Farm Credit Council asks if banks will “sit back and wait for someone else to take the financing risk to get the industry up and running”

December 31, 2007

The Farm Credit Council said that, following the singing of the Energy Independence and Security Act, that US industry will require $105.5 billion in capital to meet the new Renewable Fuel Standard.

Council director Ken Auer questioned whether commercial bankers would “sit back and wait for someone else to take the financing risk to get the industry up and running”.

Auer referred to a banking industry study that showed that commercial banks or private institutions generated about $2 billion of new debt per year for the industry, compared to the more than $10 billion per year that will be required.”

Multiple ethanol projects have been shelved or postponed in the US this year due to tightening credit conditions, as well as shrinking ethanol margins.

Today in Biofuels: US requires $105.5 billion in capital to meet Renewable Fuel Standard; ethanol train derails in Pennsylvania; Brazil’s ethanol production up 20 percent; Greenpeace leader says biodiesel yields are inflated

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Written by Jim Lane · Filed Under Producer News