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Outlook for Ethanol Industry Looks Strong

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With the fourth straight year of record profitability for the U.S. ethanol industry last year, the outlook for the domestic ethanol industry remains strong, Renewable Fuels Association (RFA) President and CEO Bob Dinneen declared today during his annual State of the Industry address at the National Ethanol Conference. Addressing more than 1,000 attendees, he touted the ethanol industry’s ability to navigate any market or policy challenges that lay ahead.

Last year was “a record year for production, a record year for net exports, a record year for domestic demand, and a record year for E15 sales and infrastructure build-out. It was, in short, a pretty darn good year,” said Dinneen. “Thus, I can once again say with great confidence and respect for what you have been able to accomplish that the state of the U.S. ethanol industry is strong, poised for continued growth, steeled for the challenges we know will persist, but resolute in our commitment to consumers seeking relief and choice at the pump, farmers in need of value-added markets for their commodities, and Americans all across the country concerned about the air we breathe and the national security threat posed by our stubborn dependence on imported energy.”

In 2016, 200 plants across 28 states—including six right here in California—produced a record 15.3 billion gallons of clean-burning, high-octane ethanol, while supporting 74,420 direct jobs and 264,756 indirect and induced jobs across the country. Meantime, so far this year, the U.S. ethanol industry is producing at an annualized rate of 16.1 billion gallons, meaning a fifth straight year of growth, Dinneen touted.

Not resting on its laurels, the U.S. ethanol industry is focused on future growth, Dinneen told attendees. “We must expand existing markets and open new markets for ethanol here and abroad. We must continue adding value to our plants and pursuing technologies that will make us more efficient and profitable.”

“Of course, we will be doing this with a new President, new leadership throughout the government, and a political climate less than welcoming to expanded corn ethanol. Success will depend on our ability to build partnerships with new allies and a coalition reflecting today’s political reality,” Dinneen said, echoing the theme of this year’s conference, “Building Partnerships, Growing Markets.”

The ethanol industry already has a strong base of support, both in Congress and from President Trump, who spoke favorably about ethanol and the Renewable Fuel Standard (RFS) throughout the campaign. “President Trump’s support for ethanol and the RFS is unwavering,” Dinneen said.

The RFA also anticipates the Trump administration will stand up for American trade, and fight back against any trade distorting tariffs, such as those recently imposed by the Chinese on U.S. ethanol and dried distillers grain exports.

Domestically, the ethanol industry will focus on building demand, including growing the marketplace for 15% ethanol (E15), Dinneen told attendees. Major marketers like Thornton’s, Kum & Go, Sheetz and RaceTrac already offer the fuel blend, but the industry is being hamstrung by EPA’s “nonsensical disparate treatment of E10 and E15 with regard to volatility regulations.” One of RFA’s top priorities will be to secure RVP parity for all ethanol blends, Dinneen said.

The future for the U.S. ethanol industry is bright, but will ultimately be successful if new partnerships are built and the new partnerships and remain united. “I am committed to presenting a united and unbreakable front so there is no ambiguity as to where the entire ethanol industry stands. And I am confident others share my commitment and will work with us toward a common purpose – growing demand and making this industry the success it must be if we are to achieve the energy, environmental, rural economic, and consumer goals that define our mission,” Dinneen concluded.