 percent of the vehicles on the road today are legally approved to use only E15 or less. The production of flex fuel vehicles (FFVs) – vehicles capable of utilizing higher blends of ethanol like E85 – peaked in model year 2014 at 2.8 million vehicles and fell to just 716,000 for model year 2019. This legislation would incentivize Original Equipment Manufacturers (OEMs) to manufacture FFVs for the market by offering a $200 tax credit and restoring Corporate Average Fuel Economy (CAFE) credits for FFV production. The more renewable fuel that can be utilized in the light duty vehicle fleet, the lower the carbon emissions and better the air quality will be for all Americans.
- Biodiesel Tax Credit Extension Act (S.1806/H.R.3472): The domestic growth in production of biodiesel has been spurred through the biodiesel tax credit. After the 2019 extension of the credit, production grew more than 150 million gallons despite headwinds from coronavirus related market challenges. This legislation would extend the current federal biodiesel tax credit through 2025. The U.S. Department of Energy has noted that when used as a vehicle fuel, biodiesel offers considerable greenhouse gas emissions benefits, including a lifecycle analysis for 100 percent biodiesel (B100) that showed a 74 percent reduction in emissions as compared to petroleum diesel.
Finally, we also support enacting a long-term extension of the Second Generation Biofuel Producer Tax Credit (§40(B)), which expired in 2020. This $1.01 per gallon credit will help increase the production of advanced biofuels that cut carbon emissions between 70 and 126 percent.
We believe Congress can and should do more to ensure support for homegrown renewable fuels. We encourage you to include these provisions in the upcoming budget reconciliation package.
Read the original press release here.
Sep 2, 2021
The U.S. exported 51.64 million gallons of ethanol and 1.06 million metric tons of distillers grains in July, according to data released by the USDA Foreign Agricultural Service on Aug. 2. Exports of both products were down when compared to July 2020.
The 54.64 million gallons of ethanol exported in July was down significantly from both the 81.86 million gallons exported during the previous month and the 72.91 million gallons exported in July of last year.
The U.S. exported ethanol to more than 30 countries in July. Canada was the top destination for U.S. ethanol at 29.24 million gallons, followed by South Korea at 5.32 million gallons, and the Netherlands at 4.02 million gallons.
The value of U.S. ethanol exports was at $138.82 million in July, down from $189.11 million in June, but up from $129.47 million in July 2020.
Total U.S. ethanol exports for the first seven months of 2021 reached 715.86 million gallons at a value of $1.39 billion, compared to 788.55 million gallons at a value of $1.36 billion exported during the same period of last year.
The 1.06 million metric tons of distillers grains exported July was up from the 939,177 metric tons exported in June, but down slightly from the 1.08 million metric tons exported in July 2020.
The U.S. exported distillers grains to nearly three dozen countries in July. Mexico was the top destination at 247,511 metric tons, followed by Turkey at 151,738 metric tons and Vietnam at 151,499 metric tons.
The value of U.S. distillers grains exports reached $262.64 million in July, up from $248.55 million in June and $226.47 million in July of last year.
Total U.S. distillers grains exports for the first seven months of this year reached 6.49 million metric tons at a value of $1.69 billion, compared to 6.02 million metric tons at a value of $1.29 billion exported during the same period of 2020.
Additional data is available on the USDA FAS website.
Read the original story here.
Aug 30, 2021
The USDA predicts fiscal year (FY) 2021 ethanol exports will be at $2.2 billion, down $60 million when compared to FY 2020. Moving into FY 2022, however, U.S. ethanol exports are expected to reach $2.4 billion, up $200 million from FY 2021.
The agency made those predictions in its latest quarterly trade forecast, released Aug. 26. Beginning with this latest quarterly trade forecast, the USDA said it is adopting the World Trade Organization’s definition of “agricultural products,” which adds ethanol, distilled spirits and other products to the agency’s previous definition of agricultural products.
According to the Aug. 26 export forecast, the USDA currently predicts U.S. ethanol exports for FY 2022 will reach $2.4 billion, up $200 million from FY 2021 on volume and unit value gains. The agency said higher expected corn prices keep ethanol unit values elevated. Modest volume gains are projected for many markets, as gasoline fuel markets continue to recover and demand for industrial ethanol grows with the economic recovery and continued elevated demand for disinfectants.
