Demand Destruction

The latest U.S. Energy Information Administration data again shows ethanol blending and consumption in the U.S. remain steady and strong compared to previous years. This disproves claims that U.S. ethanol demand has been decimated by hardship waivers exempting small refineries facing that are facing hardship from their Renewable Fuel Standard blending obligations.

As we progress through 2019, one thing that has remained consistent is that U.S. ethanol consumption and blending are higher this year than they have ever been — a sign that small-refinery hardship waivers exempting some qualified facilities from Renewable Fuel Standard (RFS) blending obligations have not destroyed demand for ethanol.

Unpredictable costs associated with Renewable Fuel Standard (RFS) compliance are a reality for refiners in the United States, and debates about small refinery exemptions (SREs) must remain honest and grounded in data.

As biofuel producers know very well, ethanol is a highly valued octane booster that can depend on market demand, not mandated consumption, for its competitive edge.

The corn lobby has falsely claimed recently that waivers granted by the EPA to small refiners—relieving them from the onerous costs of complying with the Renewable Fuel Standard (RFS)—have destroyed demand for ethanol. Nothing could be further from the truth.