ADM, POET May Bolster Ethanol, Other Biofuel Capacity with USDA Support

Researched by Industrial Info Resources (Sugar Land, Texas)--Archer Daniels Midland Company (NYSE:ADM) (Chicago, Illinois) and POET LLC (Sioux Falls, South Dakota) each are expected to receive $50 million from the U.S. Department of Agriculture (USDA) to cover losses at a combined 45 facilities that were negatively affected by market trends during the COVID-19 pandemic. The aid is part of a $700 million package to support 195 U.S. biofuel facilities that had to cut production or fully close. Industrial Info is tracking more than $1.2 billion worth of active projects from ADM and POET, including activity at plants involved in the production of ethanol and other biofuels.

The USDA estimates producers of ethanol and other biofuels sustained losses of as much as $3.7 billion from demand destruction amid the COVID-19 pandemic. The industry continues to see problems crop up: In a recent quarterly earnings-related conference call, ADM executives acknowledged position losses on the company's ethanol inventory--following price declines early in 2022--drove lower results when compared with the same period last year.

Despite these headwinds, ADM and POET are cautiously pursuing expansions and improvements at some of their biofuel production facilities. ADM is preparing to begin construction on an expansion of its wet corn mill and ethanol production plant in Marshall, Minnesota, which produces 50 million gallons per year of ethanol. ADM also started construction in April on the replacement of a corn extractor at its corn mill and ethanol plant in Clinton, Iowa, which it expects to wrap up this summer.

Click on the image at right for a heat map of expansions and improvements at ADM and POET's biofuel production facilities, from Industrial Info's Geolocator tool.

ADM is considering further improvements to its Clinton facility, including upgrades to its wastewater treatment and a new carbon capture and sequestration (CCS) system. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can read detailed project reports on the Marshall plant expansion and the corn extractor, wastewater and CCS projects at the Clinton plant.

POET is at work on a series of upgrades and replacements at its ethanol plant in Lake Crystal, Minnesota, which produces 56 million gallons per year, and is evaluating a proposed carbon-capture and liquefication unit. Subscribers can read detailed reports on the upgrades and carbon-capture projects.

POET announced in May it will reopen its bioprocessing facility in Cloverdale, Indiana, which the company credited, in part, to the Biden administration's decision to lift restrictions on E15, a 15% bioethanol blend, in an attempt to reduce soaring gasoline prices. POET says it plans to invest $30 million in new technology to create "operational efficiencies" at Cloverdale and increase its annual production rate from 80 million to 95 million gallons of bioethanol. Subscribers can read more in Industrial Info's plant profile.

ADM and POET also are building and expanding plants that produce material commonly used as feedstocks for ethanol and other biofuels. ADM started construction in October on the Green Bison soybean processing plant in Spiritwood, North Dakota, in a collaboration with Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio). ADM and Marathon say the facility will process up to 150,000 bushels of soybeans per day, and supply vegetable oil as a feedstock for Marathon's renewable diesel refinery in Dickinson, North Dakota, which produces up to 75 million gallons of renewable diesel annually.

The Green Bison facility is scheduled to be completed in the third quarter of 2023, in time for the harvest. Subscribers can learn more from Industrial Info's project report on the Green Bison plant, and a detailed plant profile for the renewable diesel refinery in Dickinson.

The $700 million program doubles what the USDA gave to the biofuel industry last year as part of another aid package, also aimed at helping farmers recover from COVID-19's demand destruction.

Subscribers can click here for a full list of active ADM and POET projects in Industrial Info's GMI Project Database, and click here for a full list of projects at the companies' biofuel production facilities.

Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.