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Ethanol Industry in “Free-Fall”

The ethanol industry is in an economic free-fall as fuel demand drops because of the COVID-19 outbreak. 

Governments around the world are urging or requiring their citizens to stay home as a means to help control the spread of the coronavirus. 

The Capital-Journal says as more and more individuals stay home, the demand for ethanol-blended gasoline continues to drop. 

The pandemic hit the ethanol industry at a time when it was already struggling because of poor market conditions. 

The industry had already endured a trade war with China, a glut of oil production that sent ethanol prices tumbling, as well as waivers from the Environmental Protection Agency that helped refineries use less ethanol. 

“The important context here is that a lot of the ethanol industry was hanging on by a string before the coronavirus hit,” says Brian Jennings, CEO of the American Coalition for Ethanol. “We’re seeing unprecedented demand destruction and 2020 is likely going to be a bloodbath for the industry.” 

The market upheaval has put thousands of ethanol jobs in jeopardy. 

It’s also hurt the pocketbooks of the tens of thousands of farmers who provide the corn that ethanol plants use to make the biofuel and its byproducts like dried distillers grains. 

The per-gallon price paid to ethanol producers dropped 37 percent from February to March.


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