Ethanol demand is falling again; RFA says financial assistance is needed
Ethanol demand is falling again as the coronavirus surge reduces travel.
Scott Richman, chief economist for the Renewable Fuels Association, says gasoline and ethanol consumption has fallen to its lowest point since May.
“The last two to three weeks have been pretty troubling,” Richman says. “The amount of implied gasoline demand has really fallen to an uncomfortably low level. Thanksgiving week travel was far below a year ago and ethanol stocks have increased to their highest levels in month as well.”
Richman says many ethanol plants are starting to cut back on production once again.
“We’re getting indications that facilities are cutting back by 10 to 20 percent—and there are some that have really never come back online from the difficulties in the spring,” he says. “It’s a tough situation when you are in an industry where your market has pulled back by 15 percent, give or take.”
Richman says their numbers show that, through November, ethanol producers had lost 3.8 billion dollars since the start of the pandemic. It has prompted RFA to make another plea to Congress for financial assistance for the industry.
“As Congress debates another COVID-19 relief package, we implore policymakers to consider the devastating economic impact the pandemic has had on renewable fuel producers,” sys RFA president and CEO Geoff Cooper. “The decrease in ethanol production has idled or permanently closed plants across the heartland and caused job losses in rural communities where good employment is often hard to find.”
“As an industry deemed critical and essential to America, we call on Congress to act swiftly to provide some targeted relief to our nation’s renewable fuels industry.”