Noem, Walz urge Congress to provide COVID-19 relief for biofuels

By Erin Voegele | May 28, 2020

Representatives of the Governors Biofuels Coalition sent a letter to congressional leadership on May 28 urging direct support for renewable fuel producers in the fourth COVID-19 relief package that is currently making its way through Congress.

“While farmers continue to produce the livestock and grain necessary to feed and fuel the nation, processing facilities have closed or dramatically curtailed production,” wrote South Dakota Gov. Kristi Noem, chair of the Governors Biofuels Coalition, and Minnesota Gov. Tim Walz, vice chair of the group. “Stay-at-home orders across the country slashed gasoline consumption, causing demand for ethanol to plummet, forcing more than 50 percent of the states’ ethanol production to shut down.”

The letter notes that nearly three-fourths of the nation’s 204 ethanol plants are either idle or producing at significantly reduced rates, resulting in layoffs, lost markets for farm commodities and constrained supplies of ethanol coproducts, such as animal feed and carbon dioxide. Noem and Walz said that the ethanol industry currently estimates the pandemic will reduce in at least a $10 billion loss this year. “Rural America—with the ethanol industry’s 350,000 direct and indirect jobs—is facing an economic crisis of historic proportions,” they continued.

The letter discusses the Renewable Fuel Feedstock Reimbursement Act of 2020, which was introduced earlier this month by Sens. Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., and the Renewable Fuel Reimbursement Program provision included in the HEROES Act, a COVID-19 relief bill passed by the House on May 18.

“These proposals will allow important agricultural processing facilities to retain their employees, resume production when warranted by market and health conditions, and support farmers by increasing commodity demand,” Noem and Walz wrote. “In addition to producing ethanol, livestock and poultry feed, biodiesel feedstock, and captured carbon dioxide, ethanol producers have also stepped forward to help address the Covid-19 public health crisis. Many facilities are now producing the high-grade ethanol used in hand sanitizer. The states’ ethanol industry has become an irreplaceable contributor to our nation’s economy, and it must be preserved.”

The Renewable Fuels Association issued a statement thanking the Governors Biofuels Coalition for supporting COVID-19 relief for biofuel producers.

“We appreciate the efforts of Govs. Noem and Walz on behalf of an industry that helps fuel the rural economy in South Dakota, Minnesota, and other states across the nation,” said Geoff Cooper, president and CEO of the RFA. “These governors have seen first-hand how important ethanol and other renewable fuels are to their states, and they have witnessed the devastating impact the pandemic has had on ethanol plants and the communities they serve. We agree with the governors on the vital importance of ensuring Congress acts quickly to provide assistance to these businesses and the 350,000 men and women whose jobs are supported by the ethanol industry.” Currently, Cooper noted, fewer than 70 of 204 ethanol plants in the country are operating at full capacity, with nearly 60 facilities fully idled and capacity utilization at less than 60 percent.”

A full copy of the letter can be downloaded from the Governors Biofuels Coalition website.