ETHANOL INDUSTRY OUTLOOK 2021 - Renewable Fuels ...
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2021 ETHANOL INDUSTRY OUTLOOK
RFA OFFICERS RFA BOARD OF DIRECTORS
Rick Schwarck Absolute Energy LLC absenergy.org
Neal Kemmet Ace Ethanol LLC aceethanol.com
Ray Baker Adkins Energy LLC adkinsenergy.com
Eric McAfee Aemetis Inc. aemetis.com
RFA Chairperson Randall Doyal Al-Corn Clean Fuel LLC al-corn.com
Jeanne McCaherty
Jim Sneed Alto Ingredients Inc. altoingredients.com
Guardian Energy Management LLC
Erik Huschitt Badger State Ethanol LLC badgerstateethanol.com
Jim Leiting Big River Resources LLC bigriverresources.com
Chad Friese Chippewa Valley Ethanol Co. cvec.com
Steve Markham CHS Inc. chsinc.com
Ryan Drook CIE cie.us
RFA Vice Chairman Mick Henderson Commonwealth Agri-Energy LLC commonwealthagrienergy.com
Erik Huschitt
Scott Mundt Dakota Ethanol LLC dakotaethanol.com
Badger State Ethanol LLC
John Didion Didion Ethanol LLC didionmilling.com
Carl Sitzmann E Energy Adams LLC eenergyadams.com
Bill Pracht East Kansas Agri-Energy LLC ekaellc.com
Bill Paulsen ELEMENT LLC* elementbiofuels.com
Dave Sovereign Golden Grain Energy LLC ggecorn.com
RFA Secretary Mark Ricketts Grain Processing Corp. grainprocessing.com
Rick Schwarck Steve Christensen Granite Falls Energy LLC granitefallsenergy.com
Absolute Energy LLC
Jeanne McCaherty Guardian Energy Management LLC guardiannrg.com
Gary Anderson Heartland Corn Products heartlandcorn.com
Brian Kletscher Highwater Ethanol LLC highwaterethanol.com
Seth Harder Husker Ag LLC huskerag.com
Chuck Woodside KAAPA Ethanol Holdings LLC kaapaethanol.com
RFA Treasurer Eric Mosbey Lincolnland Agri-Energy LLC lincolnlandagrienergy.com
Charles Wilson Chris Wilson Mid-Missouri Energy LLC midmissourienergy.com
Trenton Agri Products LLC
Thomas Corle New Energy Blue* newenergyblue.com
Bob Pasma Parallel Products parallelproducts.com
Delayne Johnson Quad County Corn Processors quad-county.com
RFA President
Dana Lewis Redfield Energy LLC redfieldenergy.com
Geoff Cooper
Renewable Fuels Association Walt Wendland Ringneck Energy LLC ringneckenergy.com
Brian Pasbrig Show Me Ethanol LLC showmeethanolllc.com
Mike Jerke Southwest Iowa Renewable Energy LLC sireethanol.com
Anthony Leiding Trenton Agri Products LLC trentonagriproducts.com
Dennis Balakian West Coast Waste Inc.* westcoastwaste.info
Tim Winters Western New York Energy LLC wnyenergy.com
Derek Peine Western Plains Energy LLC wpellc.com
*Prospective Member
ESSENTIAL ENERGY
Nobody could have imagined as we left the National Ethanol Conference in Houston a
year ago, inspired by the words of former President George W. Bush, that just weeks
later the bottom would drop out. No one could have possibly foreseen that a global
pandemic would threaten our health, wreak havoc on our economy, and obliterate our
fuel markets. But that’s exactly what happened, triggering the most challenging time
in the U.S. ethanol industry’s history.
At the low point in April, more than half of the nation’s ethanol production capacity
was idled. Total output in 2020 hit a seven-year low, coming in 2 billion gallons below
2019. The industry’s revenue losses associated with COVID-19 approached $4 billion just through November.
Such adversity would be enough to crush many industries. But not the U.S. ethanol industry. We survive.
We fight. And, ultimately, we thrive.
Indeed, when we look back at 2020, the lesson learned will be less about the pandemic’s economic toll
than it will be about the incredible way the industry rose to meet the challenge. If the unfortunate and un-
predictable events of 2020 taught us anything, it is that ethanol is the embodiment of “Essential Energy.”
Even as the wolves were at the door, ethanol producers did everything possible to retain their employees,
continue producing the renewable fuel needed to keep the economy moving, and deliver the nutritious feed
livestock and poultry producers rely upon. Our fuel and feed proved essential for weathering the COVID
storm. The U.S. government agreed, designating the ethanol industry as an “essential and critical” part of
our nation’s infrastructure and making it possible to keep operating during the pandemic’s darkest days.
But we did more than make fuel and feed.
Recognizing the critical need to combat the spread of the virus, many ethanol producers quickly took the
steps necessary to produce the high-purity alcohol that comprises roughly 70 percent of every bottle of
hand sanitizer. Later in the year, news that vaccines were in development was greeted with understand-
able enthusiasm; it signaled the beginning of the end of the pandemic. But it also created a new challenge.
Much of the vaccine would need to be transported and stored at incredibly low temperatures, necessitating
increased supplies of dry ice. Once again, the ethanol industry—which produces 40 percent of the nation’s
supply of CO2, the critical component of dry ice—was called upon to meet the increased demand for an
essential product. Once again, we delivered.
As you review the 2021 Ethanol Industry Outlook, I hope you do so with the same sense of pride I have for
our response to the unparalleled challenges of the past year. But more importantly, I hope you recognize
that as we move forward, it is with the understanding that tomorrow’s challenges of climate change, food
and energy security, and rural prosperity will continue to make ethanol an Essential Energy.
Sincerely,
Geoff Cooper, President and CEO
ESSENTIAL ENERGY 1
FOUR DECADES
OF LEADERSHIP
F orty years ago, the U.S. ethanol industry was struggling
to become a stable, growing, and viable industry. In the
face of oil industry resistance to a new competitor, most
oxide and ozone-forming VOCs, particularly with the use
of reformulated gasoline. Later, with the passage of the
Energy Policy Act of 2005, ethanol and other renewable
understood it would take consistent federal policy to en- fuels were called upon to address global climate change
able reasonable growth in renewable fuels. In early 1981, a by, for the first-time, requiring carbon-reducing renewable
small group of companies, representing ethanol producers, fuels to be used nationally. The Renewable Fuel Standard
investors, feed suppliers, engineering firms, and farmers (RFS) transformed U.S. energy policy and helped create
met to form the Renewable Fuels Association, whose mis- the robust U.S. ethanol industry we have today.
sion it would be to grow the industry.
The RFA was the driving force behind all these foundation-
From just 175 million gallons of production in 1980, the in- al policies. Not only did we provide the vision and techni-
dustry has indeed grown to be an essential component of cal expertise to help formulate and design these policies,
America’s fuel and feed complex, with a total production but we also provided the shoe leather and elbow grease
capacity of more than 17 billion gallons of renewable fuel to get them adopted. The association has evolved over
in 2020. Such remarkable success was driven by decades the years, becoming uniquely driven by ethanol producer
of leadership by the members and staff of the Renewable membership. But it is clear that, for more than 40 years,
Fuels Association. RFA has provided the consistent leadership and sound
technical analysis necessary to meet its original mission—
One of the first things the RFA did was form a Technical growing the U.S. ethanol industry.
