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Even though the Midwest is far from any oceans, the marine industry came up multiple times at one of the largest biofuels policy conferences in the U.S. last week.
“There are massive new markets out there that are looking for the very solutions that renewable fuels have to offer,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association, which organizes the annual event. “The marine industry represents an 80 billion gallon a year opportunity.”
Shaw said renewable fuels have been “stuck in neutral,” pointing to three years of stagnant ethanol production in Iowa, along with a ten-year low for biodiesel.
Iowa, the top-producing state for both biofuels, also leads in corn bushels and comes in second for soybeans after Illinois. But most farmers who grow these crops have production costs outpacing commodity prices.
A trade war with China last year shrank U.S. exports of soybeans. Farmers also face higher interest rates and input costs, including fertilizer. But Shaw highlighted a longer-term issue with supply and demand.
“The supply of corn is growing at three to four times faster than our domestic demand for corn,” he said.
A recent study prepared for the Iowa Corn Growers Association and Iowa Renewable Fuels Association predicts the gap will continue growing unless farmers and processors can access new and emerging markets.
Dave Miller, chief economist of the company that prepared the study, said during a press call that allowing the year-round sale of E15 would help.
Most states cannot sell E15 – a gasoline blended with 10.5% to 15% ethanol – from June to September without temporary emergency waivers due to air pollution regulations, which biofuel leaders say are outdated.
Madeleine Charis King
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Iowa Public Radio
Replacing the lower-blend E10 with E15 across the U.S. could close the demand gap for corn by 2031, Miller said. But he warned the gap could continue to grow again soon after.
“E15 is not an efficient long-term solution,” Miller said. “It is a near-term solution that is very powerful, but at the long run, we need to be able to take and access two great big markets that exist.”
Those two markets include sustainable aviation fuel, which represents a 35 billion gallon per year market, according to the study. Marine fuel is more than twice as much.
A ‘massive opportunity’ for biofuels
The UN International Maritime Organization has a target of eliminating greenhouse gas emissions by roughly 2050. To get there, large cargo ships would need to transition from emission-heavy bunker fuel to cleaner options, which could include ethanol or biodiesel.
Groups like the International Chamber of Shipping and World Shipping Council have expressed support for the Net-Zero Framework. If passed, the global agreement would require ships weighing 5,000 tons or more to cut their emissions or pay fines. The proceeds would go into a fund to reward low-emission ships, support research and help developing countries.
Rachel Cramer
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Harvest Public Media
Zoltán Szabó is secretary general for Climate Ethanol Alliance, which spans the US, Europe, Brazil and Asia. At the conference in Iowa, Szabó said the shipping companies are largely on board “as long as there is a level playing field.”
“They just want to have a stable regulatory environment,” Szabó said. “They have invested in their ships. They will invest in the upcoming technologies.”
Szabó emphasized the global agreement is a “massive opportunity” for renewable fuels produced in the U.S., especially ethanol. He said ethanol has a low carbon intensity score and would be cheaper than paying the cost of compliance.
But Szabó said that opportunity is “slipping away.”
Over 100 countries last October were set to take a final vote on the Net-Zero Framework when the U.S. threatened sanctions, visa restrictions and fees if they supported the measure.
Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy said in a joint statement:
“President Trump has made it clear that the United States will not accept any international environmental agreement that unduly or unfairly burdens the United States or harms the interests of the American people.”
The U.S., Russia and several other countries voted in favor of a motion to delay the vote until this fall. The motion narrowly passed with some countries absent or abstaining.
“We have only one task … to turn this opposition into at least a neutral position, but a supportive position would be even better,” Szabó said.
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.
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