For FY 2022, the largest export gains for U.S. ethanol are expected for Brazil and the U.K. The USDA said an expected sharp sales increase to Brazil is supported by the recent drought and frost damage that lowered sugarcane yields, higher sugar prices, and ongoing fuel recovery demand. The U.K. is raising its fuel ethanol blend to E10 this fall, increasing their overall demand, the agency added. India’s push to meet its E20 by 2025 continues to expand the demand for industrial ethanol. Uncertainty persists on the future of fuel ethanol exports to China, according to the USDA. The agency also said that the proportion of U.S. ethanol exports used as fuel remains at a historically low 60 percent since the pandemic eroded gasoline use and spurred demand for disinfectants.
For FY 2021, the USDA predicts ethanol exports will be at $2.2 billion, down $60 million from the previous year with higher export unit values only partially offsetting lower export volume. U.S. exports of fuel ethanol to Brazil in FY 2021 have fallen to levels not seen in a decade, according to the agency. In addition, Colombia’s lower blend mandate has reduced imports from the U.S. Exports sales to Mexico and Nigeria are also down from FY 2020 records, following the earlier demand surge for medical-grade ethanol. U.S. industrial ethanol sales to India are lower due to higher U.S. prices and the substitution of surplus sugar supplies to ethanol. U.S. fuel ethanol exports to China reached their second-highest level on record due to low, early-year U.S. prices, according to the USDA. U.S. sales to Canada are up on fuel demand recovery, while sales to South Korea are up due to record demand for industrial product.
Read the original story here.
Aug 25, 2021
Representatives of the ethanol industry called on the U.S. EPA to address high-octane, low-carbon fuels as part of its proposed greenhouse gas (GHG) emissions standards for 2023-2026 light-duty vehicles during a hearing held Aug. 25.
The EPA on Aug. 5 released a proposed rule to set light-duty vehicle GHG emission standards through 2026. Despite calls from government officials and industry trade groups, the proposed rule does not currently address biofuels or include a high-octane standard.
The proposed rule aims to revise the SAFE Vehicles Rule finalized by the Trump administration in March 2020. That rule replaced CAFE and GHG emissions standards put in place by the Obama administration. President Biden directed the EPA and U.S. Department of Transportation’s National Highway Traffic Safety Administration to revise the existing CAFE and GHG emission standards through an executive order issued in January 2021.
The proposed rule would set an industry-wide target of 171 grams of CO2 per mile, or a 52 miles per gallon (mpg) equivalent, for model year 2026 passenger cars and light trucks. That is more stringent than the 205 grams of CO2 per mile, or 43.3 mpg, standard put in place by the current SAFE rule. A previous rule put in place in 2012 would have set the standards at 177 grams of CO2 per mile, or 50.1 mpg.
The agency held a virtual hearing on the proposed rule on Aug. 25. Representatives of the American Coalition for Ethanol, Renewable Fuels Association and Growth Energy were among those to offer testimony at the event.
Testimony offered by Brian Jennings, CEO of ACE, emphasized how the proposal must place much greater emphasis on improving the quality of liquid fuel, which 98 percent of the 270 million light-duty vehicles on the road use, by including steps to replace fossil fuel with a lower carbon and higher octane fuel, such as ethanol, in order to significantly cut CO2 emissions from their tailpipes.
“If the overarching goal is net-zero emissions by mid-century, let’s start making progress right now by taking full advantage of the 15 billion gallons of domestically produced ethanol available today as an affordable way to boost octane and meaningfully reduce GHG emissions from gasoline powered engines,” Jennings remarks state.
Jennings testimony on behalf of ACE members concludes by highlighting three recommendations for EPA’s consideration in the final rule that ACE will detail, along with others, in its submitted comments. Those recommendations include the establishment of a research octane number (RON) rating for fuel in the range of 98 to 100 RON with 25 to 30 percent ethanol and provide automakers with a corresponding cert fuel for engine testing purposes; adoption of the latest U.S. Department of Energy GREET model with respect to the lifecycle GHG emissions of ethanol and other transportation fuels; and the establishment of a technology-neutral approach that provides automakers with incentives to produce flexible fuel vehicles (FFVs) and vehicles designed to achieve optimal efficiency and reduced emissions on high octane ethanol blends.
Testimony offered by Geoff Cooper, president and CEO of the RFA, also focused on the inclusion of high-octane, low-carbon fuels. “If our nation is to reach its goal of net-zero GHG emissions by mid-century, we’ll need both cleaner, more efficient cars and cleaner, more efficient fuels,” Cooper said in prepared remarks. “That’s why RFA’s member companies recently committed to achieving a net-zero carbon footprint by 2050 or sooner.”
