The biofuels industry is the most significant sector of the US carbon dioxide (CO2) supply chain, as a function of the number of operating CO2 plants using this by-product feedstock. On a plant percentage basis versus other source types, ethanol (biofuels) represent over 40% of this grand total; therefore, ethanol is absolutely vital to the health of the merchant CO2 sector.
Over the years, there have been shortages of CO2 product from certain ethanol sources, caused by a shortage of corn, which was often driven by drought, and the lack of sufficient corn planted due to flooding. All of this sounds familiar through the prism of climate change. With the flooding which occurred last year, there are concerns surrounding inadequately planted corn fields, where such fields often remained covered with flood water. Further on the biofuels front, since the tariffs began, there were a number of ethanol plants which had to shutter due to a lack of shipments to China.
While tariffs, and flooding last planting season, are reasons for concern, the industry continues to operate relatively well, and most of what the CO2 industry has invested in ethanol remains in place. Further, most of the relatively recent CO2 plant startups have occurred from operating ethanol by-product, that being in California and Oregon, and of course these are from long existing ethanol plants.
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