Gov. Walz creates Minnesota biofuels council to help ethanol industry

As Minnesota ethanol producers are being hammered in a weak market, Gov. Tim Walz Monday announced the creation of a biofuels council to help the industry out of its funk.

Walz signed an executive order creating the 15-member Governor's Biofuels Council, which will be made up of representatives from the agriculture, biofuels and transportation industries, as well as from environmental and conservation groups.

The U.S. ethanol industry is being battered by a combination of adverse federal regulatory action — waivers on ethanol use by small oil refineries — and the U.S. trade war with China. Those crimps on demand have come after the industry built out its production capacity over the past few years. Ethanol prices are at multiyear lows.

Ethanol producers, some spilling red ink, have cut back production or idled plants in recent months. Earlier this month, Corn Plus, a farmer-owned cooperative in Winnebago, became the first Minnesota ethanol plant to be shuttered during the current turmoil.

Minnesota is the nation's fourth-largest ethanol-producing state with 18 operating plants. The state is also a national leader in ethanol consumption.

The governor's council will be commissioned to create a report advising Walz — chairman of the national Governors' Biofuels Coalition — and his cabinet on to how to expand the use of biofuels and increase their carbon efficiency, Walz's office said. The state council will also look at using biofuels as part of the state's goal to reduce greenhouse gas emissions in transportation.

Walz's executive order mandates that the bio­fuels report be completed by November 2020.

Walz and South Dakota Gov. Kristi Noem, vice chairwoman of the national coalition, this month wrote a letter to President Donald Trump asking him to stem the number of waivers granted to the small oil refineries.

Mike Hughlett • 612-673-7003