RFA expressed its disappointment that EPA’s proposed GHG standards continue to focus solely on engines and vehicles, while ignoring the important influence of fuels on emissions and mileage.
“Unfortunately, EPA’s proposal fails to recognize that the fuels we put into our engines can have as much—or more—impact on fuel economy and GHG emissions as the engine technologies themselves,” Cooper said, noting that the proposal assumes automakers will increase production of certain engine technologies that rely on higher-octane fuels. “The proposed rule counts on broad deployment of high-compression ratio engines that will require high-octane fuel but does nothing to ensure those high-octane fuels will actually be produced and available in the marketplace.”
Cooper concluded by calling on EPA to use the current rulemaking, as well as the upcoming process to set GHG standards for 2027 and beyond, to create a higher octane standard for gasoline.
“Action by the EPA will be necessary to catalyze the development and introduction of cleaner, more efficient fuels into the marketplace, just as EPA action was required to eliminate lead, limit benzene, and reduce the sulfur content of our gasoline and diesel fuel,” Cooper added. “We respectfully ask that EPA use the current rulemaking process and future rulemakings to establish the roadmap for increasing the required minimum octane rating of our nation’s light-duty vehicle fuel.”
Chris Bliley, senior vice president of regulatory affairs at Growth Energy, urged EPA to consider the vital role that environmentally sustainable fuel options, such as ethanol, will play in reducing GHG emissions from the current and future vehicle fleet in his testimony.
“We appreciate EPA’s work to reshape the nation’s transportation mix to make it more sustainable as it is a central driver for our industry as well,” Bliley said. “Vehicles and fuels operate as a system and liquid fuels will continue to play a dominant role in the transportation sector for decades to come, even as alternative technologies flourish. As such, it is imperative to consider the vital role that environmentally sustainable fuel options such as ethanol will play in reducing greenhouse gas emissions from the current and future vehicle fleet.”
Read the original story here.
Aug 12, 2021
As policymakers in South Korea and Japan consider new emission reduction initiatives, the U.S. Grains Council (USGC) is working to demonstrate the carbon-reduction benefits of blending ethanol into local fuel supplies.
South Korea announced a goal last fall of achieving carbon neutrality by 2050. Since then, the Korean public and private sectors have been preparing scenarios and implementation measures for carbon reduction. In May 2021, a Carbon Neutrality Committee was launched to establish the 2050 Carbon Neutrality policy measures and, in the future, play a role in setting carbon neutrality policies.
Haksoo Kim, USGC director in South Korea, has been reaching out to stakeholders to offer information on ethanol’s contributions to these goals. He has spoken at events hosted by the Korea Biofuel Forum and the Transportation Sector Working Group of the Carbon Neutrality Committee, where he focused on the importance of a renewable fuel standard (RFS) in achieving 2050 carbon neutrality in South Korea.
“This year is the best time to create an environment for expanding ethanol use by persuading the government to introduce a fuel ethanol renewable fuel standard (RFS) to offer carbon benefits,” Kim said.
USGC will also co-host the Climate Crisis and Biofuel Symposium on Sept. 8 and will have a booth at the Seoul International Motor Show from Nov. 16 to Dec. 5.
South Korea, a major importer of U.S. grains and grain products, imported 81 million gallons of U.S. ethanol in 2020, mostly for industrial uses including sanitizer products and windshield washer liquid.
Like South Korea, ethanol is a major focus for the Council in Japan, another critical trading partner for the U.S. grains sector.
Japan’s strategic energy plan is being revised this summer, and policies are also in development to lead the country to carbon neutrality by 2050. Direct blending of ethanol presents an immediate opportunity for Japan to further reduce transport emissions under these policies.
Japan does not currently blend ethanol directly, instead relying on pre-blended ethanol in the form of ethyl tertiary-butyl ether (ETBE), reducing 712,000 tons of CO2 emission per year. Japan has an average blend rate of just 1.9 percent; direct blending at an E10 level would immediately expand CO2 emission reductions by five times.
The total potential U.S. market share today in Japan for ethanol is up to 66 percent of the estimated demand of 217 million gallons of ethanol used to make ETBE, equal to 142 million gallons per year.
“It’s important to make Japan aware of the benefits of bioethanol in reducing carbon emissions in the transportation sector, which is a focus of our work daily,” said Tommy Hamamoto, USGC director in Japan.
Read the original story here.
