Sanitizer Confusion Gives Ethanol Makers New Governmental Target

(Bloomberg) -- U.S. ethanol makers have in the past targeted much of the ire at the Environmental Protection Agency. Now, another U.S agency is in the beleaguered sector’s cross hairs.

The U.S. Food and Drug Administration is giving conflicting guidance on how to produce and package hand sanitizer, according to Geoff Cooper, president and chief executive officer of trade group Renewable Fuels Association. That’s key at a time when ethanol makers have shifted from producing alcohol for fuel to making it for hand sanitizer.

About half of U.S. ethanol production was shut off as states instituted stay-at-home orders in March due to the coronavirus. That curbed drivers, crushing fuel demand and forcing the pivot.

“FDA is making this far more confusing and difficult than it needs to be,” Cooper told journalists on a conference call. Cooper added that any gains from sanitizer demand would represent only a “drop in the bucket” for demand losses from fuel.

The FDA did not immediately respond to an emailed request for comment.

The EPA, which sets targets for how much renewable fuels are mixed into the U.S. fuel supply, had exempted some oil refiners from using corn-based ethanol. Those exemptions meant the U.S. ethanol sector was struggling even before Covid-19 hit.

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