01/12/2023
Corn....and America. Several years ago (Renewable Fuel Standard (RFS2) in the Energy Independence and Security Act of 2007), the US gov't created a scheme whereby farmers would receive tax subsidies if they grew corn to feed the growing number of ethanol factories. The goal was to make ethanol to blend into fuel at a rate of 10% by volume. Oops! Farmers ploughed under 7.3 million acres of marginal land and dumped a sh*tload of fertilizer onto the soil to take advantage of this corn growing scheme. These 7.3 million acres were the home to migratory birds, bees, animals etc... Effective now, the corn scheme is being halted. It looks like farmers will be told to grow "biomass grasses" which are more environmentally friendly. The leaves and stems of the grasses will be processed slightly differently than the corn - the net result will be cellulosic ethanol. Easier said than done. The chemistry is complex. All of this could have an impact on the US craft distilling industry. As ethanol factories transition to making cellulosic ethanol, there could be a supply disruption. This will boost prices of the remaining stocks of corn ethanol. Craft distillers will be forced to pay more ($$) if they are sourcing corn ethanol to make their vodkas ( Hello Tito's Vodka...). The other unknown is the purity of the cellulosic ethanol. Will it be even get GRAS (Generally Regarded As Safe) approvals for human intake from the USFDA? Here in Canada we might even be affected. The ethanol factory in Unity, SK uses wheat as its feedstock. I do believe the factory in Tiverton, ON does likewise. But, a large percentage of this Canadian ethanol finds its way into the US fuel blending market. As the export market dries up, will these Canadian factories be able to survive? Stay tuned to this story....it is going to be fascinating.