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Aug 21, 2021
After suffering through more than a year of quarantines, stay-at-home orders, and travel lockdowns, millions of Americans have eagerly returned to the nation’s highways this summer for long-awaited vacations and road trips. As a result, gasoline demand has surged to record highsand pump prices are at levels not seen since 2014.
In recent weeks, regular-grade gas prices averaged $3.17 per gallon, up almost 50 percent from the same time last year. With higher fuel prices threatening to undermine the nation’s ongoing economic recovery, it’s easy to see why the Biden administration is looking for ways to ease America’s pain at the pump.
But what’s not easy to see is why the White House recently chose to respond to higher pump prices bypushing OPEC+ countries to increase oil production. It was a baffling move that raised eyebrows across the political spectrum. After all, calling on countries like Saudi Arabia and Russia to boost their output of dirty, high-carbon crude oil obviously runs counter to the president’s stated goals regarding climate change, clean energy, domestic job creation and energy security.
At the same time, the administration’s ambitious electric vehicle goals are taking a hit due to geopolitical instability and uncertainty regarding the availability of minerals needed for electric vehicle batteries. The rapid fall of Afghanistan to the Taliban regime threatens to hand one of the world’s largest deposits of lithium— the most crucial mineral for batteries — over to Russiaand China, which already dominates the world market for rare earth metals. Indeed, the Pentagon once warned that Afghanistan could become the "Saudi Arabia of lithium.”
Before the Biden administration looks to OPEC+ countries or mineral-rich nations like Afghanistan, China and Bolivia for help, it has an opportunity to turn to America’s heartland for a homegrown solution. Renewable fuels like ethanol have a 40-year proven track record of success in helping to lower prices at the pump while simultaneously reducing carbon emissions, supporting good-paying clean energy jobsand curtailing crude oil imports.
Four decades’ worth of investment and innovation by ethanol producers has resulted in real breakthroughs in lower-carbon transportation fuels. Today’s corn-based ethanol reduces carbon emissions by 52 percent when compared directly to gasoline, according to a recent studyfrom the Department of Energy’s Argonne National Laboratory. Another studyby scientists from Harvard University, Massachusetts Institute of Technology (MIT) and Tufts University similarly shows corn ethanol achieves an average carbon reduction of 46 percent compared to gasoline, with some ethanol in the market today achieving a 61 percent carbon reduction.
In response to policies like the Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard, and Oregon Clean Fuels Program, along with the Biden administration’s recommitment to the Paris Agreement, the pace of low-carbon innovation and investment is accelerating. We firmly believe ethanol will achieve a net-zero carbon footprint in the years ahead, as the supply chain adopts carbon capture and sequestration technologies, uses more renewable electricity and biogas to power biorefineries, and expands carbon-efficient feedstock production. In fact, the members of my organization sent a letterto President Bidenin July pledging to ensure that ethanol is a fully carbon-neutral fuel source by 2050 or sooner.
For this vision to become a reality, our industry is looking to the Biden administration and Congress to take action that drives further innovation and creates certainty in the biofuels marketplace. The first step should be enforcing robust RFS volumes and resisting presurefrom oil refiners to waive biofuel blending requirements or push their blending obligations off on retail gas station owners. In addition, Congress and the administration should support the development of a national clean fuel standard, as well as provisions to expand ethanol infrastructure and production of flex-fuel vehicles that can operate on fuels containing up to 85 percent ethanol.
Before we turn to the Persian Gulf for answers to our nation’s energy and climate challenges, let’s give the American heartland a shot. The solution to high pump prices and decarbonization lies in the farm fields of Minnesota, Wisconsin, Iowa and other Midwest states — not in the oil fields of Iraq, Saudi Arabia, and other Middle East nations.
Read the original story here.
Aug 11, 2021
If the global priority with regards to the transportation sector is to reduce carbon emissions, then putting all our eggs in one basket and waiting for electrification to transform the world is already a failed strategy. With nearly 1.5 billion vehicles in the world, and with more than 90 million new vehicles sold annually (*nonpandemic years, of course), it is impossible to envision a transition to relying on only battery electric vehicles (BEV) any time soon, no matter what governments may try to do in terms of sales requirements. So, what should be done regarding the existing and continuing combustion engine-liquid fuels market? To find viable solutions—and we certainly can—we must adopt a broader perspective, be open to options and think about engines and fuels as a system.
Relevant to this topic is our musical feature of the month: Willie Nelson. The song “On the Road Again” plays well with some of the recurring themes found in this column, but the primary importance is found with Willie himself, a strong advocate for the use of biofuels who even established a brand of biodiesel called “BioWillie.” His support for the fuel was based upon personal experience with its performance but also his interest in supporting farmers and reducing America’s reliance on foreign oil.
