Ethanol makers have idled 41 plants because the coronavirus pandemic is slashing demand for biofuels. A pro-ethanol trade group said on Tuesday, “At this rate, nearly half of America’s biofuel production could soon be offline.” Farm-state senators said the USDA should use coronavirus relief funds to bolster ethanol makers and, indirectly, the corn growers who produce their feedstock.
Up to 40 percent of the U.S. corn crop is used in making ethanol. If ethanol production were cut in half for a year, it would eliminate a market for 2.4-2.7 billion bushels of corn, said the trade group Growth Energy. “Biofuel producers and our farm partners are confronting an economic crisis beyond anything rural America has seen before,” said Growth Energy chief executive Emily Skor.
POET, the largest biofuel producer in the world with 28 plants in seven states, said it would reduce production by 330 million gallons at four plants. The company said it already “significantly slowed” production at other plants.
Nationwide, 41 plants with an annual capacity of 3.2 billion gallons are shut down and output has been reduced by a combined 1.8 billion gallons at 66 other plants because of the coronavirus, said the Renewable Fuels Association. An additional 13 plants with 800 million gallons a year of capacity were idled before the pandemic hit. Together, the plants account for more than one-third of production capacity for the ethanol industry of 17 billion gallons a year.
In a letter, 15 senators, including the No. 2 Republican and Democratic leaders, asked to Agriculture Secretary Sonny Perdue to assist the biofuel industry. “We are supports of the proposals the biofuel industry has put forward to reimburse feedstocks and also believe that adding additional (USDA) funds to the Higher-Blends Infrastructure Incentive Program will drive future biofuel demand.” The slump in ethanol — and corn — demand will hurt farmers, ethanol makers and the rural communities that are home to ethanol plants, they said.
The United States has a large corn stockpile, with 1.9 billion bushels — a seven-week supply — forecast on hand when this year’s crop is ready for harvest in late summer. The new crop could be the largest ever harvested if farmers follow through on plans to plant 97 millions of land to corn this spring.