Committee to establish standards, identify technologies,
and assure the safe production, distribution, and mar-
HISTORICAL BIOREFINERY COUNT
keting of ethanol-blended gasolines. The RFA’s Technical
& PRODUCTION CAPACITY
Committee was critical to the industry’s growth and lasting
success. It remains so today. Average
Installed Total Installed
Capacity per
Year Ethanol Production
Biorefinery
In the early years, industry growth was driven by a tax Biorefineries Capacity (mgy)
(mgy)
incentive available to gasoline marketers, fueling the use
2000 56 2,007 36
of ethanol as a gas extender and octane enhancer, largely
by independent marketers looking for a competitive edge 2005 95 4,294 45
against the major oil companies. Beginning with the Clean 2010 204 14,073 69
Air Act Amendments of 1990, however, renewable fuel pol- 2015 214 15,594 73
icy was redirected to meet air quality policy goals. Initially, 2020 208 17,436 84
that meant reducing exhaust emissions of carbon mon-
Source: RFA * As of December for each year specified
BREAKING BARRIERS: In October 2020, the RFA
continued its leadership by electing Jeanne McCaherty,
CEO of Guardian Energy LLC in Minnesota, to be its
chairperson, the first woman to lead a national ethanol
trade association. McCaherty reflects an evolving view
of ethanol leaders who understand that future ethanol
policy needs to be focused on today’s pressing challeng-
es, addressing global climate change and building new
markets here and abroad to assure future growth in the
U.S. renewable fuels industry.
PHOTO COURTESY BBI INTERNATIONAL
2 2021 ETHANOL INDUSTRY OUTLOOK
President Donald Trump visited RFA member
company Southwest Iowa Renewable Energy
(SIRE) in 2019 to celebrate regulations clearing
the way for the year-round availability of E15,
the 15 percent ethanol fuel blend. He toured
the plant with SIRE CEO Mike Jerke and RFA
President and CEO Geoff Cooper.
In 2006, President George W. Bush spoke at
an RFA meeting in Washington. Fourteen years
later, he was interviewed by RFA’s Cooper at
the 25th Annual National Ethanol Conference.
Past RFA Chairmen HISTORIC U.S. ETHANOL PRODUCTION 13,800
Joseph T. Elvove, 1981-1982 16,000
Paul T. Burke, 1983-1984
W. Robert Schwandt, 1985 14,000
Art Stuenkel, 1986-1987
Lauren Hill, 1988 12,000
Linden Shepard, 1989
Million Gallons
Victor Shaio, 1990-1992 10,000
Jack Huggins, 1993-1994
Rich Jurgensen, 1995 8,000
John Parker, 1996
Ron Miller, 1997-2001 6,000
Gary Smith, 2002-2003
Bill Lee, 2004-2005 4,000
Ron Miller, 2006-2007
Chris Standlee, 2008-2010 2,000
Chuck Woodside, 2011-2012
0
Neill McKinstray, 2013-2014
2020*
2000
2004
2006
2009
2008
2005
2003
2002
2007
2001
2010
1990
2014
1994
2016
2019
1984
1996
1999
2018
2015
2013
2012
1986
1998
2017
1989
1995
1993
1988
1992
1985
1997
1983
1982
1987
Randy Doyal, 2015-2016
2011
1991
1981
Mick Henderson, 2016-2017
Neil Koehler, 2018-2019
Source: RFA and U.S. Energy Information Administration * Estimated
ESSENTIAL ENERGY 3
WEATHERING
THE PERFECT STORM
O ver the past several years, these pages have typ-
ically been replete with examples of record-set-
ting performance as the U.S. ethanol industry contin-
2021 offers an opportunity to turn the page. A vaccine
gives hope for a return to a more normal economic
environment. And a new Administration and Congress
ued its unprecedented growth. Such is not the case seemingly focused on reducing carbon emissions could
for 2020. As the global pandemic crushed gasoline provide exciting new market opportunities for renew-
demand here and abroad, demand for ethanol fell able fuels like ethanol both here and overseas.
precipitously. Annual U.S. ethanol production fell to
less than 14 billion gallons for the first time in seven The U.S. ethanol industry, led by the Renewable Fuels
years. At the height of the pandemic-induced market Association, is ready for the challenges ahead, what-
turmoil, more than half of the industry’s production ever they may be. More importantly, we remain poised
capacity was idled. From just March through Novem- to seize the opportunities the public discourse about
ber, more than 2 billion gallons of demand had been climate change will provide, building new domestic and
forgone, representing more than 700 million bushels global demand for ethanol’s Essential Energy.
of lost corn demand and revenue losses to the indus-
try of more than $3.8 billion.
U.S. ETHANOL PRODUCTION CAPACITY BY STATE
(Million Gallons per Year)
Exports of ethanol fell as well, as the combination of
lower world-wide transportation fuel demand and in- Existing Capacity Installed Biorefineries
creased protectionism drove exports to a disappointing Production Under Ethanol Under
Capacity Constr./ Biorefineries Constr./
1.3 billion gallons, a five-year low. While the decreased Expansion Expansion
demand caused by the pandemic is understandable, Iowa 4,593 - 43 -
the rising protectionism is inexcusable. U.S. government Nebraska 2,296 - 26 -
efforts to remove trade barriers in China, Brazil, and Illinois 1,867 - 14 -
elsewhere proved futile as countries chose to sacrifice Minnesota 1,384 - 19 -
consumer savings in favor of pleasing special interests. Indiana 1,337 - 15 -
South Dakota 1,223 - 16 -
Ohio 676 - 7 -
But the U.S. ethanol industry is nothing if not resilient.
Kansas 615 - 14 -
Despite the difficult market environment and the public
Wisconsin 603 - 9 -
health crisis, many ethanol plants not only survived,
North Dakota 542 16 6 1
but thrived. They added technology allowing them to
Texas 395 - 4 -
produce the high-purity ethanol used in hand sanitizer
Michigan 350 - 5 -
and expanded CO2 capture to meet the rising demand Missouri 287 - 6 -
for uses like producing dry ice for transport and storage Tennessee 237 - 3 -
of the COVID-19 vaccine. Indeed, while 2020 was one California 217 - 5 -
of the hardest years in the industry’s history, it may New York 165 - 2 -
also turn out to be the U.S. ethanol sector’s finest hour. Colorado 143 - 4 -
Ethanol producers were a beacon of hope for their Georgia 120 - 1 -
communities and the nation, responding to the crisis Pennsylvania 120 - 1 -
and stepping up to be part of the solution in Idaho 60 - 1 -
new and innovative ways. North Carolina 57 - 1 -
Arizona 55 - 1 -
Kentucky 50 - 2 -
Oregon 42 - 2 -
Virginia 2 - 1 -
TOTAL U.S. 17,436 16 208 1
Source: RFA
4 2021 ETHANOL INDUSTRY OUTLOOK
WA ME
U.S. ETHANOL MT ND VT
NH
MN
BIOREFINERIES ID WI MA
OR MI NY RI
BY STATE WY
SD CT
PA NJ
NE OH
MD
NV IA DC
DE
UT CO
IN WV
IL VA
MO KY
CA KS
WEEKLY U.S. ETHANOL INDUSTRY TN
NC
CAPACITY UTILIZATION AZ
NM OK AR SC
GA
MS AL
Percent of Annual Average Capacity
120%
LA
TX
100%
FL
80%
60%
Installed Ethanol Biorefinery
40% New Biorefinery under Construction
20%
0%
Jun 2010
Jun 2011
Jun 2012
Jun 2013
Jun 2014
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Jun 2019
Jun 2020
Source: U.S. Energy Information Administration
WEEKLY PRODUCT SUPPLIED OF
“The threat of climate change is a
FINISHED MOTOR GASOLINE
present and growing danger, and we
12,000
must promote sustainable agriculture
Thousand Barrels per Day
solutions that are economically via-
10,000
ble, ecologically just, and support the
8,000
social fabric of our rural communities.