There are options to improve the emissions profile and lower the carbon impact of traditional powertrains by evaluating engines and fuels from a systemic perspective. One of the most developed efforts in this context involves high compression engines and higher-octane fuel. The U.S. Department of Energy’s Co-Optimization of Fuels and Engines initiative has done great work evaluating what might be possible and how fuel enabling more efficient engine design could be produced.
In addition to what Co-Optima has produced, the Fuels Institute published two reports on octane evaluating its role in engine performance and what it would take to introduce a new high-octane fuel into the market to support advanced engine design. Short story: It would take about 20 years and cost quite bit of money to transition the entire market. But the idea of maximizing fuel properties to improve the efficiency of engines is the right approach, and the results of the Co-Optima research provide some valuable insights into possibilities.
The octane discussion continues, and there are opportunities to be exploited.
BIOWILLIE AND FRIENDS
We have been blending biofuels into petroleum products for decades, and there could be opportunities to leverage that experience to reduce the overall carbon intensity of our fuel, thereby having an immediate impact on carbon emissions from existing and future combustion engine vehicles.
According to the California Air Resources Board (CARB), biofuels already provide a lower carbon footprint than hydrocarbon fuels and are projected to improve over time as energy inputs for producing the fuels becomes greener. Compared with California-specification gasoline, starch ethanol (i.e., produced from corn) is 28% less carbon intense and is projected to reach 55% reduction by 2040. Meanwhile, biomass-based diesel (both biodiesel and renewable diesel) is 70% less carbon intense. These are fuels currently available throughout the market with decades of user experience.
While there are some compatibility issues associated with increasing the use of biofuels, these can be overcome on a shorter time frame than will be required to convert the fleet to BEVs. And, according to a study currently under development by the Fuels Institute (slated for release this summer), there are business opportunities associated with the retail of biofuel blends.
The benefits of incorporating more biofuel blends into the market can be enhanced if we apply the systems approach mentioned above. Not all vehicles are manufactured to run on all the biofuel blends that can be brought to market, but if there were a strategy in place in which new combustion engines were designed to take advantage of the performance properties of biofuels, then new markets could develop.
LESSONS FROM THE HIGHWAYMEN
Willie Nelson was a great solo act, but he also found success by joining with Johnny Cash, Waylon Jennings and Kris Kristofferson to form the Highwaymen—a country music supergroup. I think our policymakers can learn a lot from this example of bringing together the best of the best to create something even better—let’s combine the best options available to us to reduce emissions.
I believe the next couple of years represent a unique opportunity to consider the future of federal biofuels policies. The statutory volumetric standards of the Renewable Fuel Standard extend only through 2022, at which point the Environmental Protection Agency will be fully responsible for setting requirements. There are many who believe the program needs to be reconsidered by Congress, and some are suggest that California’s Low Carbon Fuel Standard should be reviewed as a possible model. I have no idea how these discussions will play out, but the data suggest a robust biofuels policy could be a significant contributor to the overall objectives of lowering our carbon emissions.
In the shadow of all the attention being given to electrification, it is my hope that policy discussions will incorporate the many ideas that exist and do not ignore the continuous role of the dominant transportation energy source in the world—liquid fuels.
Read the original story here.
Aug 10, 2021
The U.S. Energy Information Administration increased its forecast for 2022 ethanol production in its latest Short-Term Energy Outlook, released Aug. 10. The forecasts for 2021 ethanol production and 2021 and 2022 ethanol blending were maintained.
The EIA currently predicts fuel ethanol production will average 970,000 barrels per day this year, up from 910,000 barrels per day in 2020. In 2022, ethanol production is currently expected to average 1.01 million barrels per day, up slightly from the agency’s forecast of 1 million barrels per day made in the July STEO.
On a quarterly basis, ethanol production is expected to average 1.01 million barrels per day during the third quarter of this year, falling to 980,000 barrels per day in the fourth quarter. In 2022, ethanol production is expected to average 980,000 barrels per day in the first quarter, 1.02 million barrels per day in the second quarter, 1.03 million barrels per day in the third quarter, and 1.02 million barrels per day in the fourth quarter.
Ethanol blending is currently expected to average 900,000 barrels per day in 2021, up from 820,000 barrels per day in 2020. Moving into 2020, ethanol blending is expected to increase to an average of 920,000 barrels per day.
