No. 279, June 8, 2023

TOP STORY

Growth Energy members meet with Senator Mike Rounds (R-South Dakota, third from right).

Growth Energy members meet with Rep. Pete Stauber (R-Minnesota, third from right).

Growth Energy members meet with Rep. Mark Pocan (R-Wisconsin, third from left).

Growth Energy members meet with Rep. Jim Baird (R-Indiana, seated).

This week, two dozen Growth Energy members joined us in Washington to meet with over 50 Members of Congress. This week's meetings with the Colorado, Illinois, Indiana, Ohio, Michigan, Minnesota, South Dakota, and Wisconsin delegations consisted of conversations surrounding the status of year-round E15, biofuel priorities in the 2023 farm bill, and the importance of protecting the biofuels tax credits that were signed into law last year in the Inflation Reduction Act. Our teams met with both champions and members new to our issues to share our story and amplify the benefits of biofuels in the halls of Congress.

For more information, please contact Vice President of Government Affairs John Fuher. 

EIA WEEKLY ETHANOL DATA

Last week, domestic ethanol demand was 14.4 BGY, up 1.3% compared to a week ago. The EIA-reported gas demand was up 1.3% from last week, at 141.3 BGY.  The 4-week average ethanol and gas demand are 14.3 and 140.5 BGY. Last week’s demand reflects the additional demand associated with the Memorial Day long weekend.

Ethanol production was 15.9 BGY last week, up 3.2% versus the week before, and 2.4% less than the 4-week average in 2019. Midwest production was up 3.4% (+9.4 MG) versus a week ago, and average production in the other regions was unchanged. Capacity utilization of plants online was 91.7% overall, 92.8% in the Midwest, and 75.3% on average, elsewhere, excluding 1,425 MGY of capacity shutdown at 28 ethanol plants for other than maintenance. On an installed capacity basis, utilization was 86.0% overall, 90.5% in the Midwest and 45.7% in the other regions.

Exports were an estimated 27.6 MG last week based on 120 MG of exports forecast for May and 130 MG forecast for June. The EIA reported no ethanol imports last week.

Overall inventory was down 2.9 MG last week. EIA-counted stocks increased 25.9 MG, and regional changes were: East (-6 MG), Gulf (+26 MG) and West (+3 MG) Coasts and the Midwest (+3 MG). In-transit inventory decreased 28.7 MG.

Based on the total inventory of 1,752 MG on June 2nd and the 4-week avg. domestic demand, there were 45.0 days of supply, down 0.2 days versus a week ago. Including the 4-week avg. of net exports, there were 41.0 days of supply, down 0.1 days versus a week ago.

Based on US Census data, 1.3 MG of fuel ethanol were imported in April, with none from Brazil and all from Canada. Year-to-date, imports have totaled 4.3 MG.   In April, there were 7.9 ethanol imports reported industrial use from Brazil that we believe were for ETBE production and then for re-export to Japan.

Ethanol exports in April were 130.9 MG, including an estimated 5.7 MG used to make ETBE exported to Japan (assuming 44% of ETBE exports were derived from U.S. corn ethanol). The major export destinations were Canada (47 MG), India (13 MG), The Netherlands (15 MG), South Korea (11 MG), and the United Kingdom (10 MG). The total to Europe (EU + UK) was 27 MG. There was none to China, or Brazil.

For more information, please contact Vice President of Market Development Jake Comer.

WORKING FOR YOU

UPCOMING EVENTS

Fuel Ethanol Workshop (FEW)

Omaha, NE

June 12-14, 2023

Growth Energy Biofuels Summit

Washington, DC

September 11-14, 2023

IN GOVERNMENT AFFAIRS

Growth Energy CEO Emily Skor joined Congresswoman Ashley Hinson (R-IA) this week for a Facebook Live discussion on the economic and environmental benefits of year-round E15, as well as the importance of Iowa's role in biofuels.

What happened this week: A bipartisan group of 21 members of the U.S. House of Representatives, led by Rep. Darin LaHood (R-Ill.), sent a letter to U.S. Trade Representative Katherine Tai urging her to protect U.S. farmers and biofuel producers and prioritize U.S. ethanol export competitiveness in the Brazilian market by addressing current unfair trade practices.

Why the letter was necessary: Currently, Brazil has a 16 percent tariff on American ethanol. Before this tariff was reinstated earlier this year, American exports of ethanol to Brazil had received duty-free treatment since March 2022. 

Additionally, there are non-tariff barriers that further complicate our bilateral ethanol trade with Brazil. Brazilian ethanol producers have access to our Renewable Fuels Standard and California’s Low Carbon Fuel Standard program.This treatment is not reciprocated by Brazil, where U.S. ethanol producers, after two years, have yet to be approved for Brazil’s biofuel program, RenovaBio. 

What Growth Energy says: We were pleased to work with Rep. LaHood's office on a letter that reflects the need to address this trade imbalance.

“We’re grateful to Rep. LaHood and all cosigners of the letter to Ambassador Tai for raising the concerning dual challenges that American ethanol producers face in Brazil while Brazilian ethanol exports receive duty-free treatment here in the U.S. Growth in the international export market is essential to the strength of American ethanol and our nation’s ag economy. We look forward to working with these Members and Ambassador Tai to ensure a level trade playing field.” 

For more information, please contact Vice President of Government Affairs John Fuher.

IN REGULATORY AFFAIRS 

In California, the recent California Air Resources Board (CARB) workshop on a proposed Auto-Accelerating mechanism (the “ratchet”) of the Low Carbon Fuel Standard (LCFS) targets provided the opportunity for input from stakeholders. Growth Energy has previously submitted extensive comments demonstrating the vital role low carbon biofuels and higher biofuel blends can play in meeting California’s ambitious climate goals. As we have noted previously and reiterate here in our most recent comments, biofuels have been among the largest contributors to the success of the LCFS program to date and are poised to continue to do so with appropriate updates to the program.