6,000
Transitioning away from fossil fuels
4,000 toward ethanol and biofuels can create
2,000 jobs and foster economic opportuni-
Jun 2010
Jun 2011
Jun 2012
Jun 2013
Jun 2014
Jun 2015
Jun 2016
Jun 2017
Jun 2018
Jun 2019
Jun 2020
ties in our rural communities.”
– U.S. Rep. David Scott (D-GA), Chairman
Source: U.S. Energy Information Administration
of the House Agriculture Committee
ESSENTIAL ENERGY 5
ESSENTIAL FOR
THE ECONOMY
W hile the COVID-19 pandemic significantly re-
duced ethanol production in 2020, the indus-
try remains a major driver fueling the rural economy.
The demographic breakdown of the renewable fuels
workforce is significant, employing a higher percent-
age of female, older and unionized workers than the
Ethanol biorefineries continue to offer skilled jobs and petroleum industry. In addition, one out of five etha-
good wages in rural communities where attractive em- nol workers are veterans of the U.S. military; veterans
ployment opportunities are often hard to find. And the comprise only 6% of the national workforce.
industry continues to serve as an essential cog in the
agriculture sector’s economic engine, generating tens With COVID-19 vaccinations now underway, and as
of billions of dollars in economic activity. the economy rebounds, the outlook for 2021 is grow-
ing clearer: We expect to see the industry’s economic
In 2020, more than 62,000 U.S. jobs were directly impact and reach recover and pick up where we left
associated with the ethanol industry, which support- off in 2019.
ed an additional 242,600 indirect and induced jobs
across all sectors of the economy. The industry creat-
ed $18.6 billion in household income and contributed
$34.7 billion to the national Gross Domestic Product
(GDP). Moreover, the ethanol industry spent $21.4
billion on raw materials, inputs, and other goods
and services.
Ethanol’s Value-Added Proposition
Based on average prices and product yields in 2020,
a typical dry mill ethanol plant was adding approx- 2019 2020
imately $1.27 of additional value—or 37%—to every
Direct jobs 68,542 62,180
bushel of corn processed.
Indirect/Induced jobs 277,389 242,600
CORN VALUE OF OUTPUTS PER BUSHEL
COST PER
BUSHEL Ethanol..........................................$3.48 Household income $22.9 billion $18.6 billion
$3.42 Distillers Grains.............................$1.03
GDP contribution $42.8 billion $34.7 billion
Corn Distillers Oil..........................$0.18
TOTAL $4.69
6 2021 ETHANOL INDUSTRY OUTLOOK
Ethanol Industry Petroleum National Workforce
Fuels Industry (All Industries)
30% 24%
GENDER 47%
70% 53%
76%
ETHANOL Female
Male
INDUSTRY
WORKFORCE
55 AND
OVER
24% 20% 23%
DEMOGRAPHICS UNIONIZED 7% 2% 6%
MILITARY
VETERANS 19% 9% 6%
AVERAGE
HOURS/WEEK
40.0 42.0 34.5
Sources: Energy Futures Initiative, National Association of State Energy Officials,
U.S. Bureau of Labor Statistics
GROSS VALUE OF
U.S. ETHANOL
INDUSTRY OUTPUT
Ethanol Co-products
$45,000
$40,000
$6,428
$35,000
$16,596
Million Dollars
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
2020*
2000
2004
2006
2009
2008
2005
2003
2002
2007
2001
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Source: RFA based on U.S. Dept. of Agriculture data *Estimated
ESSENTIAL ENERGY 7
EXPANDING
GLOBAL DEMAND
T he United States remained the world leader in
ethanol production in 2020, despite the pandem-
ic-induced reduction in output. The U.S. saw its share
On the bright side, shipments to India increased ap-
proximately 15 percent, putting it roughly on par with
Brazil as the second-largest destination for U.S. ethanol.
of total global output decline slightly to 53 percent, Exports to Mexico doubled. The increased global de-
but we remained responsible for more than half of mand for industrial alcohol also helped buoy overall U.S.
worldwide production. Meanwhile, Brazil’s share of exports, as manufacturing of sanitizers and disinfectants
total world production rose slightly to 31 percent. increased.
U.S. ethanol exports were buffeted by a combination of U.S. ethanol imports in 2020 were on par with 2019
the impact of the global pandemic on fuel consump- levels, despite the cutback in U.S. fuel consumption.
tion and prices and by a further ratcheting up of trade Virtually all fuel ethanol imports entered the country in
restrictions. Exports fell 9 percent from 2019 to an esti- California, where Brazilian sugarcane-based ethanol has
mated 1.3 billion gallons. benefitted from both the state’s Low Carbon Fuel Stan-
dard and from premium values for “advanced biofuel”
Canada regained its position as the top destination for RFS credits, or RINs.
U.S. ethanol, taking one-quarter of U.S. exports. Howev- $2,330
er, exports to Brazil plunged more than 40 percent, as
a result of the pandemic’s impact on fuel consumption $3,000
and on-again, off-again turmoil surrounding the coun- $2,500
VALUE
Million Dollars
try’s tariff-rate quota. In December, Brazil let the tar-
OF U.S. $2,000
iff-free quota expire for good, resulting in a 20 percent
ETHANOL
tariff being assessed on all U.S. ethanol imports. $1,500
EXPORTS
$1,000
$500
-
U.S. ETHANOL EXPORTS 2015 2016 2017 2018 2019 2020*
AND IMPORTS
Sources: U.S. Dept. of Commerce, U.S.
Census Bureau, Foreign Trade Statistics
Exports Imports Net Exports *Estimated based on Jan.-Nov. 2020 data
1,800
1,600
1,400
1,200
Million Gallons
1,000
800
600
400
200
0
200
400
600
800
2020*
2000
2004
2006
2009
2008
2005
2003
2002
2007
2001
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Sources: U.S. Dept. of Commerce, U.S. Census Bureau, Foreign Trade Statistics
*Estimated based on Jan.-Nov. 2020 data
8 2021 ETHANOL INDUSTRY OUTLOOKTOP DESTINATIONS FOR
U.S. ETHANOL EXPORTS IN 2020
Canada
25%
E.U.
