73 US ethanol plants now idled, 71 significantly reducing operations

HOUSTON (ICIS)–According to the ethanol trade group, The Renewable Fuels Association (RFA), 71 ethanol plants in the US are now idled with 71 significantly reducing operations to deal with the impact of the coronavirus as it destroys fuel and fuel ethanol demand.

The RFA also said that “US ethanol sales in 2020 could fall by more than $10bn  and the industry’s contribution to gross domestic product (GDP) could drop by nearly one third,” in a statement.

US fuel ethanol prices continue to be pressured by a lack of demand and historically high inventories as most of the US remains on stay at home orders due to the coronavirus.

An analysis done by RFA estimates that ethanol production could fall by around 3bn gallons in 2020, a nearly 20 percent cut from previously expected levels.

This comes as the governors of five US states, Louisiana, Texas, Oklahoma, Utah and Wyoming, asked the US Environmental Protection Agency (EPA) for waivers for the Renewable Fuel Standard (RFS) for their refiners.

The relief package that was issued by the US Department of Agriculture excluded any assistance to the ethanol industry, adding to the headwinds that many ethanol market participants are currently facing.

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