Ethanol-producing plants idled as demand falls

US-based Valero Energy Corp has revealed it has temporarily idled eight of its ethanol plants and is reducing production at its remaining six ethanol plants following the coronavirus pandemic.
Due to the fall in demand, Valero explained that this together with the decline in the price of crude oil has resulted in a significant decrease in the price of the refined petroleum products manufactured by its refining segment.
As ethanol is primarily blended into gasoline, ethanol demand has also declined, as has the price of products manufactured by the company’s ethanol segment.
The company added that essential businesses continue to operate, including the critical logistics infrastructure to move and transport goods produced by those businesses, which has blunted the decrease in the demand for diesel.
Demand for renewable diesel is consistent with the demand for diesel, Valero said, noting that its renewable diesel segment has not been impacted as significantly as its refining and ethanol segments.
Valero has reduced the amount of corn feedstock processed at the company’s remaining six ethanol plants to address the decreased demand for ethanol.
The company’s 14 ethanol plants have a combined 1.73 billion gallons per year of production capacity.
The company’s renewable diesel segment includes operations of Diamond Green Diesel Holdings LLC, a consolidated joint venture with Darling Ingredients that operates an 18,000-barrel per day facility in Norco, Louisiana. The facility is currently undergoing an expansion that will more than double annual capacity to about 44,000 barrels per day.

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