8%
U.S. South
Korea
8%
Mexico India
5% 15% Philippines
3%
Rest of Nigeria
World
Colombia
9% 3%
5%
Peru
Brazil
3% 15%
Sources: U.S. Dept.
of Commerce,
U.S. Census Bureau,
Foreign Trade Statistics
*Estimated based on 2020 GLOBAL ETHANOL
Jan.-Nov. 2020 data
PRODUCTION BY COUNTRY
(Country, million gallons, share of
global production)
European Union
Brazil 1,250; 5%
7,930; 31% China
880; 3%
India
480; 2%
Canada
United States 460; 2%
13,800; 53% Thailand
400; 2%
Argentina
230; 1%
Rest of World
500; 2%
Global ethanol production fell to 26 billion gallons
in 2020 as a result of the coronavirus pandemic.
The Unted States remained the largest producer,
accounting for over half of global output.
Source: RFA analysis of public and private data sources
ESSENTIAL ENERGY 9COPRODUCTS ON THE RISE
I f there was a silver lining to the COVID-19 pandemic
for U.S. ethanol producers, it was that the pandem-
ic brought focus to the fact that the industry makes Ethanol’s Livestock Connection
more than renewable fuel—a lot more.
In 2020, U.S. ethanol producers generated 33.1
One of the industry’s essential coproducts that typ- million metric tons (mmt) of distillers grains, glu-
ically flies below the radar, biogenic carbon dioxide, ten feed, and gluten meal. These bioproducts are
got lots of attention in 2020. CO2 is captured by valuable protein-rich substitutes for corn, soybean
about a quarter of our nation’s ethanol plants and is meal, and other ingredients used to feed beef and
used for everything from beverage carbonation and dairy cows, pigs, chickens, turkeys, fish, and other
meat processing to wastewater treatment and dry ice animals around the world. In addition, biorefineries
production. At full capacity, ethanol plants capture 3 extracted 3.3 billion pounds of corn distillers oil, a
to 3.5 million tons of CO2 annually, or roughly 40 per- $940 million market underpinning the production
cent of the national supply. With the pandemic came of biodiesel and animal feed.
fears that CO2 needs would not be met. And while
production did slip in 2020, the industry continued to
be a leading supplier. U.S. ethanol producers captured
2.3 million tons of high-grade biogenic CO2 for North
U.S. DISTILLERS
American food/beverage and industrial markets. 11,030
GRAINS EXPORTS
14,000
Thousand Metric Tons
12,000
10,000
U.S. ETHANOL INDUSTRY
8,000
COPRODUCT ANIMAL
6,000
FEED OUTPUT
605 4,000
Corn Gluten Meal
3,087 2,000
Corn Gluten Feed
29,437
Distillers Grains 0
2020*
2006
2009
2008
2005
2007
2010
2014
2016
2019
2018
2015
2013
2012
2017
45,000
2011
40,000
Sources: U.S. Dept. of Commerce, U.S. Census Bureau, Foreign Trade
35,000 Statistics *2020 estimated based on Jan.-Nov. 2020
Thousand Metric Tons
30,000
25,000 DISTILLERS GRAINS
20,000 PRODUCTION BY TYPE
15,000
10,000
Modified
Wet Distillers
5,000 Wet Distillers
Grains, 11%
Grains, 29%
0 Condensed
2020*
2000
2004
2006
2009
2008
2005
2003
2002
2007
Distillers
2001
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Dried
Solubles
Distillers
(Syrup), 3%
Grains with
Source: RFA and U.S. Dept. of Agriculture. Note: All co-products Solubles, 48% Dried
converted to 10% moisture basis *Estimated Distillers
Grains, 9%
Source: U.S. Dept. of Agriculture and RFA
10 2021 ETHANOL INDUSTRY OUTLOOKA DIVERSIFIED TRADE PORTFOLIO
U.S. biorefineries satisfied growing domestic animal
food needs while also exporting about a third of
distillers grains produced. In 2020, more than 50
countries purchased a cumulative 11 mmt of U.S.
distillers grains. Half of these exports landed in
Southeast and East Asia. Meanwhile nearly 20 per-
TOP DESTINATIONS FOR cent of total exports were shipped to Mexico, as the
country extended its position as our top distillers
U.S. DISTILLERS GRAINS grains customer for a fourth consecutive year.
EXPORTS IN 2020
Canada
4%
E.U.
4%
U.S. Turkey
7% South
Japan
Korea 4%
11%
Thailand
Mexico 8%
16% Vietnam
12% Philippines
3%
Indonesia
8%
Rest of
World
Sources: U.S. Dept. 23%
of Commerce,
U.S. Census Bureau,
Foreign Trade Statistics
*Estimated based on
Jan.-Nov. 2020 data
3,301
DISTILLERS GRAINS CONSUMPTION CORN DISTILLERS OIL
BY SPECIES PRODUCTION
4,000
Other, 1% 3,500
Poultry, 6%
3,000
Million Pounds
2,500
Swine, 2,000
15% Beef
1 ,500
Cattle,
47% 1 ,000
Dairy, 500
31%
0
2020*
2006
2009
2008
2005
2007
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Source: Distillers grains marketing companies Sources: U.S. Dept. of Agriculture and RFA *Estimated
ESSENTIAL ENERGY 11THE PANDEMIC PIVOT
T he spread of COVID-19 early in 2020 upended the
ethanol industry in ways that were previously un-
imaginable. At the peak of the crisis, in late April, more
than half of ethanol capacity was idled and less than
a quarter of the nation’s biorefineries were running at
full capacity.
At the same time, we saw the industry take on a new
look as unforeseen challenges and opportunities
arose, and new partnerships formed. Our nation’s eth-
anol producers rose to the occasion, and we saluted
our members for their community leadership. Per-
haps the greatest story for the year was how ethanol
producers around the country pivoted to produce
more high-purity alcohol for hand sanitizers and other
disinfectants.
Moving forward into 2021, we know a little of what
to expect: A slow and gradual return to whatever
“normal” will mean, punctuated with the threat of
new surges or other problems down the line. While
we don’t expect fuel ethanol production to reach
pre-pandemic normal quickly, we do expect the
increased demand for high-purity alcohol for
sanitizers to continue well into 2021.
RETAIL HAND $70 1600%
SANITIZER SALES,
$60 1400%
REPORTED WEEKLY
1200%
$50
Million Dollars
1000%
$40
800%
$30
600%
$20
400%
$10 200%
$- 0%
2/23/20
3/22/20
7/26/20
8/30/20
3/29/20
4/26/20
8/23/20
6/28/20
5/24/20
3/15/20
7/19/20
1/26/20
2/16/20
4/19/20
6/14/20
4/12/20
5/10/20
6/21/20
8/16/20
5/31/20
7/12/20
5/17/20
1/12/20
1/19/20
7/5/20
5/3/20
6/7/20
2/2/20
4/5/20
2/9/20
9/6/20
3/8/20
8/2/20
8/9/20
3/1/20
1/5/20
Dollar Sales (millions) Year-Over-Year % Change
Source: Information Resources, Inc.
