Biotech Updates

Reduced U.S. Ethanol Targets May Close Mills

December 11, 2013
News article: http://www.stltoday.com/business/local/ethanol-mills-face-closures-as-obama-cuts-target/article_b3b2b6a2-2edc-5506-bb8c-42bf7bab93d2.html

U.S. ethanol companies are expecting mill closures and output cuts after the Environmental Protection Agency (EPA) proposed reducing consumption targets for the first time.

As a result of the cutbacks in ethanol blending in 2014 under the country's biofuel mandate, also known as Renewable Fuel Standards (RFS), as many as 20 ethanol plants face shutdowns, according to some industry players. Gasoline demand is expected to be 13 percent less next year than estimated in 2007 when the RFS was first implemented.

The government's proposed target for next year is 12 percent lower than the 14.8 billion gallons the industry has the capacity to produce, according to industry data. Analysts predict that ethanol plants that have not yet recovered because of slumped corn production and record corn prices last year may not be able to resume output as a result of the lower mandate. To avoid plant shut down, the industry should be able to find export markets.