Bad news abroad for biofuel makers

Source: By RYAN MCCRIMMON, Politico • Posted: Thursday, January 9, 2020

With help from Adam Behsudi

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Quick Fix

— China is calling off an ethanol expansion that could have boosted demand for American biofuel exporters, another setback for the U.S. sector that is still dealing with domestic challenges.

— Canadian vaccine researchers this month will launch work on African swine fever as the deadly disease continues to decimate Chinese hog herds. The U.S. and Canada have been closely coordinating their efforts to keep ASF out of North America.

— New York will launch a statewide effort to crack down on the rise of superbugs that are resistant to antibiotics, including stricter oversight of the drugs used in livestock feed.

HAPPY THURSDAY, JAN. 9! Welcome to Morning Ag, where your host is hungry for one of these 7-Eleven breakfast pizzas. Send tips to rmccrimmon@politico.com and @ryanmccrimmon, and follow us @Morning_Ag.

Driving the Day

BAD NEWS ABROAD FOR BIOFUEL MAKERS: China is hitting pause on its plans to implement a national 10 percent ethanol mandate as the country’s corn supply has dwindled and biofuel production remains limited, Reuters reports.It’s a big blow to Chinese ethanol producers — but it’s also a setback for U.S. exporters who were hoping to tap into rising Chinese demand for the fuel.

“This is definitely a step in the wrong direction, but it was not completely unexpected,” said Geoff Cooper, president of the Renewable Fuels Association. “But even if implementation of the E10 target is delayed, we believe ethanol consumption will continue to grow in China as the government looks for low-cost ways to reduce air pollution in urban areas.”

By the numbers: The U.S. exported about 20 percent of its fuel ethanol to China in 2016, worth $300 million in sales. But those exports have dried up amid President Donald Trump’s trade war with Beijing, which retaliated with steep duties on the U.S. biofuel. China was expected to increase its U.S. ethanol exports under the “phase one” trade agreement that Trump and Chinese officials are aiming to sign next week.

Big picture: The corn and ethanol sectors are still unhappy about the Trump administration’s biofuel policies, namely its extensive use of blending waivers for oil refiners, which have depressed the domestic market.

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