WASHINGTON DC (May 20, 2020) – Senators Charles "Chuck" Grassley (R-IA) and Amy Klobuchar (D-MN) introduced legislation to support biofuel producers negatively affected by the pandemic. This legislation will require the US Department of Agriculture (USDA) to reimburse biofuel producers for their feedstock purchases from January 1, 2020 through March 31, 2020 through the Commodity Credit Corporation.
“The biofuels industry works directly with our farmers. And the current disruptions from the pandemic have created ripple effects, including steep declines in corn and soybean prices. We need to continue to support those farmers who feed and fuel our country and the world. This bill will help ensure biofuel producers survive this economic downturn and also ensure corn and soybean farmers have a place to sell their products,” Sen Grassley said.
At a time when many farmers and rural communities are feeling disproportionate impacts from the coronavirus pandemic, it’s important we work to keep our renewable-fuel industry strong,” Sen Klobuchar said. “Renewable-fuel processing-plants employ thousands of people in rural areas, purchase billions of bushels of commodities from farmers, and provide stability in our agricultural supply-chain. This legislation will ensure farmers and workers receive our support during these tough times.”
As the coronavirus pandemic spread, gasoline use in the United States plummeted to 50-year lows around the country. From March 8 to April 4 of this year, the total miles driven dropped by 58 percent. This rapid decrease in consumption has led more than 130 biofuel plants to partially or fully shut down. Forty percent of Iowa ethanol production remains offline still today.
Sen Grassley initially pushed for this proposal as an amendment in the CARES Act to match the proposed funding for the Strategic Petroleum Reserve. When assistance for the oil industry was not included in the package, neither was the Grassley biofuel amendment. However, there have since been purchases for the Strategic Petroleum Reserve through administrative action. Grassley and Klobuchar continued to hear from their constituents and members of the biofuel industry and introduced this as separate legislation.
“Urgent, bipartisan calls to protect America’s biofuel sector continue to resonate across Capitol Hill, and we’re grateful to Senators Grassley and Klobuchar for outlining a solution that would deliver immediate relief for biofuel workers, our farm partners, and thousands of rural communities,” Growth Energy CEO Emily Skor said. “After the devastation created by COVID-19, it’s vital that Congress and the US Department of Agriculture ensure that biofuel plants stand ready to restore production and reopen markets for America’s farmers. Unless Washington acts, we’ll be trying to rebuild the rural economy with one arm tied behind our back.”
“Grassley’s bill would provide much-needed relief for biofuels producers in the face of COVID-19 demand destruction. The pandemic hit Iowa’s biofuels industry hard and around 40 percent of the state’s ethanol production capacity remains offline. Without economic help many plants may lack the necessary resources to purchase corn and resume production, even as more Americans head back to work and demand begins its long, slow climb back to normal levels. We thank Sen 'Chuck' Grassley for leading the effort to help renewable fuel producers during this difficult time. IRFA encourages Congress to act swiftly to provide producers with this vital relief,” Iowa Renewable Fuels Association Executive Director Monte Shaw said.
“The 350,000 men and women whose livelihoods are supported by the ethanol industry know they can always count on Sen Grassley to fight for them and help them through tough times. The ethanol industry is facing the worst economic crisis in its history, as demand has collapsed in response to COVID-19 and dozens of plants have been shuttered. The legislation introduced today by Sens Grassley and Klobuchar would lend a vital helping hand and assist renewable-fuel producers as they attempt to get back on their feet. We thank Sen Grassley for his tireless support and dedication, and we look forward to the inclusion and expeditious passage of this emergency-relief provision for the ethanol industry in the next COVID-19 stimulus package,” Geoff Cooper, President and CEO Renewable Fuels Association said.
“We are grateful to Sens Grassley and Klobuchar for supporting the biodiesel industry and US farmers as they deal with the economic fallout of the coronavirus emergency. The biodiesel and renewable-diesel industry provides a valuable market for recycled cooking oils, surplus animal fats, and vegetable oils, such as soybean oil. Biodiesel production supports 13% of the value of each bushel of US soybeans. Maintaining a strong biodiesel industry is vital to keeping America’s critical agricultural infrastructure healthy,” Kurt Kovarik, VP of Federal Affairs, National Biodiesel Board said.
The legislation can be found HERE.