ACE: Administration must initiate plan to aid ethanol producers

By American Coalition for Ethanol | April 27, 2020

Today, the American Coalition for Ethanol CEO Brian Jennings requested President Trump demonstrate his leadership in support of America’s farmers and the renewable fuels industry by directing his Cabinet to provide a much-needed boost to ethanol producers and rural America in response to the mounting economic harm as a result of the sudden and severe drop in ethanol demand.

“More than half of U.S. ethanol production capacity is already offline, high-skill jobs are being shed, livestock and food processing customers are facing supply disruptions, and our members’ working capital is vanishing. Ethanol use could fall by more than 3 billion gallons in 2020, eliminating the market for at least a billion bushels of U.S. corn,” Jennings wrote in the letter. “As you did on April 21, when you directed the Secretaries of Energy and Treasury to formulate a plan to provide funds to the oil and gas industry, we urge similar action for our sector.”

Over the last month, ACE has written the Environmental Protection Agency (EPA) and the United States Department of Agriculture (USDA) urging them to use authorities within their discretion to quickly aid the ethanol industry.

“In our April 3 letter to Administrator Wheeler, we requested he use his existing statutory authority to ensure the 20.09 billion gallons of renewable fuel required by the Renewable Fuel Standard — and promised by EPA this year — will be consumed,” Jennings wrote. “COVID-19 exposed a shortcoming in the Agency’s rulemaking, and failure to increase the RFS this year will result in a waiver of promised gallons. In an April 16 Reuters article, a spokesperson said EPA ‘will make the appropriate determination at the appropriate time,’ but the Agency has not responded to our request. Every day EPA delays action is another day of economic catastrophe for renewable fuel producers.”

The letter continued, “Our April 13 letter to Secretary Perdue requested he utilize funding in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency assistance to ethanol producers. ACE supported congressional efforts to increase USDA funding for this effort, and many in Congress encouraged USDA to provide ethanol producers the aid. Unfortunately, USDA declined this much-needed assistance on April 17 citing a lack of funding.”

The letter concluded by affirming a more urgent response is needed and the Administration has tools at hand that can be deployed with sufficient political will. Access to the full letter is available here. ACE also encourages industry advocates to join ACE in requesting the Administration quickly establish a plan to aid ethanol producers struggling to survive the catastrophic economic fallout of COVID-19 by utilizing its Action Center.