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Aug 9, 2021
Growth Energy, Renewable Fuels Association, National Biodiesel Board, National Corn Growers Association, National Farmers Union and American Farm Bureau Federation are urging federal lawmakers to ensure any future tax credit for sustainable aviation fuel (SAF) is based on accurate carbon accounting lifecycle analysis led by the U.S. Department of Energy.
The six biofuel and ag groups on Aug. 6 sent a letter to the U.S. Senate Committee on Finance and the U.S. House of Representatives Committee on Ways and Means outlining recommendations for a sound and effective SAF tax credit.
“As the Senate and House of Representatives consider new legislation to establish a tax credit for sustainable aviation fuel (SAF) this year, we respectfully request this tax credit be based on the most updated and accurate science-based lifecycle carbon assessment (LCA) methods,” the groups wrote. “Without a sound LCA as its basis, a SAF tax credit will be significantly less effective in driving investment in new fuels and reducing aviation emissions.
“Numerous members of our respective organizations are poised to produce SAF or sustainable feedstocks for SAF,” they continued. “Many others are looking to work toward participation in the full value chain in the relatively near future. We recognize the importance of decarbonizing the aviation sector with low carbon liquid fuels. Because biomass feedstocks are essential SAF sources, it is imperative that the tax credit properly account for the lifecycle emissions of these sources and the petroleum products these new fuels will replace.”
The ag and biofuel groups ask lawmakers to make the DOE the lead agency in establishing a regularly updated LCA for any SAF credit. “Across our federal government, DOE has the best resources, expertise, and current ability to assess lifecycle emissions fairly and scientifically,” the groups wrote. “At minimum, the DOE should be a full and equal partner in this role with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA).”
The letter explains that current legislation relies heavily on LCA modeling from the International Civil Aviation Organization. That modeling, the groups explain, does not use the most comprehensive model approaches or most recent data for some important SAF pathways. As a result, “carbon intensity estimates under ICAO for some SAF pathways are inaccurate and inappropriately penalized,” the groups said.
The letter also points to potential problems with the use of EPA modeling. “Unlike the DOE, EPA does not maintain a regularly updated LCA model or methodology for biofuels,” the groups wrote. “Notably EPA’s most recent comprehensive analysis for biofuels was conducted in 2009. EPA’s analysis does not reflect or capture the continuous improvement that has been witnessed over the past decade in biomass production or the technology and efficiency improvements in fuel production. As climate-smart agriculture practices continue to improve and expand and as new fuel production technologies for SAF are developed and scaled to market, a regularly updated LCA is essential to the success of a SAF tax credit and its ability to incentivize new fuels and reduce emissions.”
In addition, the biofuel and ag groups ask lawmakers to ensure LCA for petroleum jet fuels be based on the most recent and accurate data and recommend Congress designate a baseline carbon intensity value for fossil jet fuel.
“In summary, our recommendation for a sound, sustainable, and effective SAF tax credit is to ensure the legislation allows a DOE-led LCA, unencumbered by ICAO, utilizing USDA expertise on agriculture feedstocks,” the groups wrote. “Furthermore, a date-certain, near-term transition to this DOE-led LCA methodology must be an integral part of any SAF tax credit legislation. Finally, we urge that you consider establishing or directing a clear baseline emissions value for petroleum-based aviation fuel, informed by the most recent science and data.
“Without these reforms, the federal government’s desire to promote and develop robust domestic SAF production capabilities as quickly as possible will be put at serious risk,” they continued. “Sustainable biomass use, with a proper, scientifically driven LCA, is essential to produce SAF here in America for domestic and international consumption. Our organizations could only support a SAF tax credit with a sound LCA as its basis.”
A full copy of the letter can be downloaded from the Growth Energy website.
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Aug 5, 2021
August 5, 2021 — American exports of ethanol bounced back by 16% in June to 81.9 million gallons. Nearly three-fourths of all U.S. ethanol exports were shipped to just three countries, with Brazil and China markedly absent from the list. Exports to Canada—our largest customer—jumped 23% to 33.5 mg. South Korea imported 15.9 mg (up 76%) and Peru imported a record 9.4 mg (a seven-fold increase from May). Other substantial markets included Mexico (5.4 mg, up 68% to a ten-month high), the Netherlands (3.8 mg), Jamaica (3.3 mg), India (3.2 mg), and Sweden (2.0 mg). U.S. ethanol exports for the first half of 2021 totaled 664.2 mg, or 7% less than last year at this time.
