Trump Administration Says Plan Would Restore Ethanol Demand

Oct 4, 2019

The Trump administration says it plans to implement new rules that will increase demand for ethanol, reversing a decline caused by exemptions given to oil refineries.

The proposal announced Friday follows months of complaints by Midwest farmers, politicians and the ethanol industry that the federal government's granting of waivers to refiners had violated federal law and forced some ethanol plants to close.

“In Illinois, renewable fuels drive demand for our corn and soybean farmers, and the announcement by President Trump’s Administration today is a victory for Midwest agriculture and biofuel producers,” said Rep. Darin LaHood (R-Peoria) in a statement. “This deal ensures that lost gallons from small refinery waivers are accurately accounted for and remove barriers to higher biofuel blends."

"The small refinery waivers have directly hurt producers in Illinois by further reducing already depressed demand. Much like with our ongoing trade war, the administration is now being forced to provide relief for pain caused by their own actions," said Rep. Cheri Bustos (D-Moline). "While the steps announced today move us in a better direction, the details, which are still months away, will truly determine if these steps will be enough to provide relief for the harm the administration has caused."

Roughly 40 percent of U.S. corn is used to produce ethanol, so declining demand for the fuel additive can depress prices for the grain.

Although the proposal by the Environmental Protection Agency and Department of Agriculture wouldn't address the current loss of ethanol demand, it would ensure that beginning in 2020, the government would comply with a 15-billion-gallon standard already required under federal law.