Urgent Action on E15 Needed as First Step to Agriculture Recovery

Press Contact: Hannah Love

515-322-0435

 

WEST DES MOINES, IA – A new corn supply study released today underscores the need to develop new markets to underpin farm income and rural economies. The study lays out a market development roadmap and the policies necessary to ensure farmers and renewable fuels producers have the tools and technologies required to access large emerging markets. 

Decision Innovation Solutions (DIS) conducted the study, commissioned by the Iowa Corn Growers Association and Iowa Renewable Fuels Association (IRFA).  

The study found: “With trendline yields pushing corn production to new record highs, new demand drivers are needed to support and sustain the economic drivers in the Cornbelt that are provided by corn production. Lowering acreage by 10% as forecast by [USDA] will significantly weaken the rural economies that rely on the associated activities of corn production.” 

According to the study, adoption of nationwide, year-round E15 would provide robust near-term demand with the ability to return corn prices to profitable levels. However, corn supplies would soon exceed demand once that occurs. For the longer term, the study highlighted that E15 buys time for corn farmers and renewable fuels producers to develop new markets in the marine and aviation sectors. Additionally, the study found the emerging markets share a common thread – the desire for ultra-low carbon ethanol. 

Policies Needed to Address the Demand Gap for Corn: 

• Congressional approval of nation-wide year-round E15: Permanent waivers in 7 states is insufficient. A loud, strong message needs to be sent by Congress that domestic, home-grown E15 is ready to be facilitated and supported on a permanent, year-round basis. 

• Reinstatement of the 45Z production credits for SAF: Congress needs to restore the credit levels that were in place before OBBBA. The Energy Department laid out the roadmap for transformation of the U.S. aviation fuel market to reduce emissions and become a world leader in development and adoption of low-carbon aviation fuel. In the early years of development of this new, exciting fuel market, the $1.75/gallon tax credit is needed for SAF. Congress needs to restore the credit levels that were in place before OBBBA. Further, Congress must recognize that ethanol can be both a qualifying 45Z fuel and a feedstock for qualifying 45Z SAF. Congress must modify the current 45Z structure to ensure that there is not an unintended disincentive to use ethanol as a feedstock for SAF, instead of just as a fuel itself. 

• Carbon Capture Utilization and Sequestration (CCUS): Low-carbon ethanol throughout the Midwest needs to be facilitated by adoption of rules and regulations that will allow for the safe and economical capture, transport, and sequestration of CO2 from ethanol plants. A small, first step is already underway in Nebraska with the transition of the Trailblazer pipeline to a CO2 pipeline. With plans to service eleven ethanol plants in Nebraska and one in Iowa, this project will facilitate early development of enough low-carbon ethanol that the domestic ETJ pathways for SAF can be developed and built. But twelve ethanol plants on a pipeline is just the beginning. There are 50 to 70 more ethanol plants that are waiting in the queue for their opportunity to lower the carbon intensity score of their fuel and be enabled to be an attractive option for marine fuel and/or a viable feedstock of the future for SAF. 

• Conservation Smart Agriculture (CSA): USDA, U.S. DOE, and U.S. Treasury should finalize rules for 45Z that recognize the carbon reducing impact of CSA agronomic practices. Previous tentative steps in this direction should be more robust. The full suite of CSA practices should be recognized and full credit to farmers should be provided. Previous efforts that caved to pressure from anti-farmer groups should be abandoned for a science-based approach. Through the full recognition of CSA practices, the government can provide farmers an enhanced revenue opportunity while also empowering ethanol producers with another tool to produce the ultra-low carbon ethanol coveted by growing markets around the world. 

“Renewable fuels pulled agriculture out of hardship at the turn of the century, and they can do it again today,” said IRFA Executive Director Monte Shaw. “This study lays out the clear threat to rural America and Iowa’s economy if we sit on our hands. Iowa farmers desperately need growing markets. The good news is that the study found those new markets exist. First, E15 and then emerging ultra-low carbon markets. The best way to open new ethanol markets around the world is with carbon capture, utilization and sequestration (CCUS). That is the most cost-effective and impactful tool we can provide our farmers and producers to grow their future.” 

 To view the full study, click here.  

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The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 42 ethanol refineries capable of producing over 5  billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 8 biodiesel facilities with the capacity to produce 408 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.