TOP STORY

Last week, the U.S. Treasury Department issued its guidance on eligibility for the Sustainable Aviation Fuel (SAF) tax credit enacted in Section 40B of the Inflation Reduction Act (IRA).

“In an important first step, the Biden administration has recognized the merits of using the GREET model in its guidance for eligibility in the 40B Sustainable Aviation Fuel (SAF) tax credit," said Growth Energy CEO Emily Skor in a statement. "America’s biofuel producers and their farm partners continue to innovate with myriad technologies that are further reducing the carbon intensity of low-carbon bioethanol, and we are ready to lead the aviation sector into a lower-carbon future. This guidance signals our potential ability to participate in the SAF market."

While the announcement was generally positive, it also left many questions unanswered, and now the bioethanol industry must wait until unspecified updates are made to the GREET model by March 1, 2024 before it knows just how much it will be able to take advantage of 40B. “New investments in SAF are highly dependent on the pending GREET modeling updates, however, and the industry needs more clarity around the proposed changes before we have certainty around market access," Skor added. "Under this guidance, SAF produced from other biofuels including Brazilian cane bioethanol qualifies for the 40B tax credit, but the path for American-made corn-based bioethanol remains unclear. U.S. tax policy shouldn’t advantage foreign firms over domestic ones."

On the day the guidance was issued (Dec. 15, 2023), The Washington Post ran a news article on the topic and described the important role U.S. farmers will play in decarbonizing air travel. However, the article also made claims attributing increased land use, displaced food crops, and increased emissions to American-made bioethanol--claims that have already been repeatedly debunked by agency research. Skor submitted a letter to the editor in response, which The Washington Post ran on Dec. 19.

"All that U.S. farmers and biofuel producers are asking for is the chance to compete in the sustainable aviation fuel market and to contribute to a lower-carbon economy," Skor said in her letter. "Dismissing the science on bioethanol’s environmental benefits makes it more likely that the sustainable aviation fuel market will fail to take flight, increasing our reliance on fossil fuels to power aviation."

Read Growth Energy's full statement on the Section 40B guidance here. Read Skor's full letter to the Washington Post editor here.

For more information, please contact Vice President of Communications Elizabeth Funderburk.

WEEKLY EIA DATA

Last week, domestic ethanol demand was 13.7 BGY, down 1.2% compared to a week ago. The EIA-reported gas demand was down 1.2% from last week, at 134.2 BGY. The 4-week average ethanol and gas demand are 13.4 and 131.4 BGY (+1.9% YoY). 

Ethanol production was 16.4 BGY last week, down 0.3% versus the week before, and 0.7% more than the 4-week average in 2019. Midwest production was down 0.5% (-1.5 MG) versus a week ago, and average production in the other regions was up 3.3% (+0.6 MG). Capacity utilization of plants online was 93.0% overall, 93.7% in the Midwest, and 84.2% on average, elsewhere, excluding 1,197 MGY of capacity shutdown at 25 ethanol plants for other than maintenance. On an installed capacity basis, utilization was 87.1% overall, 91.2% in the Midwest and 50.4% in the other regions. 

Exports were an estimated 27.1 MG last week based on 120 MG/mo. of exports forecast for December. The EIA reported no ethanol imports last week.

Overall inventory was up 21.8 MG last week. EIA-counted stocks increased 33.9 MG, and regional changes were: East (+10 MG), Gulf (+21 MG) and West (-1 MG) Coasts and the Midwest (+3 MG). In-transit inventory decreased 12.1 MG.

Based on the total inventory of 1,776 MG on December 15th and the 4-week avg. domestic demand, there were 47.6 days of supply, up 0.3 days versus a week ago. Including the 4-week avg. of net exports, there were 43.0 days of supply, up 0.3 days versus a week ago.

For more information, please contact Jake Comer.

WORKING FOR YOU

UPCOMING EVENTS

IRFA Summit

Altoona, Iowa

January 11, 2024

2024 Growth Energy Executive Leadership Conference

Marco Island, Fla.

January 31- February 4, 2024

IN REGULATORY AFFAIRS

On Monday, U.S. Customs and Border Protection (CBP) closed two rail bridges at Eagle Pass and El Paso, Texas due to increased smuggling concerns. The CBP’s statement on the suspension of rail service can be found here. The closure of the rail crossings is rippling back into the U.S. supply chain and having negative impacts on the U.S. economy, including the bioethanol industry.

