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NEW YORK — The U.S. Department of Agriculture (USDA) will give $700 million in aid to biofuels producers as part of a package to assist industries recovering from the financial devastation of the coronavirus pandemic, officials said on Tuesday.
Biofuel groups had been advocating for relief after the pandemic slashed fuel demand and sank consumption of biofuels like ethanol. The USDA said it plans to implement the aid in the next 60 days.
“USDA is honoring its commitment to get financial assistance to producers and critical agricultural businesses, especially those left out or underserved by previous COVID aid,” said Agriculture Secretary Tom Vilsack in a statement.
The Renewable Fuels Association welcomed the news.
“This assistance comes at a critical time, as ethanol producers are still struggling to recover from COVID-related market losses and are now facing historically high feedstock costs,” said Geoff Cooper, RFA president. “Many plants remain offline or are operating at reduced output rates.”
Margins to produce ethanol in the U.S. Corn Belt have risen to 16 cents per gallon, slightly higher than 13 cents per gallon during the same time last year, Refinitiv Eikon data showed.
Ethanol production has risen to about 1.1 million barrels per day, up from about 837,000 bpd a year ago, Energy Information Administration data showed.
The biofuels aid is part of a package that also supports groups including timber harvesters and dairy farmers. (Reporting by Stephanie Kelly; Editing by Aurora Ellis)