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Iowa ethanol production drops by .5 billion gallons in 2020

Biofuels will always battle political winds, Iowa industry leader says.

Renewable fuels, in Iowa, have weathered multiple storms in 2020 and have their work cut out for them in 2021.

During his state of the industry address Tuesday at the 2021 Iowa Renewable Fuels Summit, Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw characterizes the Iowa biofuels industry as “battered, but battling for a better future” – emphasizing the many opportunities to expand biofuel demand in the state, across the country, and around the world, according to an IRFA press release.
“Our industry just suffered through the triple whammy of RFS exemptions, lost export markets, and COVID demand destruction piled on top of each other,” Shaw said. “Yet, here we are. Which is what I love most about this industry,” Shaw says. 

He added, “The power of biofuels to propel the rural economy is so great that the people in this industry will simply never give up. That, my friends, is the state of the Iowa biofuels industry in 2021: battered, but battling for a better future.”
Shaw touched on several federal and state battles biofuel producers currently face and encouraged them to keep up the fight. 

Ethanol to fight political winds

Biofuels will face battles, regardless of who or what party controls the White House or Congress, the Iowa biofuels leader says.

“Remember, the Obama Environmental Protectioin Agency (EPA) approved E15 for 2001 and newer vehicles, but not the summer volatility allowance. It denied oil state governor requests for Renewable Fuel Standard (RFS) waivers, but then illegally exercised the general RFS waiver authority to destroy a billion gallons of biofuels demand. It approved cellulosic corn kernel fiber RFS pathways but ended the incentive for flex fuel vehicle production,” Shaw stated. 

Meanwhile, the Trump EPA destroyed over 4.0 billion gallons of biofuel demand through the illegal use of RFS refinery exemptions, Shaw stated. “But, it approved summertime E15 sales. It shut down new cellulosic RFS pathways, but signed into law a multiyear extension of the biodiesel blenders tax credit.”

During his address Tuesday, Shaw pointed out that biofuels have always, and will always, face challenges.

Shaw pointed out that on the campaign trial, President Biden criticized the rampant use of refinery exemptions by the Trump EPA, stating: “...we have a president who has sold out our farmers by undercutting the Renewable Fuel Standard with the granting of waivers to Big Oil... The Renewable Fuel Standard marks our bond with our farmers.”

Shaw pointed out that on the campaign trail, Biden (the candidate) stated, “A Biden-Harris administration will promote and advance renewable energy, ethanol, and other biofuels to help rural America and our nation’s farmers...”.

President Biden should follow through by quickly restoring the proper legal thresholds for RFS exemption requests, Shaw stated Tuesday.

Playing catch up

Between the COVID-19 pandemic and a presidential election, not much progress occurred for biofuels in 2020.

“In short, we must be ready to do battle in 2021. I believe one of those battles will be getting some folks in the Biden administration to stand behind sound science instead of adopting the bumper sticker policy fads of the day,” Shaw stated in his address. “One example is the head-long rush to enact an electric vehicle (EV) mandate.”

Shaw pointed out that more considerations should be given to whether EVs have a higher carbon footprint per mile than a flex-fuel powered by E85 fuel.

Shaw told the virtual conference attendees that biofuels supporters must be ready to fight EV mandates in 2021.

He added, “Biofuels supporters also better be ready to battle for sound science in accounting for farming improvements. There are groups out in DC right now trying to convince the Biden team that farmers are bad, growing corn is horrible for the environment, and biofuels like ethanol are nothing short of evil.”

While he can’t stand alone, Iowa’s renewable fuel leader says that USDA secretary designee Tom Vilsack will stand up for sound science for both farming and biofuels.

Production Drop

While biodiesel production in Iowa held steady in 2020, the state produced .5 billion gallons fewer ethanol than just the year before. 

“Biofuels are still one of the most important drivers for the Iowa economy, but our positive impact is diminished,” Shaw stated. 

According to IRFA’s annual economic impact study, the production of ethanol and biodiesel accounts for nearly $4 billion in state gross domestic product, supports 37,000 direct and indirect jobs, and boosts Iowa household income by $1.8 billion.

“That is a significant impact, but all of those numbers are down 20% to 25%, compared to the previous year,” Shaw says. 

Shaw added, “Quite frankly, this is a wake-up call to redouble our efforts at the state level. If Midwestern states work together, we can drive local demand for biofuels in a meaningful way, thereby providing a sturdy market foundation – even as we supply the rest of the United States and markets around the world.” 

He called on Iowa leaders to authorize $15 million a year for the next five years to fund Iowa’s cost-share grant program that enables retailers to update fuel infrastructure to sell higher blends of ethanol and biodiesel, entitled the Renewable Fuels Infrastructure Program (RFIP).

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