Since Monday, Growth Energy joined 45 other members of the Ag Transportation Working Group to send a letter to Homeland Security Secretary Alejandro Mayorkas calling on CBP to allocate staff to the international rail crossings in order to allow products, including bioethanol coproducts like distiller dried grains with solubles (DDGS), to resume flowing between the U.S. and Mexico.

“For agriculture, nearly two-thirds of all U.S. agricultural exports to Mexico move via rail,” wrote the coalition. “It was our second largest export market in 2022 with $28.5 billion in sales, and this year exports to Mexico have been a bright spot in a relatively down year overall for U.S. agricultural exports. Unfortunately, the crossing closures are causing exports to be lost. Each day the crossings are closed we estimate almost 1 million bushels of grain exports are potentially lost along with export potential for many other agricultural products.”

This week Growth Energy has also issued its own statement, while directly reaching out to CBP and the U.S. Department of Agriculture (USDA) and working with champions on Capitol Hill to amplify these concerns. We will continue to monitor the situation until it is resolved.

The U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM) announced last week the third opening of a five-year $2.25-billion funding opportunity available through President Biden’s Investing in America agenda to support the transport and permanent storage of carbon dioxide (CO2) captured from industrial and power generation facilities. Large-scale deployment of carbon management technologies provides new economic opportunities to local communities across the country, and it is crucial to achieving the Administration’s ambitious climate goal of a net-zero emissions economy by 2050.

“As we continue to reopen this funding opportunity, we are characterizing new regional storage facilities, helping to ensure we have adequate support for carbon capture and removal across our nation to help meet President Biden’s net-zero goals,” said Brad Crabtree, Assistant Secretary of FECM.

Projects selected will develop new and expanded carbon storage projects through FECM’s CarbonSAFE Initiative, each with the capacity to store 50 or more million metric tons of CO2 over a 30-year period. 

Read the full announcement here. All questions must be submitted through FedConnect; register here for an account. The next application deadline is February 20, 2024 at 5:00 p.m. ET.

The U.S. Department of Energy (DOE) Bioenergy Technologies Office (BETO) announced a notice of intent to issue a funding opportunity announcement that will drive the research and development of low-carbon, purpose-grown energy crops leading to the deployment of clean energy technologies. The planned Regional Resource Hubs for Purpose-Grown Energy Crops funding opportunity would support the development of a domestic supply chain of alternative sources of carbon that is critical to decarbonizing the U.S. transportation and industrial sectors, as well as related sectors of the economy such as the agriculture and power sector.

By demonstrating the long-term yield and sustainability of purpose-grown energy crops that advance feedstock development and production of biofuels and bioproducts, this funding aligns with both the U.S. National Blueprint for Transportation Decarbonization and the 2050 sustainable aviation fuel (SAF) production targets of the SAF Grand Challenge. Potential funded projects would also support the Clean Fuels and Products Shot, the seventh in DOE’s Energy Earthshot portfolio, which is focused on decarbonizing the fuel and chemical industry to advance cost-effective technologies with a minimum of 85% lower greenhouse gas emissions by 2035.

The funding opportunity is expected to be announced in January 2024 and could include up to $29 million in funding to achieve the above outcomes. Applicants selected for funding will become members of the Regional Biomass Resource Hub (RBRH) Initiative, working together to coordinate and share experimental plans, report data, and collectively achieve the funding objectives.

Visit BETO's Regional Resource Hub NOI page for more detailed information. 

The California Air Resources Board (CARB) released its proposed changes to the state’s Low Carbon Fuel Standard (LCFS), which will tighten the LCFS’s compliance curve from a 20% to a 30% reduction in the state’s transportation fuel carbon intensity (CI) by 2030 and from 85% to 90% reduction by 2045.

The proposal’s impact on biofuels is mixed. Among the changes of concern is a new sustainability requirement for crop-based and forestry-based biofuels in which those obligated will be required to track the “feedstocks to their point of origin and require independent feedstock certification to ensure feedstocks are not contributing to impacts on other carbon stocks like forests.” CARB’s proposal also requires that these same feedstocks must not be from “land that was forested after January 1, 2008.”

