(NAFB) — The Trump Administration’s trade war with China and the surge in small oil refinery RFS exemptions have the U.S. ethanol industry nearing the breaking point.
Green Plains Ethanol CEO Todd Becker tells Reuters that the weight of those two factors is becoming almost unbearable. The U.S. ethanol industry growth has stalled in the face of President Trump’s trade war with China, a major ethanol buyer. The small refinery exemptions under the Renewable Fuels Standard handed out to small refineries by the Environmental Protection Agency has seriously cut into demand. The sustained downturn is beginning to take a significant toll.
Becker tells Reuters that, “Some plants will slow down, some will shut down, and some will shut down forever.”
The president did fulfill a promise to lift the summer ban on higher blends of ethanol. However, the infrastructure the industry needs to deliver it will require time to build. Becker says there are about 2,000 retail stores equipped to supply E85 gasoline, but the industry needs about 10,000 stores to boost demand. Becker did say he feels the industry has been “undisciplined,” continuing to ramp up production while facing weak demand growth and growing supplies.
Source: National Association of Farm Broadcasters