Ethanol Blog

Biofuels producers would receive 45 cents per gallon for fuels produced between Jan. 1 and May 1, 2020, as part of a COVID-19 relief bill put forward by Democrats in the U.S. House of Representatives on Tuesday.

In addition, producers forced offline for one or more calendar months during this time would qualify for the same credit, based on half the volume produced during the corresponding month or months in 2019.

Based on data from the Energy Information Administration, about 4.6 billion gallons of ethanol have been produced since Jan. 1. This means ethanol producers would receive about $2.2 billion in relief.

Based on the generation of renewable identification numbers, or RINs, during the Jan. 1 to May 1 period for biodiesel and renewable diesel of about 675 million gallons, those industries would receive about $303.8 million in relief.

Ethanol and biodiesel producers have been hit hard by the economic shutdown from the virus as well as an oil-price war between Russia and Saudi Arabia. About 150 ethanol plants have either idled or slowed production.

The biofuels provision was inserted into the HEROES Act introduced by House Democrats.

The inclusion of the relief program comes after Reps. Cheri Bustos, Abby Finkenauer, Cindy Axne, Angie Craig, Dave Loebsack, Mark Pocan, Collin Peterson, Ron Kind, Lauren Underwood and Kendra Horn, made the request in a letter to House leadership on Monday.

"The renewable fuel reimbursement program represents a potential lifeline for the 350,000 men and women whose jobs depend on a healthy and vibrant ethanol industry," said Geoff Cooper, Renewable Fuels Association president and chief executive officer.

"When an ethanol plant shuts down or reduces production, it destabilizes the entire rural economy. Jobs are lost, farm commodity demand and prices plummet, supplies of vital co-products like distillers grains and captured CO2 evaporate, and the nation's drivers are denied lower-cost, cleaner-burning fuel options at the pump."

Growth Energy Chief Executive Officer Emily Skor said, "Over the course of this pandemic, half the biofuels industry was forced offline, sending shockwaves through the entire agricultural supply chain. The HEROES Act offers a sorely needed beacon of hope for biofuel workers, our farm partners, and thousands of rural communities struggling to stay afloat."

Specifically, the HEROES Act would authorize USDA to provide the per-gallon payment of ethanol produced from Jan. 1 through May 1, 2020.

In recent days, biofuels and agriculture groups, 70 mayors from towns and cities, as well as some Midwest governors have asked federal lawmakers for relief.

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

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