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Home > Renewable Energy > Ethanol Program > Impact of U.S. EPA Proposal to Cut Ethanol

Impact of U.S. EPA Proposal to Cut Ethanol


The U.S. Environmental Protection Agency (EPA) planned to lower the nation’s corn ethanol blending target in 2014 from 14.4 billion to 13 billion gallons.  This would reduce the U.S. ethanol production by almost 10 percent.

Minnesota is the No. 4 largest ethanol producing state in the U.S.  The proposed EPA reduction would negatively affect Minnesota’s ethanol industry as well as the state’s economy including industry output and employment.

The MDA conducted a preliminary assessment of the impact, and here are our findings:

Economic Impact of Corn Ethanol in Minnesota
As a result of the EPA proposed 1.4 billion gallon reduction in corn ethanol in 2014

Itemized Results Current
Level
Reduced
Level
Negative Impact
to Minnesota
Minnesota ethanol production (billion gallons) 1.1 0.97 -0.11
Minnesota corn use (million bushels) 404 355 -49
Dried Distillers Grain (DDG) production (million tons) 2.61 2.29 -0.31
Economic impact (billion $) $5.03 $4.42 -$0.61
Employment impact (# of jobs) 12,686 11,154     -1,532
Value-added processing (million $) $836.28 $735.31 -$100.97

In summary:

  1. Minnesota ethanol production would be reduced by 110 million gallons annually.
  2. Minnesota's corn use for ethanol would be reduced by 49 million bushels a year.
  3. Minnesota's DDG production would be down by 310,000 tons a year.
  4. Minnesota ethanol industry's total economic impacts would be reduced by $610 million a year.
  5. Minnesota could lose 1,532 jobs.
  6. Minnesota could lose $101 million in value-added processing a year.
For further information, please contact:

Su Ye, Chief Economist
651-201-6384
su.ye@state.mn.us