Apr 21, 2020

Coronavirus Shuts Down Ethanol Plants

Beer and seltzer affected as COVID-19 (coronavirus) shuts down CO2 production

industrial water

Dwindling supplies of carbon dioxide from ethanol plants are sparking concern about shortages of beer, soda and seltzer water. 

Ethanol, which is blended into the nation’s gasoline supply, has seen production fall sharply due to the drop in gasoline demand as a result of the COVID-19 (coronavirus) pandemic, according to the New York Times. Gasoline demand is down by more than 30% in the U.S.

34 of the 45 U.S. ethanol plants that sell carbon dioxide (CO2) have idled or cut production, according to Renewable Fuels Association Chief Executive Geoff Cooper.

As a result, the lack of ethanol output is disrupting this corner of the food industry, as brewers and soft-drink makers use carbon dioxide for carbonation, which gives beer and soda fizz. 

Moreover, CO2 suppliers to beer brewers have increased prices by about 25% due to reduced supply, reported Bob Pease, chief executive officer of the Brewers Association. 

These small and independent U.S. craft brewers get about 45% of their CO2 from ethanol producers.

“The problem is accelerating. Every day we’re hearing from more of our members about this,” said Pease.

He expects brewers to start cutting production in two to three weeks as well.

According to an Apr. 7 letter to Vice President Mike Pence, the Compressed Gas Association (CGA) said production of CO2 had fallen about 20% and could be down by 50% by mid-April without relief, said CGA CEO Rich Gottwald in the letter. 

Orion Melehan, CEO of LifeAID, a specialty beverage company, said two of his production partners are looking for alternative CO2 sources, reported the New York Times. A spokeswoman for National Beverage Corp., which produces LaCroix, said the company sources from a number of national CO2 suppliers and does not anticipate a supply issue.

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