12 2021 ETHANOL INDUSTRY OUTLOOKESSENTIAL ENERGY 13
EVOLVING POLICY
W ith a new Congress and new administration
settling in, Washington will undoubtedly have
a different look and feel in 2021. Throughout his cam-
take action without Congress may be in the cards
for our new president, as a key trend of the modern
presidency has been the increased use of executive
paign, President Joe Biden signaled that addressing orders.
climate change will be a priority, and he promised to
push policies that move the country toward achieving The new administration is likely to focus on rolling
net-zero carbon emissions from the power sector by back many of President Trump’s actions on energy
2035, and economy-wide by 2050. and climate, replacing them with new, ambitious or-
ders focused on reducing greenhouse gas emissions
But Congress may have other ideas. A severely dimin- with an emphasis on “environmental justice.” Other
ished Democratic majority in the U.S. House of Rep- top priorities, including the economy and healthcare,
resentatives and a narrowly divided Senate present a are likely to take precedence over sweeping legisla-
challenging federal landscape that the Biden admin- tive action to combat climate change.
istration team will need to navigate. Attempting to
KEY CABINET MEMBERS
USDA Secretary Tom Vilsack
• U.S. Dairy Export Council president and CEO, 2017-2020
• USDA secretary, 2009-2017
• Iowa governor, 1999-2007
• Strong supporter of ethanol and other renewable fuels
EPA Administrator Michael Regan
• NC Department of Environmental Quality secretary, 2017-2020
• Environmental Defense Fund, various roles, 2012-2016
• EPA staff on air quality and energy issues, 1998-2008
Energy Secretary Jennifer Granholm
• Michigan governor, 2003-2011
• Has previously supported renewable fuels
• Deeply knowledgeable about auto industry
14 2021 ETHANOL INDUSTRY OUTLOOKRFA’S FOCUS: FIVE POLICY AND
REGULATORY SOLUTIONS FOR 2021
AND BEYOND
Maximize the Low Carbon Benefits of the
“The Renewable Fuel Standard marks 1 Renewable Fuel Standard (RFS).
our bond with our farmers and our EPA’s failed implementation of the RFS under
commitment to a thriving rural the Trump administration resulted in numerous
missed opportunities for immediate greenhouse
economy. … A Biden-Harris Admin-
gas reductions, lower fuel prices, and decreased
istration will promote and advance petroleum imports.
renewable energy, ethanol, and other
Build Upon the RFS with New Low Carbon,
biofuels to help rural America and
our nation’s farmers, and will honor
2 High Octane Fuel Policies.
the critical role the renewable fuel While the RFS has created a durable policy
foundation for reducing GHG emissions from the
industry plays in supporting the rural transportation sector, complementary policies
economy and the leadership role could deepen and accelerate the decarboniza-
American agriculture will play in our tion of our nation’s transportation fuels.
fight against climate change.”
Optimize Vehicle Technologies for Low
3 Carbon, High Octane Fuels.
– Presidential candidate Joe Biden,
August 2020 Because fuels and vehicles operate as integrat-
ed systems, policy and regulation designed to
increase the consumption of more efficient low
carbon liquid fuels must be accompanied by
policies that compel or incentivize the
production and purchase of vehicles capable
of operating on those fuels.
4 Modernize our Nation’s Transportation
Fuel Infrastructure.
Rapid proliferation of low carbon liquid fuels
will require modest improvements to our
nation’s fuel infrastructure.
Renew and Reset Trade Relationships in
5 Key International Ethanol Markets.
Despite aggressive efforts by the U.S.
ethanol industry to expand international
market access, trade disputes with
several key markets for ethanol have
severely hamstrung U.S. export volumes.
Resetting trade relationships with China,
Brazil, Mexico and Colombia would help
remove new barriers and drive a return
to free and fair trade with these
countries and others.
ESSENTIAL ENERGY 15THE GOLD STANDARDS:
RFS & LCFS
S ince its inception in 2005, the Renewable Fuel
Standard has been a crucial driving force for cre-
ating marketplace opportunities for ethanol and other
The LCFS policy model already has a decade of suc-
cess in California, where ethanol has provided more
than 40 percent of the carbon reductions achieved
renewable fuels. While implementation of the statute under the program thus far. RFA has embraced the
by the U.S. Environmental Protection Agency has been idea of a national LCFS that works in conjunction with
inconsistent at best, the RFS has still provided the the RFS, not as a substitute for it.
foundation upon which U.S. ethanol producers have
built an Essential Energy industry. That’s why RFA Meanwhile, RFA enthusiastically welcomed the intro-
continues to protect and defend the RFS from the oil duction of the Next Generation Fuels Act in late 2020
industry’s endless attacks. by Rep. Cheri Bustos (D-IL). The bill would require an
orderly transition to high octane (98 RON) low carbon
In January 2020, the U.S. Court of Appeals for the fuels that would enable greater fuel efficiency and
Tenth Circuit ruled in RFA et al. v. EPA that the agency lower emissions. The RFA anticipates this effort to
had far exceeded its statutory authority in granting RFS gain momentum in 2021.
compliance waivers to oil refineries that were ineligi-
ble to receive them under the law. Joining RFA in the The RFS has provided a sound foundation and a na-
challenge were the National Corn Growers Association, tionwide LCFS or HOLC program could add substan-
the National Farmers Union, and the American Coalition tially to that success. For years to come, ethanol will
for Ethanol. The decision set an important precedent be critical to future climate strategies, making it truly
that should eliminate the rampant abuse of the small an Essential Energy.
refinery exemption program moving forward.
Indeed, we anticipate future implementation of the RFS
will be more consistent with the statute and will provide
the ethanol industry with the demand certainty intend-
ed by Congress.
SMALL REFINERY
Beyond creating new market opportunities for farmers, EXEMPTIONS
reducing our dependence on imported oil, and lower-
ing the cost of fuel to the consumer, the RFS has also
served as the only federal legislation requiring green- Granted (158) Rejected (88) Pending (65)
house gas emissions reductions from the motor fuels 3
2 2
sector. But with growing interest in reducing carbon 1
emissions, many are contemplating how best to build 4
13 13 3 4 3 2
upon the success of the RFS by exploring policies such
as a Low Carbon Fuel Standard (LCFS) or a High 7
Octane, Low Carbon (HOLC) fuel program. 18 16 35
17 32 30
24 23
19
15
8 8 7
2
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: EPA, as of 1/21/21
16 2021 ETHANOL INDUSTRY OUTLOOK“For the last three and a half years,
we have been forced to fight battle
after battle…to ensure our coun-
try is meeting the full potential
of biofuels. The Next Generation
Fuels Act looks toward the future
to make sure we bring an environ-
mental lens to biofuels production,
in order to increase demand while
reducing carbon emissions.”
– Rep. Cheri Bustos, D-IL
NEXT GENERATION
FUELS ACT
KEY PROVISIONS:
• Requires EPA to allow automakers to use a new 98 Research Octane Number (RON) fuel to
certify new vehicles for emissions and fuel economy, making 98 RON fuel available no later than
January 1, 2022.
• Requires octane sources used in the new 98 RON fuel to result in at least 30 percent fewer
greenhouse gas emissions than unblended gasoline, reducing emissions by at least 11 percent
compared to current regular gasoline. Establishes a clean octane standard by limiting the
aromatic hydrocarbon content of gasoline to an annual average of 17.5 percent by volume.
• Removes unnecessary and outdated regulatory barriers preventing more high octane, low
carbon blends from entering the market by ensuring all ethanol blends greater than 10 percent
receive the same Reid Vapor Pressure treatment as 10 percent and 15 percent blends.
• Requires automakers, beginning with the 2024 model year, to warrant vehicles for use on 98
RON fuel and ethanol blends up to and including 30 percent.
