US ethanol capacity rose by 3pc before Covid: EIA

US ethanol output capacity as of January 2020 increased by 3pc to 1.13mn b/d year-on-year, according to the US Energy Information Administration's (EIA) 2020 US Fuel Ethanol Plant Production Capacity report.

The EIA reported 201 active plants as of January 2020, up by one compared with a year earlier.

Total midcontinent plants rose by two to 180, with the addition of a plant in South Dakota and another in Kansas. In the Rocky Mountain region the plant count fell by one to a total of four, with MMI — Etoh's Aurora, Colorado, plant — no longer listed. Plant numbers in the remaining regions were stable.

The data, which reflects total domestic ethanol production capacity as of the first day of the year, does not encompass the production losses suffered by the industry as a result of the Covid-19 pandemic.

US ethanol production plummeted in late March and April because of lower gasoline demand at the peak of the Covid-19 pandemic. Because most finished gasoline sold in the US is blended with 10pc ethanol, the drop in gasoline demand drove similar declines in ethanol demand, pressuring ethanol production.

Since the pandemic began affecting ethanol demand, at least one plant has permanently closed. Other plants still remain idle, with Pacific Ethanol saying last month in an earnings call that its fuel ethanol plants would remain off line until conditions improve. The company said it would expand its USP-grade ethanol production capacity. Other companies, like Green Plains, expect USP-grade ethanol demand to remain strong in 2021, chipping away at some fuel ethanol capacity.

As of 27 August, 137 out of 204 ethanol plants, or 67pc, were running at full capacity, according to separate records kept by the Renewable Fuels Association (RFA). Idled production accounted for 16pc of the industry, with the remaining 17pc operating at reduced capacity. Total plant capacity utilization was reported at 82.4pc.

By Thom Dwyer