3bn gallons of fuel ethanol idled, some plants switch to industrial production - RFA

Author: Alex Snodgrass

2020/03/26

HOUSTON (ICIS)-- The Renewable Fuels Association (RFA) predicts that 3bn gal of ethanol capacity has been idled or will idle in the next several days as the coronavirus (Covid-19) continues to dampen gasoline and fuel ethanol demand.

"We believe between 30-40 plants are fully idle and another 40-50 have reduced output," said Geoff Cooper, CEO and president of RFA.

US fuel ethanol producer and refiner Valero is closing two of its ethanol plants and declaring force majeure on shipments of dried distillers grains or corn purchases, according to sources.

The force majeure is due to lack of storage availability for corn or ethanol as gasoline demand wanes and storage remains limited due to excess supply.

While some plants cut production, others have the ability to shift to industrial ethanol as the need for sanitzers increases.

Making industrial alcohol from ethanol requires a further step in distillation, so not all fuel ethanol plants are able to accomplish this.

It also requires permits from the US Food and Drug Administration and the federal Alcohol and Tobacco Tax and Trade Bureau.

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