Coronavirus damage tops $3.4 billion, says ethanol industry

Gasoline consumption fell precipitously in the spring due to stay-at-home orders and the economic slowdown, cutting ethanol industry revenue by more than $3.4 billion, said the Renewable Fuels Association on Wednesday. “The analysis again underscores the need for Congress to act expeditiously to deliver emergency relief to the renewable fuels industry,” said Geoff Cooper, the trade group’s president.

Ethanol consumption from March through June was 1.3 billion gallons lower than the average consumption during the same period for the past three years, calculated RFA economist Scott Richman. The amount of corn used for ethanol production was 467 million bushels below average for the period. “The low point occurred in April, when ethanol production and consumption fell more than 40 percent compared to the same month over the last few years,” said the RFA analysis.

“To date, industry revenues have been reduced by over $3.4 billion. The negative effects are expected to continue through the remainder of 2020 and into 2021, even if the pandemic does not intensify and government restrictions such as those seen this spring are not reimposed.”

The House passed a coronavirus relief bill in May that offered $2.5 billion in assistance to ethanol producers. Payments would be 45 cents a gallon for production from Jan. 1 to May 1 for plants that stayed in operation. Idled plants would receive payments of 22.5 cents per gallon based on their production during the same period in 2019. Other remedies have been proposed in freestanding bills.