ANDERSON — Officials with POET Biorefining in Alexandria are monitoring the ongoing trade dispute between the United States and China, which has resulted in significant tariffs on U.S. ethanol shipments to that country.

POET employs more than 40 people in Madison County and, according to the company’s website, the local plant consumes more than 21 million bushels of corn annually to produce about 68 million gallons of ethanol.

Ethanol has been at the center of a months-long trade dispute between the United States and China, and the fallout appears to be reaching producers in the Midwest.

A report from Radio Iowa says ethanol plants in that state and elsewhere in the Midwest are expected to scale back production drastically in the coming weeks. According to the report, one executive cites oversupply and the trade dispute with China as the two main reasons for the draw-down in production.

The Environmental Protection Agency’s Renewable Fuel Standard (RFS) program, which has provided small refinery exemptions to Exxon, Shell, Mobil and other oil companies, has also contributed to a decline in demand, according to DeLayne Johnson, CEO of Quad County Corn Processors. The RFS limits the amount of ethanol refiners are required to blend into gasoline.

“While the historic weather and trade tensions overseas are certainly impacting ethanol production across the industry, the real challenge we’re facing is the unprecedented number of small refinery waivers issued by the EPA," a POET spokesperson said. "Because of these waivers, demand for biofuel has dropped more than 2.61 billion gallons and demand for corn has dropped more than 900 million bushels. We need the EPA to turn around this corrupt practice to get farmers back on track.”

Three other ethanol plants nationwide have closed permanently.
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