The U.S. logged the first significant imports of foreign ethanol of the year. Brazil exported 12.6 mg of undenatured ethanol while a minimal volume of denatured ethanol arrived from France and Canada.
U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—eased 10% to 939,177 metric tons (mt). Mexico imported 232,786 mt (slipping 9%), representing a quarter of all U.S. DDGS exports in June, and remained our top customer for the ninth consecutive month. Sales to Vietnam were robust at 119,463 mt (up 11%) and New Zealand imported a record 66,612 mt. However, DDGS exports to South Korea dropped 28% to 72,857 mt for the lowest volume in a year. Other larger trade partners included Indonesia (61,148 mt, down 6%), Turkey (55,727 mt, down 29%), Canada (55,388 mt, up 45% to the largest volume in nearly two years), Japan (34,744 mt, down 35%), Israel (32,658 mt, up 19%), and Thailand (25,209 mt, down 52%). Total DDGS exports for the first half of the year totaled 5.42 million mt, or 10% ahead of last year.
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Jul 29, 2021
The U.S. Grains Council (USGC) brought members together in person Wednesday for the first time since the beginning of the pandemic, launching its summer annual meeting in Des Moines, Iowa, and online through a virtual meeting platform.
Joining for his first in-person meeting since taking on his role as U.S. Department of Agriculture Secretary, Tom Vilsack addressed attendees on the status and future of U.S. agricultural trade.
Vilsack began his remarks by calling the U.S. grains industry the “secret sauce” of trade, noting that its members understand the importance of partnership to growing export demand.
“We are in the process at USDA to build back better for trade,” Vilsack said. “We’ve been working on removing barriers to trade and are ready to engage more frequently and closely with our counterparts in other countries. American agriculture is at the center of that work because if something happens internationally, U.S. ag will feel that change. We are prepared and ready to look for more opportunities and diversity in trade partners.”
In addition, Vilsack emphasized the continued need for biofuels in the future, including for aviation and marine use.
“It will be a long time before we’re in the position where we won’t need biofuels. We need to take a look at creative ways that we can use bio-based products. If we can do this, I think we’ll see a bright future for American agriculture,” he said.
USGC Chairman Jim Raben, a farmer from Illinois, began the 61st Annual Board of Delegates Meeting by thanking the industry for their perseverance during the global pandemic.
“Over the last year, our members provided customers around the world a virtual, behind-the-scenes look at their operations and ensured our global partners that the United States would continue to provide them a reliable, high-quality product, despite these uncertain times,” Raben said.
“Likewise, our staff – time and time again – have stepped up to the plate and trade has continued despite the pandemic keeping us at home and the technology challenges we’ve all encountered and had to overcome.”
USGC President and CEO Ryan LeGrand offered his assessment of where markets stand for U.S. corn, sorghum, barley, distiller’s dried grains with solubles (DDGS) and ethanol.
“During this time, we were challenged to think in new ways, figure out how we could use technology to keep servicing our customers and to keep markets open,” he said. “I can definitively say we have been successful. We’ve had record sales of U.S. corn and U.S. sorghum during this period. While it’s still a challenging trade horizon beyond our shores, it’s one that holds great promise.”
Nearly 400 in-person and online attendees also heard a recorded presentation by former World Trade Organization (WTO) Deputy Director-General Ambassador Alan Wolff and a live presentation by futurist Christopher Kent of Foresight Alliance, who shared his vision for what U.S. trade may look like in a post-COVID world.
World Food Prize winner, Ohio State University distinguished professor and soil scientist Dr. Rattan Lal spoke on the role of agriculture in sustainability as the world emerges from the global pandemic.
In the afternoon, attendees spent time in one or more of seven Council Advisory Team (A-Team) meetings. Each A-Team has a specific focus – including Asia, Ethanol, Innovation and Sustainability, Middle East/Africa/South Asia, Trade Policy, Value-Added and Western Hemisphere – allowing members the chance to offer input, set priorities and help determine the Council’s course of action over the coming year.
On Thursday, Council programming is scheduled to focus on selected markets around the world in which it works – including Latin America, the Middle East and Africa, South Asia, Mexico and China. The meeting will culminate on Friday with the Council’s Board of Delegates meeting, appointment of new A-Team leaders and election of members of the 2021/2022 Board of Directors.
More from the meeting is available on social media using the hashtag #grains21.
Read the original press release here.
