RFA says USDA corn report clearly shows need to boost ethanol consumption

In Washington, U.S. Department of Agriculture reported Tuesday that American farmers are expected to harvest a record-large corn crop of 16.7 billion bushels this fall, while the corn surplus is projected to rise to its highest level in eight years and prices are set to sink to six-year lows. According to the Renewable Fuels Association, the USDA report clearly highlights the urgent need to remove artificial regulatory barriers that are undercutting demand and constraining market opportunities for both corn and ethanol.

RFA said the following policy and deregulatory actions are needed to help avert an economic crisis in the farm economy.

·      Congress should pass the Nationwide Fuel Retailer and Consumer Choice Act, which would allow E15 to be sold year-round, nationwide without the need for ad hoc emergency waivers.

·      Congress should adopt the Ethanol for America Act, which would streamline regulatory requirements related to E15 pump labeling and equipment compatibility.

·      Congress and the Administration should eliminate century-old “denaturant” requirements, which obligate ethanol producers to poison their clean, renewable fuel with dirty, toxic substances. These requirements create challenges for using ethanol to make renewable jet fuel, and they ultimately reduce demand for corn by displacing ethanol with low-quality hydrocarbon “denaturants.”

·      The Administration should finalize strong RFS volumes, limit small refinery exemptions, and reallocate any exempted volumes. Once finalized, the 2026 and 2027 RFS volumes proposed by EPA will help boost demand for U.S. farmers. But those gains can only be realized if the volume requirements are not destabilized with unrestored SREs. Notably, the last time corn prices were this low and the corn surplus was this high was in 2018/19, when the massive issuance of SREs destroyed demand for ethanol, biomass-based diesel, corn, and soybeans.