ESSENTIAL ENERGY 17ESSENTIAL FOR
CUTTING CARBON
T he rise of global temperatures and cataclys-
mic natural disasters and weather events, from
droughts to floods to wildfires, have hastened and
How does this work? Plants that are ultimately made
into renewable fuels absorb carbon dioxide from the
atmosphere as they grow, and that same amount of
intensified policy discussions around carbon’s role in carbon dioxide is re-released when the fuel is pro-
climate change. Everyone is looking for answers and duced and combusted in an engine. In this way, etha-
for decades, renewable fuels like ethanol have been nol and other renewables simply recycle atmospheric
part of the solution. State and federal agencies agree carbon. Even when the energy use and emissions
that grain-based ethanol cuts greenhouse gas emis- related to the full production process are accounted
sions significantly—by 35 to 50 percent compared to for, ethanol delivers significant GHG savings compared
gasoline. Emerging technologies promise to boost to the fossil fuels it replaces.
that reduction to around 70 percent in just the next
few years, according to USDA. And ethanol made from Further, by displacing hydrocarbon substances like
corn kernel fiber and other cellulosic feedstocks is aromatics in gasoline, ethanol helps reduce emissions
already delivering reductions of 80 percent or more. of air toxics, along with particulate matter, carbon
monoxide, nitrogen oxides and exhaust hydrocarbons.
With ethanol, we don’t have to wait and hope for ma- These pollutants cause smog and ground-level ozone
jor technological or economic breakthroughs; the fuel and adversely affect human health. Cutting these
is available now at a low cost to drive decarbonization emissions results in lower incidence of respiratory
of our liquid fuels. illness and asthma, heart disease, lung disease and
cancer—and ultimately fewer premature deaths.
62.13
CARBON 90
INTENSITY OF
Carbon Intensity (gCO2e/MJ)
85
STARCH-BASED
ETHANOL IN 80
CALIFORNIA 75
GASOLINE
70
65
60
55
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: RFA using California Air Resources Board data
18 2021 ETHANOL INDUSTRY OUTLOOKNew Studies Track Significant GHG
Emissions Reductions
Carbon Research from Environmental Health & Engineering
dioxide
absorbed Inc., released in late January, shows that greenhouse
by biomass gas emissions for ethanol are 32 percent to 62 per-
crops cent lower than gasoline, with a central best estimate
of 46 percent.
• The research, by scientists affiliated with Harvard
Biofuels
and Tufts universities in Massachusetts, delivers
Carbon a transparent, state-of-the-science assessment
Carbon
Carbon
in biomass on lifecycle analyses of corn starch ethanol in the
dioxide
converted
released as United States.
to liquid
Cycle
fuel burns
biofuel • The study credits recent efficiency improvements
and the adoption of new technologies for the
steady reduction in the lifecycle carbon intensity
of corn ethanol.
Liquid
• Importantly, EH&E’s assessment also shows that
biofuel
combusted carbon emissions from converting prior land uses
to power to corn farming make up only 7 percent of the
vehicle biofuel’s total GHG emissions—a much smaller
amount than generally recognized.
THE USE OF ETHANOL IN GASOLINE IN 2020 REDUCED Also in January, a study by Life Cycle Associates con-
CO2-EQUIVALENT GREENHOUSE GAS EMISSIONS FROM firmed that the Renewable Fuel Standard has result-
THE TRANSPORTATION SECTOR BY 47.3 MILLION METRIC ed in aggregate GHG reductions from the use of bio-
TONS. THAT’S EQUIVALENT TO REMOVING 10.1 MILLION fuels that exceed the EPA’s original projections. The
RFS, as expanded in 2007, has resulted in cumulative
CARS FROM THE ROAD FOR AN ENTIRE YEAR, OR ELIM-
CO2 savings of 980 million metric tons. This is due to
INATING THE ANNUAL EMISSIONS FROM 12 COAL-FIRED
the greater-than-expected savings from corn-based
POWER PLANTS.
ethanol and other biofuels and occurs even though
cellulosic biofuels have not met legislative targets. In
Source: RFA analysis using U.S. Dept. of Energy GREET model
addition, LCA research indicates GHG emissions from
petroleum are higher than the EPA baseline.
ESSENTIAL ENERGY 19ABOVE AND BEYOND E10
O ne refreshingly bright spot in the ethanol market
in 2020 was that, despite the pandemic-induced
reduction in fuel demand, market opportunities for E15
Ironically, as the infrastructure for E85 and other flex
fuels continues to grow, the number of flex fuel vehicles
being offered to consumers continues to fall. Only two
and flex fuels like E85 continued to grow. automakers—Ford and General Motors—are offering
FFVs in model year 2021, and just 11 models overall will
The number of gasoline marketers and retailers offering be available, with four available only to fleet purchasers.
E15 and E85 flex fuels increased steadily throughout That’s down from more than 80 different models from
the year. There are now more than 2,150 stations across eight manufacturers being available to consumers as
the country offering E15 and nearly 5,050 offering E85 recently as model year 2015. RFA continues to strongly
to consumers. That remarkable increase in E15 and flex advocate for more FFVs and fairness in how alternative
fuel infrastructure was largely driven by USDA’s Higher fuel vehicles are incentivized under fuel economy and
Blends Infrastructure Incentive Program, or HBIIP, which greenhouse gas regulations.
provides fuel retailers with the resources to empower
real fuel choice. As we look to the future and the need to address global
climate change in a more meaningful way, the need for
RFA worked directly with hundreds of marketers and vehicles and infrastructure accommodating higher level
retailers to encourage participation in this important ethanol blends will only increase. RFA will continue to
program and expand ethanol market opportunities. Ev- lead the way to assure that state and federal policies
ery applicant RFA helped through the HBIIP process— allow higher ethanol blends to lead the fight to reduce
three dozen companies with stations in 128 cities across carbon emissions, lower fuel prices, and provide more
22 states—was successful in securing grant funding! options at the pump for consumers.
Moreover, virtually all automakers now explicitly approve
the use of E15, and future growth opportunities for the
?
fuel appear almost limitless. BMW and Mini vehicles
even go a step further, as the manufacturer continues to
CAN
approve the use of E25 blends in all models. YOU
THE FOLLOWING MODEL YEAR 2021
VEHICLES ARE AVAILABLE AS
FLEX FUEL VEHICLES (FFVs):
Ford Explorer 3.3L
Ford Police Interceptor Utility 3.3L
Ford F150 3.3L
Ford F150 5.0L
Ford Super Duty (F250, F350) 6.2L
Ford Transit 3.5L
FLEET ONLY:
Chevrolet Silverado 5.3L
Chevrolet Silverado HD 6.6L
GMC Sierra 5.3L
GMC Sierra HD 6.6L
20 2021 ETHANOL INDUSTRY OUTLOOK900
MINNESOTA
AVERAGE 800
E15 SALES 700
Gallons/Station/Day
600
500
400
300
200
100
Source: RFA based on 0
Minnesota Dept. of
Oct-16
Oct-19
Oct-18
Oct-17
Jan-20
Jul-16
Jul-19
Oct-20
Jul-18
Jan-16
Jan-19
Jul-17
Apr-20
Jan-18
Jan-17
Jul-20
Apr-16
Apr-19
Apr-18
Apr-17
Commerce data
E15 APPROVAL STATUS FOR CONVENTIONAL E15 Approved by Automaker in ALL Models
E15 Approved by Automaker in SOME Models
LIGHT-DUTY VEHICLES E15 Approved by EPA only; NOT Approved by Automaker
MODEL YEAR : 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Market Share*
BMW Group**
BMW 1.9%
Mini 0.2%
Daimler Group (Mercedes-Benz) 2.3%
FCA (Chrysler, Dodge, Fiat, Jeep, RAM) 12.8%
Ford Motor Co. (Ford, Lincoln) 14.5%
GM (Buick, Cadillac, Chevrolet, GMC) 17.3%
Honda Motor Co. (Honda, Acura) 9.5%
Hyundai Motor Co. (Hyundai, Kia) 8.3%
Mazda 1.9%
Mitsubishi Motors Corp. 0.7%
Nissan Motor Co.
