Since the onset of the COVID-19 pandemic, Minnesota’s ethanol industry, like the rest of the nation, has and continues to face an unprecedented crisis. Some plants have reduced production by as much as 50 percent while others have temporarily idled production. This, in turn, has adversely affected the countless number of industries that work closely with Minnesota’s ethanol industry.
Over here at the Minnesota Bio-Fuels Association, we have been working closely with our state government and congressional delegation to find ways to keep our industry afloat and position it toward an upward trajectory when this crisis ends.
Earlier this month, as demand for sanitizing agents skyrocketed, the FDA relaxed its rules concerning the use of industrial alcohol from ethanol plants for sanitizer. Back here in Minnesota, we worked closely with the Minnesota Pollution Control Agency, the Departments of Agriculture and Public Safety - Alcohol and Gambling Division and the Department of Employment and Economic Development (DEED) to provide our ethanol producers with the necessary guidelines to produce 190 proof and 200 proof ethanol for hand sanitizer or surface sanitizer. Since then, several ethanol producers in Minnesota have diversified their operations to produce ethanol for in-demand sanitizer products.
Other opportunities for diversification for the ethanol industry include meeting the growing demand for CO2 from beverage makers and the livestock industry. We have engaged several engineering firms to explore some options for the rapid deployment of systems to capture CO2 during the ethanol production process. We hope we’ll be able to share some developments in this area with you in the very near future.
Still, it is important to note that these diversification opportunities are not nearly enough to replace the gallons of ethanol that have been lost from this crisis. As such, we have been working with our congressional delegation, the Walz Administration and state lawmakers for some aid that could keep our ethanol industry afloat.
One of our proposals includes cash payments for bushels of corn that were processed by an ethanol plant over a certain date range based on tracked and recorded data. These cash payments would help ethanol plants remain financially viable for a few months so that they will be ready to resume full production when this crisis begins to dissipate. Additionally, we have been working with DEED to provide our ethanol producers with up-to-date information about the federal Paycheck Protection Program (PPP) and other loan options that are part of the CARES Act to help them retain their teams.
For the medium and long-term viability of the ethanol industry, we have long advocated to our congressional delegation on the need for funding for fuel infrastructure that can dispense E15 and other higher blends of ethanol. We are pleased to note that on April 28, Minnesota’s Rep. Angie Craig introduced the bipartisan Clean Fuels Deployment Act of 2020 which authorizes $500 million over five years to help retailers offer higher blends of ethanol. This initiative will help increase the availability and use of E15 and other blends and provide rural Minnesota with some much needed economic relief while reducing harmful greenhouse gas emissions.
In the coming days and weeks, we hope we will be able to share with you more positive developments for our industry. There is a light at the end of the COVID-19 tunnel and it is aimed at a new and positive upward trajectory for our renewable fuels industry.