Biofuel Leaders See Cargo Ships as a Big Market — if the Trump Administration Won't Get in the Way

by Rachel Cramer (Harvest Public Media/KCUR) Biofuel leaders say the shipping industry could be a golden goose for ethanol and soy-based biodiesel. One of the big barriers is the Trump administration, which torpedoed a global agreement to reduce pollution.

Even though the Midwest is far from any oceans, the marine industry came up multiple times at one of the largest biofuels policy conferences in the U.S. last week.

“There are massive new markets out there that are looking for the very solutions that renewable fuels have to offer,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association, which organizes the annual event. “The marine industry represents an 80 billion gallon a year opportunity.”

Shaw said renewable fuels have been “stuck in neutral,” pointing to three years of stagnant ethanol production in Iowa, along with a ten-year low for biodiesel.

A recent study prepared for the Iowa Corn Growers Association and Iowa Renewable Fuels Association predicts the gap will continue growing unless farmers and processors can access new and emerging markets.

Dave Miller, chief economist of the company that prepared the study, said during a press call that allowing the year-round sale of E15 would help.

Replacing the lower-blend E10 with E15 across the U.S. could close the demand gap for corn by 2031, Miller said. But he warned the gap could continue to grow again soon after.

“E15 is not an efficient long-term solution,” Miller said. “It is a near-term solution that is very powerful, but at the long run, we need to be able to take and access two great big markets that exist.”

Those two markets include sustainable aviation fuel, which represents a 35 billion gallon per year market, according to the study. Marine fuel is more than twice as much.

A ‘massive opportunity’ for biofuels

The UN International Maritime Organization has a target of eliminating greenhouse gas emissions by roughly 2050. To get there, large cargo ships would need to transition from emission-heavy bunker fuel to cleaner options, which could include ethanol or biodiesel.

Groups like the International Chamber of Shipping and World Shipping Council have expressed support for the Net-Zero Framework. If passed, the global agreement would require ships weighing 5,000 tons or more to cut their emissions or pay fines. The proceeds would go into a fund to reward low-emission ships, support research and help developing countries.

Zoltán Szabó is secretary general for Climate Ethanol Alliance, which spans the US, Europe, Brazil and Asia. At the conference in Iowa, Szabó said the shipping companies are largely on board “as long as there is a level playing field.”

“They just want to have a stable regulatory environment,” Szabó said. “They have invested in their ships. They will invest in the upcoming technologies.”

Szabó emphasized the global agreement is a “massive opportunity” for renewable fuels produced in the U.S., especially ethanol. He said ethanol has a low carbon intensity score and would be cheaper than paying the cost of compliance.

Over 100 countries last October were set to take a final vote on the Net-Zero Framework when the U.S. threatened sanctions, visa restrictions and fees if they supported the measure.

Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy said in a joint statement:

“President Trump has made it clear that the United States will not accept any international environmental agreement that unduly or unfairly burdens the United States or harms the interests of the American people.”

The U.S., Russia and several other countries voted in favor of a motion to delay the vote until this fall. The motion narrowly passed with some countries absent or abstaining.

“We have only one task … to turn this opposition into at least a neutral position, but a supportive position would be even better,” Szabó said. READ MORE