'The Worst May Be behind Us': U.S. Ethanol Industry Says Inching Back from Collapse

May 18, 2020

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Stephanie Kelly (Reuters) The U.S. ethanol industry is showing some signs of recovery as government officials ease stay-at-home orders that depressed fuel demand, while a vote Friday in Congress could bring the industry one step closer to federal aid, industry officials said.

Fuel demand collapsed by about a third with the spread of the novel coronavirus this spring, and U.S. ethanol production capacity halved as around 150 facilities either idled or reduced rates. Now as restrictions ease and gasoline demand inches higher, about 140 facilities are idled or running at reduced rates, Renewable Fuels Association President Geoff Cooper said on Friday.

“It seems the worst may be behind us,” Cooper said in a call with reporters. “But make no mistake, we still have a very long way to go to climb out of the hole that COVID-19 put us in.”

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Output is still down more than 40% from year-ago levels, though.

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The increased production comes as Congress readies a vote on Friday for a coronavirus relief bill that includes aid for the biofuels industry. After assistance to the industry failed to make its way into the first relief package from Congress, advocates hope that the new bill will pass the House of Representatives on Friday before moving on to the Senate.

The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from Jan. 1 through May 1. READ MORE

RFA’S COOPER IS CONFIDENT BIOFUELS ASSISTANCE WILL HAPPEN (Brownfield Ag News; includes AUDIO)

RFA: Fuel demand begins recovery, poll finds support for biofuel (Ethanol Producer Magazine)

Ethanol plants creep back online, but hand sanitizer challenges remain (Agri-Pulse)

BIOFUELS PRODUCERS SAY TRUMP COULD DO MORE TO HELP: (Washington Examiner's Daily On Energy)

RFA CEO Says Worst May be Over for Ethanol Industry (Energy.AgWired.com)

Worst may be over, says ethanol leader (Fern's Ag Insider)

US Renewable Fuels Association officials see post-pandemic path for ethanol (S&P Global Platts)

Worst may be over but 'very long way to go,' ethanol producers say (Seeking Alpha)

ETHANOL PRODUCTION SHOWS SLIGHT REBOUND, TIGHTER STOCKS (News Dakota)

Excerpt from Agri-Pulse:Some ethanol plants are slowly coming back online as gasoline demand grows, but FDA guidelines continue to make it difficult for facilities to produce alcohol for hand sanitizer, industry leaders say.

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As of Thursday, 56 out of the nation's 204 ethanol plants were running at full capacity. About 81 plants were running at a reduced rate, while 67 were fully idled (52 of those facilities have stalled since March 1). Overall plant capacity is at 53.3% representing a volume capacity of 9.2 billion gallons, according to RFA.

The number of plants running at full capacity is up slightly from 49 as of May 6, according to RFA numbers.

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Tim Winters, president and CEO of Western New York Energy, said producers would like to see ethanol demand levels rise but the industry already faces high levels of ethanol stocks.

The record ethanol stock levels have led his company to produce hand sanitizer, but Winters argues FDA is still not being clear on regulatory specifications.

“The lack of clarity from the FDA has created such ripples in the market for sanitizers that there are people that just don’t know what they want to do,” Winters said.

Guidelines issued by FDA on March 27 said ethanol plants did not have to meet U.S. Parmacopedia and Food Chemical Codex guidelines, but the agency reversed its stance two weeks later.

Cooper, Koehler, and Winters want FDA to take Canada’s temporary approach on relaxing regulations for ethanol plants producing hand sanitizer. On Thursday, RFA sent a letter to FDA Commissioner Stephen Hahn urging the agency to follow Canada’s approach. READ MORE