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The Growth Energy team hosted an exclusive member webinar earlier this week, diving deep into the details of the U.S. Treasury's recently-released guidance on the 40B Sustainable Aviation Fuel (SAF) tax credit and what it all means for bioethanol producers. Members who missed the event on Tuesday can find a recording of the webinar in the Resources section of the Growth Energy Member Portal (note: access to the portal is password-protected and only for Growth Energy members. First time users will need to perform a password reset).

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

LATEST EIA DATA

Last week, domestic ethanol demand was 13.8 BGY, up 2.1% compared to a week ago. The EIA-reported gas demand was up 2.1% from last week, at 134.9 BGY. The 4-week average ethanol and gas demand are 13.6 and 132.2 BGY (-4.0% YoY). 

Ethanol production was 14.8 BGY last week, down 2.2% versus the week before, and 6.9% less than the 4-week average in 2019. Midwest production was down 1.7% (-4.7 MG) versus a week ago, and average production in the other regions was down 10.5% (-1.8 MG), evenly split between the USGC and Rocky Mountain regions. Capacity utilization of plants online was 83.6% overall, 84.9% in the Midwest, and 66.3% on average, elsewhere, excluding 1,247 MGY of capacity shutdown at 25 ethanol plants for other than maintenance. On an installed capacity basis, utilization was 78.1% overall, 82.2% in the Midwest and 41.3% in the other regions.

Exports were an estimated 32.4 MG last week based on 140 MG/month of exports forecast for both April and May. The EIA reported no ethanol imports last week.

Overall inventory was down 17.8 MG last week. EIA-counted stocks decreased 54.1 MG, and regional changes were: East (-13 MG), Gulf (-3 MG) and West (-1 MG) Coasts and the Midwest (-38 MG). In-transit inventory increased 36.3 MG.

Based on the total inventory of 1,820 MG on May 3rd and the 4-week avg. domestic demand, there were 49.5 days of supply, down 0.6 days versus a week ago. Including the 4-week avg. of net exports, there were 44.0 days of supply, down 0.5 days versus a week ago.

Based on US Census data, 2.6 MG of fuel ethanol were imported in March, with 1.5 from Canada and 1.1 MG from Brazil to Georgia, most likely to be used as feedstock in the LanzaJet ethanol to jet fuel facility. Year-to-date, imports have totaled 4.8 MG.  In March, there were 7.1 MG of ethanol imports reported for industrial use from Brazil that we believe were for ETBE production and then for re-export to Japan and YTD there have been 25 MG for this purpose

Ethanol exports in March were 167.5 MG, including an estimated 8.7 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 (48 MG), India (22 MG), United Kingdom (19 MG), The Netherlands (19 MG), Singapore (14 MG), Columbia (12 MG) and South Korea (7 MG). The total to Europe (EU + UK) was 39 MG. There was none to Brazil or China, but exports to Singapore and Malaysia could possibly be transshipped to China. YTD through March, exports have totaled 470 MG, 24% more than the same period in 2023.

For more information, please contact Jake Comer.

WORKING FOR YOU

UPCOMING EVENTS

2024 International Fuel Ethanol Workshop

Minneapolis, MN

June 10-12, 2024

IN COMMUNICATIONS

On behalf of the members and supporters of Growth Energy, we are proud to congratulate our CEO Emily Skor on being named one of "Washington's Most Influential People." As our CEO, Emily is redefining the future of America's bioeconomy. Thank you for your leadership!

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

IN MEMBERSHIP

Growth Energy participated in the Ag on the National Mall festival in Washington, D.C., May 6– 8th, 2024. The event celebrated America’s equipment manufacturers, farmers, ranchers, and innovators, working together to drive the tradition of producing more with less environmental impact.

Rep. Eric Sorensen (D-Ill.) (pictured left) and Rep. Darin LaHood (R-Ill.) (right) were among the many visitors Growth Energy welcomed to their booth during the Ag on the Mall event in D.C.

The event was open to the public and an estimated 16,000 visitors joined Growth Energy on the Mall to interact with companies and organizations working on the cutting edge of American agriculture. 

Growth Energy Director of Government Affairs Mary Kate Munro (left, in red) speaks to a group of officials from the U.S. Environmental Protection Agency (EPA) by the Growth Energy booth at the 2024 Ag on the Mall festival.

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

IN REGULATORY AFFAIRS

Growth Energy and other leaders of the U.S. ethanol industry are seeking to intervene in a legal challenge of the ReFuelEU Aviation Regulation, which effectively bans the use of renewable, crop-based biofuels like corn ethanol as a feedstock for decarbonizing the aviation sector. Collaborating in the intervention are Growth Energy, the Renewable Fuels Association, U.S. Grains Council, and LanzaJet. 

The application to intervene in the proceedings supports a challenge brought by ePURE, a trade association representing European ethanol producers, and Pannonia Bio, one of Europe’s largest ethanol producers. Their application seeks to annul the relevant provisions of the ReFuelEU Aviation Regulation, which was adopted by the EU in 2023 and is set to take effect in 2025.

Canada is currently facing a potential strike by the nation's railworkers. Contracts covering engineers, conductors, and yard workers at Canadian National (CN) and Canadian Pacific Kansas City (CPKC) (Canada’s two major railways) expired at the end of last year. Negotiations have been ongoing for the past six months but haven’t really progressed. This week, the worker groups announced that they’d each voted 95% to authorize a potential strike as soon as May 22. Because a potential strike would likely include both engineers and conductors, it would be extremely difficult to maintain service. Railroads would also have to start winding down certain hazmat and other secure shipments ahead of May 22. A recent Reuters article is here. Growth Energy will continue to monitor the situation and keep its members updated.

