AEM Testimony Last Week Supports Ethanol

Tampering with the Renewable Fuel Standard (RFS) could stunt growth in the agriculture industry, AEM told the U.S. Environmental Protection Agency (EPA) at a hearing on December 5, 2013.

“The recently proposed EPA standard to drastically reduce the amount of renewable fuel blended into our fuel supply threatens future demand for agriculture equipment by adding uncertainty and discouraging investment in equipment designed to collect the biomass needed for second-generation fuels,” said Nick Yaksich, AEM vice president, government and industry relations.

Yaksich joined more than 50 other members of the Fuels America coalition to testify at an EPA public hearing on the 2014 RFS program. The EPA’s proposal would lower the amount of biofuel required under the RFS mandate by 1.39 billion gallons.

“We are optimistic about the market potential represented by the continued development of an advanced biofuels industry,” Yaksich stated. “Because of the market-driving force of the RFS, several advanced biofuels projects are set to begin or ramp up production in 2014. Their operation should drive investment in new equipment purchases.”

He noted that based on these developments, AEM believes demand for ag equipment – specifically 200 balers used to collect biomass for cellulosic ethanol production – will be created next year.

“This infant market is valued at $25 million,” Yaksich said. “And if the RFS is left intact, by 2022 we believe this market will grow to 14,000 balers worth $2.1 billon.”

Equipment needed to support the balers and additional agriculture production related to ethanol production would increase the market potential for ag equipment to over $4 billion because of advanced biofuels, he pointed out.

“Our industry is excited about the opportunities presented by an advanced biofuels sector. However, tampering now with the RFS could cause an exodus of investment capital which could permanently stunt growth in the agriculture industry,” Yaksich concluded.

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