We strongly support and encourage the Board to update emission factors and lifecycle modeling to reflect the latest science, data, and information to appropriately capture the latest innovation in the biofuels industry. The Board should also recognize the benefits of low carbon farm practices and how they can be driven by policies like the LCFS.

Read more here. 

Last week, Nebraska Gov. Jim Pillen signed the Adopt the E15 Access Standard Act into law. 

Thank you to Governor Pillen, Senator Myron Dorn, and our supporters in the Nebraska legislature for advocating for expanded access to E15 in the state!

Growth Energy applauded legislation signed yesterday by Illinois Governor J.B. Pritzker that will reduce sales taxes paid on higher blends of ethanol. The tax incentives were authored by state Senator Joyce (D-Essex) and included in a broader revenue package approved by lawmakers this May. The new law also makes technical changes to clarify requirements for a recently adopted tax credit for sustainable aviation fuel. Learn more about the bill and read our full statement here.

For more information, please contact Senior Vice President of Regulatory Affairs Chris Bliley.

IN OUR ASSOCIATION

Jeff Broin, founding member of Growth Energy and Founder and CEO of POET, was featured in CEO Magazine this month. In the feature, Broin shares his story of growth and perseverance and looks toward the future of biofuels.

“The agricultural potential of the world is virtually untapped,” said Broin. “Today, we have the technology to ramp up production of bioethanol and co-products using existing cropland around the world. That’s exciting.”

"There is no reason to fear the future if you understand the opportunity agriculture holds for the planet." 

Read more about his passion and leadership, as well as his vision for POET's future below.

Adkins Energy General Manager Bill Howell (L) and Growth Energy
State Government Affairs Director Dallas Gerber at Adkins' 20th Anniversary Celebration

Adkins Energy, a Growth Energy producer plant member, recently observed its 20th anniversary with an open house at their biorefinery in Lena, Ill. Growth Energy attended the celebration along to congratulate the company on its distinguished record of growth and innovation in the biofuels industry. 

Separately, Adkins recently announced this week that it had joined forces with CapCO2 Solutions to build the first facility to convert ethanol plant waste CO2 to Green Methanol. This will add a significant new revenue source and a significant step forward in decarbonizing the ethanol industry. Green methanol is highly valuable, emerging as an essential fuel for decarbonizing both the shipping industry and a wide variety of commercial chemicals and consumer products. Adkins Energy is leading the way for the ethanol industry, demonstrating how best to leverage their CO2 for the next generation of the ethanol industry. By generating local revenues without disruption of agricultural land or eminent domain, green methanol is an exciting alternative to the widely discussed CO2 pipelines.

“I am delighted that Adkins has an opportunity to lead the industry to its next major product,” said Adkins CEO William Howell. “Adkins has grown by focusing on how ethanol and its byproducts can lead the industry and support the farmers that grow our grain and the communities around our plant. Green methanol is the next step in that growth and leadership.”

“This collaboration demonstrates that attacking climate problems can simultaneously grow businesses, support agriculture, and support local communities,” said CapCO2 Solutions CEO, Jeff Bonar. 

Growth Energy will be attending the 39th Annual International Fuel Ethanol Workshop & Expo in Omaha, Neb. next week. After the keynote, we'll hear from Senior Vice President of Regulatory Affairs Chris Bliley. He’ll join other association leaders for a deep dive on legislative and regulatory efforts to lift barriers to higher-octane bioethanol blends and expand the role of biofuels across the entire transportation sector — on the ground and in the air. He will also discuss the role of climate policy in driving demand for the low-carbon liquid fuels needed for a net-zero future. 

Find us at Booth #1121!

For more information or to submit stories for your own member spotlight, please contact Vice President of Development Kelly Manning.

IN MARKET DEVELOPMENT

Mike Lorenz, Growth Energy Senior Vice President of Market Development, is in Japan attending the USDA Agribusiness Trade Mission. He will be meeting with the Ministry of Economy, Trade, and Industry (METI) to discuss direct blending of ethanol. U.S ethanol was limited to 66% of ETBE production, currently Japan’s oxygenate of choice. However, METI recently lowered the CI of score of U.S. ethanol effective April 1 allowing it to now compete for up to a 100% of ETBE production. While in Japan, Mike will also meet with other government officials, Idemitsu, Sumitomo, Toyota, and Nakagawa Bussan.   

Are you a U.S. ethanol producer, feedstock supplier, or farmer leader looking to gain access to the Brazilian market or need to know more about the pathway to RenovaBio Certification?

Join the U.S. Grains Council’s virtual certification workshop on Tuesday, June 13th, 2023, where you will learn more about market access requirements; certification avenues; ethanol market dynamics in the region; pricing opportunities and more.

The RenovaBio program was launched in 2019 as Brazil's national biofuels policy. Its purpose is to acknowledge the significance of biofuels in the country's energy matrix and aid in reducing GHG emissions by regulating biofuel production, commercialization, and utilization.

Hear directly from Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) officials in charge of program implementation and sign up for individual plant consultations on a first come, first serve basis.

To register for the certification workshop, please use this link:

https://us02web.zoom.us/webinar/register/WN_9QU2rSccSEG0xYB8lnV3hw

Should you have additional questions or need clarification, please contact USGC Director of Global Ethanol Market Development Mackenzie Boubin at mboubin@grains.org.

For more information, please contact Senior Vice President of Market Development Mike Lorenz.

The Weekly Rundown is the weekly newsletter for Growth Energy's members. It is published weekly by the communications staff at Growth Energy. For more information, email team@growthenergy.org or visit our website GrowthEnergy.org. 

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