Aug 2, 2021
ST. PAUL, MINN. (August 2, 2021) - CHS Inc., the nation’s leading agribusiness cooperative, will expand access to higher ethanol blend fuels by offering E15 through 19 additional fuel terminals starting in early August 2021.
CHS is registered with the U.S. Environmental Protection Agency (EPA) as an E15 manufacturer and sells E15 as an approved grade of fuel through its Cenex® brand retail locations.
CHS plans to offer E15 at the following Magellan terminals: Alexandria, Minnesota; Cheyenne, Wyoming; Columbia, Missouri; Des Moines, Iowa; Doniphan, Nebraska; Fargo, North Dakota; Grand Forks, North Dakota; Great Bend, Kansas; Mankato, Minnesota; Marshall, Minnesota; Mason City Iowa; Milford, Iowa; Minneapolis, Minnesota; Omaha, Nebraska; Rochester, Minnesota; Springfield, Missouri; Waterloo, Iowa. The fuel will also now be available through the Nustar terminal in Jamestown, North Dakota; as well as the CHS terminal in McPherson, Kansas.
In addition to these terminals, CHS already offers E15 at 10 Nustar terminals and one CHS terminal.
“As the nation’s leading farmer-owned cooperative, expanding options for ethanol blended fuel is important for our Cenex brand retailers and our farmer-owners,” says Akhtar Hussain, director of refined fuels marketing, CHS. “CHS has always been committed to offering ethanol blended flexible fuels throughout its network of 1,450 Cenex brand retail facilities. We continue to demonstrate this commitment by working with our terminal partners to offer higher ethanol blends in a broader geography across the Cenex retail network.”
To make E15 more accessible, CHS has removed barriers for its Cenex brand retail locations by establishing an EPA-approved misfueling mitigation plan – the only refiner to do so – and establishing E15 as a qualifying grade of fuel. CHS also owns two EPA-approved ethanol plants in Rochelle and Annawan, Illinois.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, agronomy, grains and foods, CHS is committed to creating connections to empower agriculture, helping its farmer-owners, customers and other stakeholders grow their businesses through its domestic and global operations. CHS supplies energy, crop nutrients, seed, crop protection products, grain marketing services, production and agricultural services, animal nutrition products, foods and food ingredients, and risk management services. The company operates petroleum refineries and pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.
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Juil 29, 2021
The USDA recently released its Grain Crushings and Co-Products Production report for July, reporting that corn use for fuel ethanol in May was up significantly from both the previous month and May 2020.
Total corn consumed for alcohol and other uses was at 503 million bushels in May, up 9 percent from the previous month and up 42 percent from May 2020. May 2021 usage included 91.2 percent for alcohol and 8.8 percent for other purposes.
Corn consumed for fuel alcohol reached 488 million bushels, up 10 percent from the previous month and up 49 percent when compared to May 2020. Corn consumed for dry milling fuel production and wet milling fuel production was 91.7 percent and 8.3 percent, respectively.
Approximately 182,000 hundredweight (cwt) (10,192 tons) of sorghum also went to fuel ethanol production in May, down from 2.047 million cwt in May 2020. The volume of sorghum used for fuel ethanol production in April 2021 was withheld by USDA to avoid disclosing data for individual operations.
At dry mills, condensed distillers with solubles production reached 95,299 tons, up from 86,074 tons in April and 80,971 tons in May 2020. Corn oil production reached 167,905 tons, up from 149,431 tons the previous month and 105,231 tons in May of the previous year. Distillers dried grains production increased to 380,620 tons, up from 342,870 tons in April and 205,750 tons in May 2020. Distillers dried grains with solubles production reached 1.94 million tons, up from 1.77 million tons the previous month and 1.24 million tons in May 2020. Wet distillers grains production reached 1.08 million tons, up slightly from the previous month and up significantly from 739,106 tons in May 2020. Modified distillers wet grains production was at 320,803 tons, down from 373,090 tons in April, but up from 242,365 tons the same month of last year.
At wet mills, corn germ meal production reached 64,607 tons, up from 63,568 tons in April and 64,200 tons in May 2020. Corn gluten feed production reached 299,123 tons, up from 291,558 tons the previous month and 291,064 tons in May of last year. Corn gluten meal production reached 114,135 tons, up from 113,905 tons in April and 91,013 tons in May 2020. Wet corn gluten feed production was at 208,575 tons, up from 202,491 tons in April, but down from 211,741 tons in May 2020.
At dry and wet mills, carbon dioxide captured reached 229,471 tons, up from 225,169 tons in April and 149,453 tons in May 2020.
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