Industry representatives share what they think are the top trends in ethanol.
The past year was significant for the ethanol industry. EPA approved E15 (15% ethanol blended gasoline) for model year 2001 and newer vehicles. And the Volumetric Ethanol Excise Tax Credit (VEETC) of $0.45/gal. expired. Ethanol production is expected to increase with E15 entering the market. The Renewable Fuels Association (RFA) has reported that it is working to finalize federal requirements to certify E15 blends. A couple of states are ready to go with E15 as soon as the federal requirements are completed.
These representatives shared comments about the industry and what lies ahead.
1 Ethanol helps corn prices
Matt Merritt, spokesman for Poet, says, “Ethanol has become a critical component of modern agriculture and today uses roughly 40% of the nation’s corn crop. This has been a contributing factor in improved commodity prices and has led to financial success for grain farmers, particularly over the last three years.”
2 Ethanol is under attack
Poet’s Merritt adds, “Support for ethanol is being undermined by oil companies, livestock associations, food companies and grain shippers. The PR campaigns and federal and state lobbying efforts being carried out by these groups is damaging ethanol’s reputation. If this isn’t countered, it could result in policy changes that drive commodity prices back to unsustainable levels. Farmers need to know how important it is to get involved in this fight today. Contact your senator, write a letter to the editor or take part in the discussion. If you’re not sure where to start, join Growth Force (www.growthforce.org) and follow their lead.”
3 Working without VEETC
"The key to growth in the industry is the ability to create long-term value in the marketplace without the assistance of government subsidies,” says Jake Reint, spokesman for Flint Hills Resources. “Innovation and base optimization spurred by competition will be the key drivers of success.”
4 Ethanol plant values up
Valero became a big player in the ethanol industry in 2009 when it purchased several ethanol production plants from the sale of VeraSun Energy Corporation’s bankruptcy assets. “When Valero bought its first ethanol plants from the VeraSun bankruptcy, production plant values were very low and we were able to get a good deal. Since then plant values have increased,” says Bill Day, executive director, media relations, Valero Energy Corporation.
5 Cellulosic ethanol delayed
While cellulosic ethanol has been delayed, it is on the horizon. The Advanced Ethanol Council’s executive director Brooke Coleman recently said, “In a very difficult financial and policy environment, the first wave of commercial advanced ethanol production facilities is under construction in a number of states across the country.” Poet’s Project Liberty cellulosic ethanol plant in Emmetsburg, Iowa, is scheduled to come online in 2013, and Valero announced it would form a joint venture with Mascoma to operate a cellulosic ethanol plant in Kinross, Mich.