Ethanol Sales Drop With Gas Prices, Producers Begin Making Hand Sanitizer

Photo: Sanford Health

Gasoline demand has declined by half due to the pandemic, and since ethanol is a component in 10% of all gasoline, so has ethanol demand dropped and so has its price, making it tough for the nation’s largest producers of the gasoline additive.  Since 40% of the country’s corn supply goes to make ethanol. the market decline has a negative ripple effect in farm country.  To offset a portion of the losses, some of the nation’s largest ethanol producers have switched to making hand sanitizer, even though it costs them.

Why This Matters:  President Trump because the administration is under pressure from the gas companies and refiners to lift the ethanol requirement altogether – something they had been doing often on a case by case basis in the past.  But corn producers are pulling out all the stops, pressuring Congress and the White House to keep the requirement in place because lifting them would “cause further harm to the U.S. economy, especially our most vulnerable rural communities.” The President had promised last fall new rules to increase the mandates for ethanol.  Since the pandemic began, approximately 100 ethanol plants across the midwest have shut down or slowed in recent weeks.

From Ethanol to Hand Sanitizer

One of the nation’s largest ethanol producers has redesigned its plants to make pharmaceutical-grade hand sanitizer, according to CNBC.  Its CEO, Jeff Broin, said “It takes some retrofitting,” says Broin. “That’s underway, literally working around the clock.”  It is expensive to convert ethanol production facilities to make hand sanitizer because the alcohol has to be “further distilled to meet pharmaceutical grade standards, then it needs to be mixed with other ingredients to make hand sanitizer.” Then it has to be bottled, which is not something they had done before.  And even as gasoline prices rise again, the company plans to stick with making hand sanitizer.  Broin told CNBC that it could eventually provide as much as 5% of income. “I think the demand for hand sanitizer will increase over time,” Broin says. “People need to stay safe.”

At first, the company donated much of the hand sanitizer to health care workers but now they are starting to make retail and web sales of the product. “Frontline workers are facing risks every day to keep our communities safe from COVID-19, and we all need to do our part. At POET, we saw an opportunity to help our community while living our mission – to be good stewards of the Earth by converting renewable resources to valuable goods – and created an all-natural ethanol-based sanitizer product. Bio-based products, like the sanitizer we’re donating today, are a safe, affordable solution for our community’s everyday needs from fuel for our cars to sanitizer for our families” Broin said in a statement.

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