While the sustainability requirement presents additional reporting challenges, one positive proposal is the elimination of intrastate jet fuel’s exemption from the LCFS beginning in 2028, clearing the way for the use of more SAF in California.

The proposal’s written public comment period will open on January 5, 2024, at which point Growth Energy will be providing extensive comments. Despite the new sustainability requirements, CARB gives credence to biofuels’ role in reducing the state’s greenhouse gas (GHG) emissions. We will continue to highlight bioethanol’s history of GHG reductions and its future ability to provide even further reductions in the state’s legacy automotive fleet.

The Washington state Department of Ecology has also announced that they’ll be updating their state’s Clean Fuel Standard and will be considering a number of changes, several focused on incentivizing the use of sustainable aviation fuel (SAF), book and claim accounting for electricity and biomethane, and other items. Ecology will not be considering changes to the standards themselves, the WA-GREET model, or land use factors. 

Further information on Washington’s announcement can be found here: WAC 173-424 - Washington State Department of Ecology and further information is to follow in 2024.

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

IN GOVERNMENT AFFAIRS

Growth Energy CEO Emily Skor issued the following statement after the U.S. Environmental Protection Agency (EPA) advanced to the White House Office of Management and Budget (OMB) a rule that would grant the request of several Midwestern governors and allow them to sell E15–a fuel blend made with 15% bioethanol that can be used in 96% of cars on the road today–all year long in their states.

“This is a welcome step forward for farmers and drivers across the Midwest. We’re grateful to the governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin for pressing for uninterrupted access to low-cost, low-carbon E15, and we’ll continue to call on EPA and the White House OMB to grant year-round E15 nationwide. Biofuels like E15 are a critical part of reaching our climate goals, and we urge President Biden to swiftly approve the expanded sale of E15.”

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

IN OUR ASSOCIATION

Gov. Ron DeSantis (Center right) visits the POET plant in Menlo, Iowa.

Florida Governor and 2024 Republican Presidential Candidate Ron DeSantis went on a tour of our member POET's ethanol plant in Menlo, Iowa this week. Local farmers and biofuel workers from POET joined the Governor for a wide-ranging discussion on the importance of biofuels for reducing gas prices, supporting farm families, and strengthening America’s energy security.

ICM, Inc., a Growth Energy member, announced this week that a recent adopter of the Advanced Processing Package™ (APP™) technology system has met or exceeded guarantees for high-protein production, oil yield, and natural gas reduction.

ICM installed their APP™ system at Lincolnland Agri-Energy, a biorefinery based in eastern Illinois, back in August has been producing high-protein feed with the APP™ since August. 

“We’re excited to see them stake bigger and broader claims in the market, and we’ll be there to support them. This project demonstrates our longstanding commitment to help ethanol producers do more than they ever thought possible,” said Tom Ranallo, vice president of operations at ICM.

The APP™ separates corn into clean piles of fiber, oil, solubles, protein, and enhanced protein with yeast. Lincolnland uses the components to create animal feed with a protein content of 50% or more. The feed product offers nutritional benefits for a range of animal species, including cattle, chickens, swine, fish, and pets.

With the APP™, Lincolnland can produce up to 5.5 pounds of high-protein feed per bushel of corn. The company shipped its first high-protein product in August, and it has sold for a premium over traditional DDGS.

For more information, please contact Vice President of Development Kelly Manning.

Growth Energy will be taking a break for the holidays, with the office closing the week of December 25 - 29. The Daily Fill-Up (your daily newsletter of media clips) will go dark after tomorrow (Friday, December 22) and return to its normal schedule on Tuesday, January 2, 2024. The next issue of The Rundown will follow on January 4. On behalf of the entire team, have a very merry Christmas and we'll see you in the New Year!

Growth Energy is the leading voice of America’s biofuel industry, delivering a new generation of plant-based energy and climate solutions.

701 8th St NW, Suite 450
Washington, DC 20001

The 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. 

You're receiving this newsletter because you've subscribed to Growth Energy's The Rundown. Not interested anymore? Unsubscribe instantly.

Copyright ©2024-02-20 Growth Energy