In other rail-related news, in the U.S., the Surface Transportation Board (STB) finalized the long-awaited rule on reciprocal switching last week. The STB’s final rule allows shippers to seek reciprocal switching when their current railroad fails to meet specific service performance metrics. Unfortunately, the rule specifically excludes any rail traffic that is moved under contract, preventing the vast majority of rail customers from accessing competitive rail service. We have submitted comments as part of several rail coalitions over the past few years in support of reciprocal switching. The details of the final rule can be found here.

In global news, Brazil was reportedly forced to suspend mandatory biofuel content in gasoline and diesel for the next 30 days amid logistics problems to deliver ethanol to the state of Rio Grande do Sul, which is being devastated by the worst flooding in 80 years. The country’s oil regulator (the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP)) stepped in and reduced the percentage of ethanol in gasoline to 21% from 27%, slashed biodiesel blending in S10 (ultra-low-sulfur diesel) to 2% from 14%, and eliminated any requirement for biodiesel contained in S500 diesel due to the risk of shortages for the 11 million inhabitants of the state. 

On the other side of the Atlantic, this week Growth Energy Vice President of Market Development Jake Comer and Kristy Moore of KMoore Consulting joined the U.S. Grains Council (USGC) in Nigeria for an industry trade mission. The group has been urging Nigeria (the largest fuel importer in Africa) to lift the current suspension of its E10 mandate. Doing so would open up the country's market to more than 300 million additional gallons of ethanol. Specifically, the group met with the U.S. Embassy, the Nigerian Ministries of Petroleum and Agriculture, the Nigerian National Petroleum Corporation (NNPC), the Standards Organization of Nigeria, Federal Ministry of Finance, and the Nigerian Midstream and Downstream Petroleum Regulatory Agency.

Moore and Comer (second and third from left, respectively) in Nigeria earlier this week.

Finally, closer to home, Environment and Climate Change Canada (ECCC) is holding a webinar today from 1:00-3:00pm ET on Canada's Clean Fuel Regulation. Specific agenda items include the new version of the Fuel Life Cycle Assessment (LCA) Model and other related documents that will be published in June 2024, and the requirement to submit new carbon intensity (CI) applications after July 1, 2024, using the new version of the Fuel LCA Model, among other topics. The webinar details are below:

Link: https://canada.webex.com/canada/j.php?MTID=mfafbfa5ac673c3c0de1aae58eef17976 

Or join: https://canada.webex.com/ 

Meeting number: 2770 069 1452  

Password: XDhPR6772e@ 

With Oregon’s Department of Environmental Quality (DEQ) beginning the 2024 rulemaking for the Clean Fuels Program, the Rulemaking Advisory Committee met on April 17th. You can view the staff presentation for the meeting here and the meeting memo is here. Among the topics discussed most relevant to Growth Energy's membership were “feedstock attestation requirements” and changes to carbon capture, utilization, and storage (CCUS) project eligibility. 

While DEQ reiterates they are not currently planning on adopting the sustainability certification being proposed in California’s low carbon fuel standard (LCFS) rulemaking, they want to hear from stakeholders on the topic. Growth Energy provided extensive comments in opposition to adopting California's proposed sustainability certification.

Among the changes to CCUS project eligibility are “refining eligibility to geologic storage projects that can meet Class VI well requirements attached to fuel production facilities.” This means the DEQ would not certify a pathway for an ethanol producer using non-onsite CO2 sequestration and only pathways using on-site sequestration would be eligible for certification by DEQ (though DEQ will accept Tier 2 pathways approved or recertified by the California Air Resources Board (CARB)). Growth Energy has pushed back on this proposal in its comments, noting that "restricting CI crediting only to on-site sequestration prevents the vast majority of biorefineries from benefiting as most plants’ locations do not have the geology necessary for Class VI CO2 injection wells. Many of these bioethanol facilities will eventually be utilizing CCUS via a CO2 pipeline." 

You can read the comments in full here. We will continue to keep you posted on any new developments. 

Are you a U.S. ethanol producer, feedstock supplier, or farmer leader looking to gain access to the Canadian ethanol market or need to know more about Canada's Clean Fuel Regulation (CFR)?

Join the U.S. Grains Council’s virtual certification workshop on Thursday, May 30, where you will learn more about market access requirements, certification avenues, ethanol market dynamics in the region, pricing opportunities, and more.

The U.S. ethanol sector has an opportunity to maintain and increase access to our top ethanol market, which has a sales potential of 1 billion gallons. Hear directly from Environment and Climate Change Canada (ECCC) regulatory officials in charge of program implementation and sign up for individual plant consultations on a first-come, first-served basis.

To register for the certification workshop, please use this link. 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 Regulatory Affairs Chris Bliley.

IN GOVERNMENT AFFAIRS

With an emergency waiver for summertime sales of E15 secured, we must continue to make our argument for year-round E15 to the EPA, on Capitol Hill, and in state legislatures around the country. We've found that a picture really is worth a thousand words. If you see an example of significant cost savings at a fuel station near you, take a picture (like the one above) and share it with us! We'll put your photos to good use telling the story of how E15 saves drivers money. Email them to hcullen@growthenergy.org.  

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

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

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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. 

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