U.S. biofuel industry may depend on Agriculture Secretary Perdue for aid, senator says

NEW YORK (Reuters) - The U.S. biofuel industry may have to depend on Agriculture Secretary Sonny Perdue for aid, Senator Chuck Grassley of Iowa said on Tuesday, after Senate Republicans unveiled a coronavirus relief package without specific appropriations for the industry.

FILE PHOTO: Chairman Sen. Chuck Grassley, R-Iowa, speaks as U.S. Trade Representative Robert Lighthizer appears at a Senate Finance Committee hearing on the Trade Policy Agenda on Capitol Hill in Washington, D.C., U.S., June 17, 2020. Andrew Harnik/Pool via REUTERS

A provision of the $1 trillion HEALS Act, introduced by Senate Republicans on Monday, would make available $20 billion to Perdue to provide support for agricultural producers, growers and processors impacted by the coronavirus. The bill, however, does not designate the funds more specifically.

“We’re in a position of depending on the Secretary of Agriculture if this $20 billion goes to him, getting some of it for ethanol,” Grassley said on a call with reporters on Tuesday.

After lockdown orders to curb the spread of the new coronavirus tanked fuel demand this spring, more than half of the ethanol industry’s production capacity shuttered. Under U.S. law, biofuels, which can be made from crops like corn and soybeans, must be added to the nation’s fuel mix.

The slowdown in the nation’s economy hit biofuel producers and farmers alike, raising calls across the Farm Belt for government relief.

Grassley added that he spoke to Vice President Mike Pence and Perdue separately over the last week about relief for the biofuels industry.

Grassley and Senator Joni Ernst, also from Iowa, had been working to add aid for the biofuels industry into the relief package.

Ernst has reached out to the White House to discuss the need for relief for the biofuels industry, Ernst’s office said.

Biofuel groups expressed concern about the lack of specificity in the bill’s language.

“While Senator (Mitch) McConnell’s bill is more specific about processors of ag commodities, it still leaves discretion to USDA (the U.S. Department of Agriculture) which has so far failed to use the authority to support our industry,” said Brian Jennings, chief executive of the American Coalition for Ethanol.

“The next critical step in a final agreement between House and Senate is to provide additional certainty around the nature of biofuel industry relief to ensure our producers have access to this much needed assistance,” said Emily Skor, chief executive of Growth Energy.

In May, House Democrats passed a coronavirus relief bill that included aid for biofuels producers.

Reporting by Stephanie Kelly; Editing by Bernadette Baum and Tom Brown