Several American ethanol plants have slashed production over the past week or idled entirely as the coronavirus outbreak cuts into fuel consumption and hit margins to refine the corn-based fuel, the head of a biofuel trade group revealed.
The Renewable Fuels Association (RFA) Chief Executive Geoff Cooper said on a conference call he expects ethanol production to fall further, and called on the US Environmental Protection Agency to ease strain on the industry by ceasing to grant small refineries waivers from the nation’s biofuels mandates.
The spread of coronavirus has disrupted business, travel and daily life across the globe.
As governments urge people to stay indoors to curb the outbreak of Covid-19, fuel demand has slackened.
Margins to produce ethanol, which the United States requires to be blended into the nation’s fuel pool, have fallen, prompting concern about plant shutdowns and job uncertainty.
Ethanol refining margins in the Corn Belt fell to as low as -11 cents a gallon in early March and currently sit at 10 cents a gallon.
“We’re doing everything we can to make sure we can survive and weather the storm but it’s definitely going to be ugly,” Randy Doyal, chief executive of Al-Corn Clean Fuel in Claremont, Minnesota, said during the conference call hosted by RFA.
Some 200 plants across the United States produce just over 1 million barrels per day of ethanol.
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