Infiniti 0.6%
Nissan† 6.1%
Subaru‡ 4.2%
Tata Motors (Jaguar, Land Rover) 0.7%
Toyota Motor Corp.
Lexus 1.9%
Toyota 12.3%
Volkswagen Group
Audi 1.3%
Porsche 0.4%
Volkswagen 2.2%
Volvo Car Group 0.7%
All Others 0.2%
* Internal combustion engine (ICE) models only
** Approves the use of up to 25% ethanol blends
† Approves the use of E15 in Rogue/Rogue Sport, Altima, Maxima, Versa & Titan. Approves the use of E10 in GT-R & NV Passenger/Cargo. Manuals not available to-date: Armada, Frontier, Murano, Pathfinder, Sentra & Z Coupe.
‡ Approves the use of E15 in Outback, Legacy, Impreza, Ascent & Crosstrek (2.0L engine). Approves the use of E10 in Forester & Crosstrek (2.5L engine). Manuals not available to-date: WRX/WRX STI & BRZ.
Sources: Auto manufacturer owner’s manuals, GoodCarBadCar.net
EXPANSION OF U.S. RETAIL STATIONS 2,150
5,040
2020 NATIONAL AVERAGE RETAIL PRICES
OFFERING E15 AND E85 FOR E10 & E85
E10 E85
E15 E85 $2.40
5,000
$2.20
Price per Gallon
4,000
No. of Stations
$2.00
3,000
2,000 $1.80
1,000 $1.60
0 $1.40
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Source: RFA based on data from E85prices.com
Source: RFA
ESSENTIAL ENERGY 21THE POWER OF OCTANE
T he need for ethanol as a clean, affordable source
of octane became even more apparent in 2020,
as the pandemic hit U.S. and global fuel markets.
Over the last 10 to 15 years, refiners have largely op-
timized their processes to reduce hydrocarbon-based
octane production to take advantage of ethanol’s
While the price of regular unleaded gasoline fell, the properties. Today, most regular gasoline in the U.S.
price of premium gasoline remained elevated, partic- is produced using blendstock with an octane rating
ularly at the retail level. As a result, the price spread of 84, which is then upgraded to a rating of 87 by
between premium and regular grades of gasoline adding 10 percent ethanol. This allows refiners to
spiked to the highest level in at least 25 years. increase throughput of hydrocarbon blendstock at
lower cost. Higher blends like E15 and E30 offer an
Ethanol’s blending octane rating of 114 AKI is signifi- even greater octane boost when blended on top of
cantly higher than the ratings of the competing pe- today’s regular gasoline.
troleum-based octane sources, the supplies of which
have become constrained in recent years. Additional- Ethanol’s octane boost provides a little fun in ad-
ly, aromatic hydrocarbons like benzene are toxic and dition to improving the quality of our nation’s fuel.
worsen air pollution. The Tuatara, a flex fuel vehicle manufactured by SSC,
became the fastest production car on the planet in
2020. It twice hit an average speed of 316 mph to
claim the title. The engine boasts 1,750 horsepower
when operating on high octane E85, and on one run it
hit 331 mph, breaking the top speed of a Bugatti!
22 2021 ETHANOL INDUSTRY OUTLOOKWHAT IS OCTANE AND WHY
IS IT IMPORTANT?
BLENDING OCTANE RATINGS OF VARIOUS
GASOLINE OCTANE BOOSTERS A fuel’s OCTANE RATING is the
114 measure of its ability to resist “knocking”
in the engine, which is caused when the
120
117
air/fuel mixture detonates prematurely
115
110 during combustion. According to the U.S.
110
107
Octane Rating
105
104 Department of Energy, “Using a lower
101
100
95
octane fuel than required can cause the
95 93
90 engine to run poorly and can damage the
85 engine and emissions control system over
80
84
75
time. It may also void your warranty.”
70
n-Butane
MTBE
Ethanol
Blendstock
Gasoline
Benzene
Methanol
Alkylate
Toluene
Xylene
Source: U.S. Department of Energy
PREMIUM GASOLINE: SHARE OF SALES AND PRICE
DIFFERENCE VS. REGULAR
Premium Share of Gasoline Sales
Premium Share of Gasoline Sales
Wholesale Price Spread: Premium vs. Regular
Premium and Regular Gasoline
Retail Price Spread: Premium vs. Regular
Price Difference Between
15% 40%
14% 35%
13%
30%
12%
11% 25%
10% 20%
9% 15%
8%
10%
7%
6% 5%
5% 0%
Source: Argus Media * Based on Jan.-Aug. 2020 data
ESSENTIAL ENERGY 23ESSENTIAL FOR
ENERGY SECURITY
I n 2020, several events threatened the security and
stability of U.S. energy markets. First came a “race-
to-the-bottom” crude oil price war between Saudi
If not for the role of ethanol in the nation’s fuel supply,
the U.S. would have had to import nearly 500 mil-
lion additional barrels of crude oil in 2020. Ethanol is
Arabia and Russia. Then in April, government restric- produced at approximately 200 facilities concentrated
tions and other precautions related to the pandemic in the U.S. Midwest—a secure source of fuel compared
caused U.S. ethanol and gasoline consumption to be to the Middle East—and just 1 percent of the ethanol
cut nearly in half. In response, WTI crude oil futures supply is imported. In short, ethanol is essential for
prices briefly turned negative for the first time energy security and, as 2020 showed, it provides resil-
in history. iency in tumultuous times.
Yet, over the course of the year, the U.S. remained
a significant net importer of crude oil. Over 40
percent of the oil processed by U.S. refineries came
from foreign sources in 2020. Notably, foreign crude
oil has accounted for a steadily increasing share
of the supply to refineries in California, the largest
gasoline-consuming state over more than two
decades.
U.S. CRUDE OIL TRADE
Imports Exports
300,000
275,000
250,000
225,000 Even though U.S. oil production has increased in recent years,
Thousand Barrels
our nation’s economy still transfers billions of dollars every
200,000
year to the OPEC cartel. In 2020 alone, the U.S. sent some
175,000 $13 billion—or $100 per American household—to OPEC
150,000 nations to pay for crude oil imports.
