CropEnergies may mothball ethanol production

In Germany, CropEnergies is continuously assessing the capacity utilisation of all its renewable ethanol production plants. Given the multiplication in energy and power prices in combination with continuously high raw material prices, the pressure on the cost side is increasing. Particularly from January 2023 onwards, CropEnergies can only to a declining extend benefit from hedging positions entered before energy and power prices sky-rocketed. So far, increased costs could be offset by higher ethanol sales prices. Recently, however, ethanol sales prices have decreased significantly as an increasing volume of imports particularly from Brazil and the USA, which benefit from comparably much lower energy and raw material prices, have entered the EU and UK markets.

Against this background, CropEnergies will continue to carefully evaluate whether it will be possible to maintain the current capacity utilization of its plants from January 2023 onwards. The particular focus will be on the Ensus plant in Wilton, UK, as increased prices for natural gas and power are putting severe pressure on this plant’s profitability. The plant has an annual production capacity of 400,000 cubic meters renewable ethanol, 350,000 metric tons of dried animal feed and up to 250,000 tons of biogenic CO2. Within the coming weeks, management will closely monitor the energy, grain and ethanol markets and decide whether capacity adjustments or even a temporary shutdown of individual plants will be necessary. At the same time, CropEnergies calls on politicians to support companies with energy-intense production and to ensure a level playing field on the European ethanol market.