By Stephanie Kelly
NEW YORK (Reuters) – U.S. lawmakers on Tuesday introduced a relief bill that would include aid to biofuel producers after demand for the fuel plummeted because of the coronavirus pandemic, causing mass shutdowns in the industry.
The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from January 1 through May 1. It is not clear whether the bill as proposed will be passed into law.
Eligible producers would receive 45 cents a gallon for fuel produced during the January-May period, according to the bill. If a facility was unable to make fuel during one or more months during the period, the producer would receive 45 cents multiplied by 50% of the number of gallons produced from year-ago levels.
The proposed assistance to the biofuels industry follows pleas by trade associations and lawmakers. As governments ordered residents to stay at home to curb the virus’ spread, demand for gasoline fell, dragging biofuels along with it.
U.S. laws require that refiners blend biofuels into the nation’s fuel pool or buy credits from those that do.
Around half of the industry’s capacity is offline, and about 150 ethanol facilities have idled or cut rates, according to the Renewable Fuels Association.
“The Renewable Fuel Reimbursement Program represents a potential lifeline for the 350,000 men and women whose jobs depend on a healthy and vibrant ethanol industry,” said RFA President Geoff Cooper.
(Reporting by Stephanie Kelly; Editing by Dan Grebler)
