Ethanol Blog

A group of United States senators has asked U.S. Secretary of Agriculture Tom Vilsack to provide relief to biofuels producers who have sustained economic losses from the COVID-19 shutdown in 2020.

"We have been advocating for targeted relief for the biofuels industry since last spring when we were first made aware of the demand collapse for ethanol and other renewable fuels due to the COVID-19 pandemic," the senators said in a letter to Vilsack on Monday.

"As you know, additional funding was added to the Commodity Credit Corporation by the Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act. However, the previous administration argued that congressional intent was not clear with regard to support for biofuels and did not use its discretionary authority to assist biofuels producers through available CCC funding."

In 2020, a large chunk of the ethanol industry either shut down or cut back production when the economy shutdown in response to the pandemic. As a result, the industry lost billions of dollars in revenue.

The letter is signed by Sens. Charles Grassley, R-Iowa; Joni Ernst, R-Iowa; Amy Klobuchar, D-Minn.; Richard Durbin, D-Ill.; John Thune R-S.D.; Tina Smith, D-Minn.; Deb Fischer, R-Neb.; Roger Marshall, R-Kan.; Mike Rounds, R-Mo.; and Mike Braun, R-Ind.

"As a result, we worked to ensure specific language was included in December's COVID relief bill that explicitly clarifies that USDA may provide direct payments to biofuels producers hard hit by the pandemic," the letter said.

"Providing aid to the ethanol industry would provide much-needed financial assistance for these key agriculture processors and help keep these critical markets open to farmers. It is for these reasons that we are supportive of the proposals the biofuels industry and key agricultural organizations have put forward to stabilize the market from last year's macroeconomic shock.

"As the Department prepares a proposal for providing assistance to the agriculture industry using CCC and other resources, we ask that you use this explicit authority to aid the nation's biofuels industry. Keeping biofuels plants open is vital to the states we represent."

Growth Energy Chief Executive Officer Emily Skor said producers across the country were hit hard by the pandemic.

"Biofuel producers, farmers, and others throughout the biofuels supply chain have been hit hard financially over the course of the pandemic and securing much-needed financial assistance would bring relief and certainty as they look ahead to a brighter year and build back what was lost," she said in a statement.

Geoff Cooper, president and chief executive officer of the Renewable Fuels Association, said the industry continues to experience the aftereffects of last year's difficulties.

"The U.S. ethanol industry has experienced billions of dollars in lost sales due to the COVID-19 pandemic, and at one point in 2020 more than half of the industry's production capacity was shut down," he said.

"A year after the initial collapse of the fuel market, ethanol production still remains well below pre-pandemic levels."

Kurt Kovarik, vice president, federal affairs at National Biodiesel Board, said, "Like all Americans and many other critical infrastructure industries, biodiesel and renewable diesel producers -- particularly small, innovative companies -- are facing unique, unanticipated challenges from the ongoing COVID-19 emergency."

Todd Neeley can be reached at todd.neeley@dtn.com

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