Reps. Axne, Bustos, Finkenauer, Craig Secure Biofuel Support in Heroes Act

May 12, 2020
Press Release

After leading a call for biofuel support to be included in the next COVID-19 legislative relief package, U.S. House Representatives Cindy Axne (IA-03), Cheri Bustos (IL-17), Abby Finkenauer (IA-01), and Angie Craig (MN-02) successfully secured support for the industry as part of the Heroes Act.

Yesterday, the group led a letter to House leadership, warning that a struggling biofuel industry could have cascading effects on the entire agriculture sector.

In the wake of the COVID-19 pandemic, demand for biofuel production has fallen to record lows, with nearly 150 biofuel plants falling idle or cutting production, leaving many producers unable to make ends meet. As biofuel demand has waned, corn and soybean production prices have fallen by 15 and 10 percent, respectively. With projections showing deep losses, 350,000 American jobs could be at risk.

“Prices are at record lows, and producers are unable to make ends meet,” the lawmakers wrote. “These dire statistics translate into devastating economic impacts throughout the economy, as rural job losses mount in our districts, agricultural commodity prices fall precipitously, hurting farmers, and shortages of biofuel co-products impact food security. The health of the agriculture sector is directly tied to the health of the biofuel industry.”

“We thank Reps. Bustos, Finkenauer, Axne, Craig and the other six House Democrats for their letter urging Speaker Pelosi to ensure emergency relief measures for renewable fuels are included in the next COVID-19 package.  The ethanol industry is facing the worst crisis in its 40-year history, and roughly half of the industry remains shut down today, putting tens of thousands of jobs at risk. These leaders understand that rural communities across the nation depend on the renewable fuels industry for job creation, economic vitality, and new market opportunities for farmers. They know we cannot afford to leave behind such a vital sector of the economy, and we are grateful for their dedicated leadership,” said Geoff Cooper, President and CEO, Renewable Fuels Association.

“We are deeply grateful to Reps. Bustos, Axne, Craig, Finkenauer, and all our champions in the House who are fighting to make the recovery in rural America a top priority for Congress,” said Growth Energy CEO Emily Skor. “The crisis biofuel producers face is an unprecedented threat to America’s agricultural supply chain. But with support from our leaders in Washington, we can be ready to swiftly restore demand for America’s farmers and revitalize growth as conditions improve.”

The letter was also signed by Reps. Dave Loebsack, Mark Pocan, Collin Peterson, Ron Kind, Lauren Underwood and Kendra Horn.

Text of the letter is below and can be found here:

Dear Speaker Pelosi, Minority Leader McCarthy, Majority Leader Hoyer and Minority Whip Scalise:

We are writing to request the inclusion of support to the biofuel sector in the next COVID-19 legislative relief package.

Identified as an essential critical infrastructure workforce, the biofuel sector has been hard hit by the impacts of the stay-at-home measures associated with the COVID-19 response.

Already nearly 150 U.S. biofuel plants are fully idle or have cut production as the Energy Information Administration (EIA) reports that demand for motor fuel, and by extension ethanol and biodiesel, has fallen by nearly half, to a 50-year low.  Multiple studies report that ethanol demand is expected to be approximately 3 billion gallons less in 2020 than otherwise expected, and sales could fall by 46 percent, more than a $10 billion drop.

Prices are at record lows, and producers are unable to make ends meet. These dire statistics translate into devastating economic impacts throughout the economy, as rural job losses mount in our districts, agricultural commodity prices fall precipitously, hurting farmers, and shortages of biofuel co-products impact food security.

The health of the agriculture sector is directly tied to the health of the biofuel industry. As demand falls for commodities like corn and soybean oil, one-third of which are purchased by biofuel plants each year, prices for those crops have fallen by 15 percent and 10 percent, respectively. The biofuel sector supports at least 350,000 U.S. jobs, with 20% losses expected, and projections show that the biofuel industry’s contribution to gross domestic product (GDP) could drop by nearly one-third this year. 

The reliance of the food supply on the biofuel sector is now visible in this time of crisis. Ethanol is the top supplier of commercial carbon dioxide to the food industry for refrigeration and preservation of food. Without this important source, shortages are emerging. Similarly, the lack of a regular supply of dried distiller grains, or DDGs, is impacting livestock feed rations and prices. Biodiesel plants provide critical demand for soybean oil, distillers corn oil, animal fats from livestock production, and recycled oils from restaurants. Reduced demand for these oil byproducts will result in higher prices for livestock feed and ultimately higher prices for consumers. 

Biofuels are a critical part of our nation’s transportation fuel supply. They lower gasoline prices, cut emissions, and give consumers choices at the pump while supporting our economy. It is in the national interest to ensure that the biofuel sector can emerge strong and support the nation’s recovery with low-cost, clean, homegrown transportation fuel.

Without an infusion of relief funds from the U.S. Department of Agriculture, the sector is expected to continue its current economic descent, slowing the nation’s recovery, further lowering demand and prices for farmers’ crops, and destabilizing the food supply chain. We urge you to provide COVID-19 financial support for the biofuel sector through the U.S. Department of Agriculture.

Sincerely,

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