RFA says ethanol industry needs support as COVID-19 losses near $4B

December 13, 2020 |

In Washington, D.C., the Renewable Fuels Association said that with COVID-19 cases on the rise again and related actions, consumption of ethanol-blended gasoline is rapidly falling again, threatening to derail an already tenuous economic recovery in the ethanol industry, with U.S. ethanol producers already losing $3.8 billion since the start of the pandemic.

Through November, U.S. ethanol producers had already lost $3.8 billion since the start of the pandemic, according to a new analysis released today by the Renewable Fuels Association. In response to reduced travel and lower fuel demand, ethanol producers slashed production by 2 billion gallons between March and November, and cuts are expected to continue for months to come.

In the first week of December, consumption of both gasoline and ethanol fell to their lowest points since May, according to data from the Energy Information Administration.

“As Congress debates another COVID-19 relief package, we implore policymakers to consider the devastating economic impact the pandemic has had on renewable fuel producers,” said RFA President and CEO Geoff Cooper. “Our new analysis provides an in-depth look at how rural communities have suffered. The decrease in ethanol production has idled or permanently closed plants across the heartland and caused job losses in rural communities where good employment is often hard to find. As an industry deemed critical and essential to America, we call on Congress to act swiftly to provide some targeted relief to our nation’s renewable fuels industry.”

Cooper pointed out that U.S. ethanol plants are also playing a crucial role in combatting the pandemic by producing high-purity alcohol for hand sanitizer and other disinfectants, as well as capturing the CO2 needed to make the dry ice required for distributing COVID-19 vaccines. “But ethanol plants can’t help in the fight against COVID if they can’t keep their doors open,” Cooper warned.

According to RFA Chief Economist Scott Richman, who authored the white paper, the 2-billion-gallon cut in ethanol production meant a significant 700-million-bushel decline in the use of corn for ethanol. He stressed that while this report looks at a one time period, the effects of the pandemic will continue for a long time to come.

Category: Fuels

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