The federal mandate to mix corn ethanol into gasoline has plateaued at 15 billion gallons a year, so ethanol distillers are looking for other markets and throttling back on production, says Reuters. Three companies — ethanol industry leader Archer-Daniels-Midland, Green Plains Inc. and Pacific Ethanol — are turning to industrial and beverage alcohol production, an avenue open to them because ethanol is grain alcohol.
“The shifts are the latest moves by the once-booming corn-ethanol sector that has struggled with thin margins for the past two years amid industry overcapacity,” said Reuters. The Energy Department says U.S. ethanol stocks were a record 23.7 million (42-gallon) barrels in April.
ADM said it was configuring its corn “dry” mill in Peoria to yield more industrial and beverage alcohol, while looking to export ethanol fuel. Green Plains reduced ethanol production at nine plants this spring and said it would convert a plant in York, Neb., to industrial alcohol and eventually upgrade it to beverage alcohol, said Reuters. Pacific Ethanol announced in June that it was buying a beverage-grade plant in Illinois, a diversification from motor fuel.