Grassley, Klobuchar Introduce Bill To Provide Relief For Ethanol Industry

  • Wednesday, 20 May 2020 09:19

Sen. Chuck Grassley and Sen. Amy Klobuchar have introduced legislation to reimburse ethanol producers for feedstock purchases made in the first quarter of this year to provide the industry with some much-needed relief.

This bill will require the US Department of Agriculture (USDA) to provide ethanol producers with feedstock reimbursement payments through the Credit Commodity Corporation.

According to the bill, the reimbursement payments will be 75 percent of the price paid by ethanol producers for feedstock purchases from Jan 1, 2020 to March 31, 2020. 

In the past month, advocates for the ethanol industry such as the Minnesota Bio-Fuels Association have suggested cash payments for bushels of corn processed by an ethanol plant within a specific timeframe as a way to keep ethanol plants financially viable. 

"This bill will help ensure biofuel producers survive this economic downturn and also ensure corn and soybean farmers have a place to sell their products," Grassley said in a joint statement yesterday.

According to the statement, total miles driven in the country dropped 58 percent from March 8 to April 4, sending the ethanol industry into a downturn.

"Renewable fuel processing plants employ thousands of people in rural areas, purchase billions of bushels of commodities from farmers, and provide stability in our agricultural supply chain," Klobuchar said.

This legislation, introduced in the Senate on May 20, comes a week after the House of Representatives introduced the HEROES Act which included the Renewable Fuel Reimbursement Program. In that package, ethanol producers would receive 45 cents per gallon of ethanol produced from Jan 1, 2020 to May 1, 2020. 

For ethanol producers that have not been able to produce ethanol throughout one or more months during the aforementioned period due to the pandemic, they would recieve 45 cents multiplied by 50 percent of the number of gallons they produced in the corresponding month or months in 2019. 

Minnesota's Rep. Angie Craig and Rep. Collin Peterson were instrumental in getting the Renewable Fuel Reimbursement Program included in the HEROES Act.