Censky: US ethanol industry has a friend in USDA

By Matt Thompson | February 13, 2019

United States Deputy Secretary of Agriculture Stephen Censky spoke at the Renewable Fuels Association’s National Ethanol Conference, and told attendees that USDA is a strong advocate for the U.S. ethanol industry, both at home and abroad.

“My message is that you have very strong advocates in [Secretary of Agriculture Sonny Perdue], myself, all of us really at USDA that are working on your behalf, as well as in President Trump, who also has been a strong supporter, as you well know, of U.S. corn farmers and the U.S. ethanol industry,” he said.

Censky acknowledged the uncertainty within the industry around regulations, but also highlighted some potential bright spots for the industry.

Mexico, he said, is poised to become a market for U.S. ethanol. He said the USDA has been working with Mexico in recent years, “and we’ve had some successes, and we’re very hopeful that we’ve been able to revise and push to get them to change some of their rules so that if Mexico, as they move forward, hopefully will be allowing the use of ethanol, E10 nationwide within Mexico,” he said. “And to do that, that would mean a huge win for the industry.” He added that USDA estimates the Mexican market would be about 1.2 billion gallons.

Censky also spoke about trade with China, calling it “the 500-pound gorilla” affecting trade. He noted the USDA has a delegation in China this week, working with the government to resolve the trade issues. He said the priorities are to remove barriers to trading dairy, poultry and other ag commodities with the country, ending the country’s theft of intellectual property, and removing tariffs that are hurting the ethanol industry. “Even while we’re working there in China, obviously on the list of things as well, is the removal of the retaliatory duty that’s brought U.S. ethanol exports to China to a standstill,” he said.

However, Censky noted that China has potential to once again become a market for ethanol exports. “China has announced a goal to try to have E10 by 2020,” he said. “That’s a pretty lofty goal to try to achieve that, but we want to make sure that as China is looking to implement their E10, whether or they achieve that by 2020 or sometime in the future, that again, U.S. ethanol exports have a chance to compete in that market.” He added that talks with Japan to establish a free trade agreement in the coming months, as well as an expanded ethanol market in the country.

“We also have had some success just this last year, of working with Japan to have expanded access for ethanol,” Censky said. “ETBE is now allowed to go into that market. Previously it was all plain Brazilian sugar cane-based ethanol ETBE that was allowed to go into market. We think that’s around $170 million market. 100 million gallons or so, and again, that’s a great success and I think that’s great for the industry."

Censky also spoke of USDA’s support of domestic policy to help grow markets at home. He said USDA is an advocate for year-round E15 sales, and indicated EPA is still determined to complete its rule-making process prior to the summer driving season. However, if that doesn’t happen, he said other measures need to be in place. “We’ve been pushing obviously for that to get done, make sure we get it done in time,” he said. “And in the absence of that, if it looks like we aren’t going to get that, then I think we’re going to have to take a look and consider something else in making sure that there is enforcement that’s announced by EPA so that retailers in the industry can plan and know that they can continue to sell E15, even while the rule is being finalized.