125,000 U.S. Spending on Crude
100,000 OPEC Nation Oil Imports (Billion $)
75,000
Saudi Arabia..................................................................... $7.4
50,000
Iraq..................................................................................... $3.1
25,000
0
Nigeria............................................................................... $1.2
Angola .............................................................................. $0.5
Sep - 2016
Sep - 2019
Sep - 2020
Sep - 2018
Sep - 2015
May - 2016
May - 2019
Sep - 2017
Jan - 2016
Jan - 2019
May - 2020
Jan - 2018
May - 2018
Jan - 2015
May - 2015
Jan - 2017
May - 2017
Jan - 2020
Kuwait............................................................................... $0.4
Libya................................................................................... $0.2
Other OPEC..................................................................... $0.3
While U.S. crude oil production and exports have
TOTAL............................................................................ $13.0
increased in recent years, our nation still imports
more than 150 million barrels per month.
Source: U.S. Dept. of Energy Source: RFA based on U.S. Dept. of Energy data
24 2021 ETHANOL INDUSTRY OUTLOOKHISTORIC OIL IMPORT DISPLACEMENT
BY ETHANOL
489
Million Barrels of Oil Displaced
700
600 543 564 569
525 558
494 507
500 471 468 471
400 387
330
300
231
200
100
-
2020*
2009
2008
2007
2010
2014
2016
2019
2018
2015
2013
2012
2017
2011
Source: RFA based on U.S. Dept. of Energy data *Estimated
SOURCES Domestic Production
OF U.S. CRUDE Imports
OIL SUPPLY
34%
66%
INPUTS Domestic Inputs
TO U.S. Imports
REFINERIES
42%
58%
Source: RFA based on U.S. Dept. of Energy and forecasts
ESSENTIAL ENERGY 25FROM FIELD TO FUEL
F or generations, ethanol has helped farmers and
others by adding value to corn at the same time
as it saves drivers at the gas pump. Henry Ford and
In DRY MILLING, the entire grain kernel is first ground
into meal, then slurried with water to form a mash.
Enzymes are added to the mash to convert starch
Alexander Graham Bell were among the first to recog- to sugar. The mash is first cooked, then cooled and
nize that the sugars found in plants could easily and transferred to fermenters. Yeast is added and the con-
inexpensively be converted into clean-burning renew- version of sugar to alcohol begins. After fermentation,
able fuel. Bell himself referred to ethanol as a “clean, the resulting “beer” (not the kind you might drink)
beautiful, and efficient fuel” more than a century ago. is separated from the remaining stillage. The ethanol
is distilled and dehydrated, then blended with about
Today’s industry uses state-of-the-art technologies to 2 percent denaturant (such as gasoline) to render it
produce ethanol and valuable coproducts from the undrinkable. It is then ready for shipment. The stillage
starches and sugars found in grains, beverage and is sent through a centrifuge that separates the solids
food waste, and cellulosic biomass. American farmers from the solubles. These coproducts eventually be-
themselves are often actively involved in many come distillers grains and corn distillers oil.
of these ethanol plants through ownership or
leadership roles.
Roughly 90 percent of U.S. fuel ethanol is produced
using the dry mill process, with the remaining amount
coming from wet mills. The main difference between
the two processes is in the initial treatment of the grain.
Grain Receiving and Storage Milling Cooking Liquefaction Fermentation
DRY MILL
ETHANOL
PROCESS
Dried Distillers Grains Dryer Bottling,
Dry Ice and
Distillers Other Uses
Grains to
Livestock
and Poultry Syrup Tank Evaporator Liquids
Distillers Centrifuge
Grains to Corn Distillers Oil
Market Distillation
Feed
Biodiesel
Wet Distillers Grains Solids
Denaturant
Ethanol to Market Ethanol Storage
Ethanol-Blended Molecular Sieve
Gasoline
to Consumer
Source: RFA
26 2021 ETHANOL INDUSTRY OUTLOOKU.S. ETHANOL
PRODUCTION BY
TECHNOLOGY
TYPE
Dry
In WET MILLING, the grain is first separated into its Mill
Wet Mill
10.6%
basic components through soaking. After steeping, 89.4%
the slurry is processed through grinders to separate
the corn germ. The remaining fiber, gluten and starch
components are further segregated. The gluten com-
ponent (protein) is filtered and dried to produce animal
feed. The remaining starch can then be fermented into
ethanol, using a process like the dry mill process.
Source: RFA based on
U.S. Dept. of Agriculture data
U.S. ETHANOL
PRODUCTION
CAPACITY BY
On average, 1 bushel of corn
(56 pounds) processed by a
FEEDSTOCK TYPE
dry mill ethanol biorefinery
produces:
n 2.9 gallons of denatured fuel ethanol Corn/Sorghum/
Cellulosic Biomass 3.7%
n 15.2 pounds of distillers grains animal feed Corn Starch
(10 percent moisture) 93.5% Corn/Sorghum 2.2%
n 0.8 pounds of corn distillers oil Cellulosic Biomass 0.4%
n 1.1 pounds of captured biogenic Waste Sugars/Alcohol/
carbon dioxide Starch 0.2%
In 2020, ethanol biorefineries captured
roughly 2.3 million tons of CO2, which was
used for dry ice production, bottling, food
processing, and other uses. Source: RFA
Source: RFA based on U.S. Dept. of Agriculture data
ESSENTIAL ENERGY 27ADVOCACY AND
ENGAGEMENT
W hat does it take to be respected and effective
in Washington? A strong technical foundation,
intelligent messaging with a broad reach, and mem-
Through RFA’s various committees, our member com-
panies direct the association’s technical, safety, market
research, and other priorities. And with regular interac-
bers and staff who are passionate and informed. Each tion at RFA Board meetings and the National Ethanol
year, the RFA testifies before Congress, takes part in Conference, RFA members stay abreast of the policy,
regulatory hearings, addresses complex technical and marketing, and technology developments that affect
scientific issues, educates consumers, argues in court, their bottom line. If past is prologue, the coming months
and speaks at countless national and international and years will bring dramatic change to ethanol policy
events. While some of this work was upended due to and marketing. Count on the RFA and its membership to
the pandemic, it did not stop us from finding new and continue to lead the conversation, develop the technical
different ways to accomplish RFA’s mission. underpinnings, and shape the message that will assure
future growth.
Our annual Washington board meeting took place virtu-
ally in July, allowing for an all-digital round of Capitol Hill
visits where our board got to hear from, and speak with,
Sens. Chuck Grassley (R-IA), Deb Fischer (R-NE) and
Dick Durbin (D-IL); House Reps. Cindy Axne (D-IA), An-
gie Craig (D-MN), Dusty Johnson (R-SD), Collin Peterson
(D-MN), Adrian Smith (R-NE), Roger Marshall (R-KS),
Rodney Davis (R-IL) and Cheri Bustos (D-IL). The event
also included Ambassador Gregg Doud, chief agricultur-
al negotiator at the Office of the U.S. Trade Representa-
tive; USDA Deputy Secretary Steve Censky; and
Anne Idsal, principal deputy assistant administrator
for the U.S. EPA.
Since 2009, RFA has co-sponsored the Iowa Science
& Sustainability Tour, which brings federal policy-
makers to Iowa for a hands-on experience with
today’s renewable fuels industry. Unfortunately, due
to COVID-19, this year’s tour was canceled so RFA
replaced it with a Virtual Heartland Tour that attract-
ed many congressional staff and other federal and
state decisionmakers. The event included a series of
educational videos on timely topics and Q&As with
farmers, ethanol producers and one of the country’s
top fuel retailers.
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