Trump Helps Corn Farmers with Ethanol Fuel Rule

ethanol fuel

For the past few weeks, America’s breadbasket in the Midwest has been struggling. Poor weather has hampered the planting season for farmers of corn, soybeans, wheat, and other agricultural commodities.

Many farmers are thinking of giving up altogether on the planting season, opting out instead to pursue crop insurance policies and in the promise compromising next years crop. In the midst of this crisis, prices for these goods have surged.

On Friday, however, the Trump admini Newstrated gave a gift to Midwest farmers after curtailing an ethanol fuel rule, helping prop up demand for corn in particular.

The American government is now allowing a higher blend of corn ethanol into their U.S. petrol supply, despite the fact it would hollow out other parts of their national renewable fuel goal plan.

By letting year-round sales of petrol containing up to 15 percent ethanol (E15), as opposed to the regular 10 percent, the move would help appease both the biofuel lobby as well as corn farmers, who have been struggling over the past month in particular.

However, the most also draw the ire of the oil refining lobby, which promised a lawsuit in response to the move from the Environmental Protection Agency (EPA), as the group stands to lose significant market share for its petroleum fuels as a result of this ruling.

Biofuels as a whole have been a controversial issue in Washington since Congress first expanded the renewable fuel mandate in 2007. At the same, the nation failed to see an increase in ethanol consumption due to a stagnant petrol demand, a lack of advanced biofuel technology alongside other factors.

However, EPA administrator Andrew Wheeler signed an action that has allowed the unrestricted sale of E15. “As President Trump promised, EPA is approving the year-round sale of E15 in time for summer driving season, giving drivers more choices at the pump,” said Wheeler in a statement. Agriculture experts have already responded to the development with a sigh of relief. “Year-round E15 will also provide a badly needed long-term demand boost for our industry and America’s farmers, who face a number of daunting challenges today,” added Geoff Cooper, president of the Renewable Fuels Association.

Oil refiners, however, have responded by saying that the EPA lacks the legal authority to make such a decision. Many, such as Chet Thompson, president of American Fuel and Petrochemical Manufacturers, went on to say that their group would file a lawsuit against the EPA to overturn the rule.

Regardless, the US biofuel industry has struggled in recent years, partially related to actions from the Trump administration. Despite approving the E15, the EPA has previously granted a number of exemptions to smaller oil refineries that pared them from following biofuel blending rules, driving down demand for ethanol.

U.S. ethanol was also one of the biggest targets of China as a result of the recent tensions between Beijing and Washington. The country raised its tariffs on U.S. ethanol to 70 percent, effectively shutting down the exporting market as China plans to introduce its own E10 fuel in the near future.

Regardless, this is a good move for the biofuel industry as a whole alongside corn farmers. Ethanol over is expected to process 5.5 billion bushels of corn, over one-third of the total crop.