Ethanol producers help produce hand sanitizer to combat COVID-19

By Erin Voegele | March 23, 2020

The U.S. government on March 18 relaxed regulations to allow producers of fuel ethanol and beverage alcohol to shift production to ethanol-based hand sanitizers. Days later, several ethanol plants are taking action to help combat COVID-19.

The U.S. Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued guidance on March 18 announcing that it is waiving provisions of internal revenue law with regard to distilled spirits, and is providing certain exemptions and authorizations to distilled spirits permittees who wish to produce ethanol-based hand sanitizers to address the demand for such products during the COVID-19 emergency.

The agency said it is exempting alcohol fuel producers and distilled spirits producers from the requirement to obtain additional permits or bonds to manufacture hand sanitizer or to supply ethanol for use in the manufacture of hand sanitizer to other TTB permittees who are authorized to receive such distilled spirits. Alcohol fuel producers and distilled spirit producers must continue to keep records of their operations, including any undertaken as authorized under this exemption, the TTB said.

The authorization applies to hand sanitizer products consistent with World Health Organization guidance. “All TTB-permitted [distilled spirits permittees] (including [alcohol fuel producers] and beverage [distilled spirits producers]) may manufacture hand sanitizer products that are comprised of denatured or undenatured ethanol, glycerol (not less than 1.45 percent of the finished hand sanitizer product on a volume basis), and hydrogen peroxide (not less than 0.125 percent of the finished hand sanitizer product on a volume basis), without first obtaining formula approval from TTB,” said the agency in the guidance. Industrial alcohol user permittees may also use denatured ethanol to manufacture hand sanitizer consistent with WHO guidance without first obtaining formula approval. TBB said it is also exempting industrial alcohol user permittees from the requirement to request approval from TTB to increase the quantities of denatured ethanol that they may procure.

The TTB said the guidance is currently in effect through June 30, but could be extended at a later date.

Aemetis Inc. announced on March 20 that its 65 MMgy ethanol plant in Keyes, California, has begun shipments of 200 proof alcohol for use in the production of hand sanitizer. “Aemetis is moving quickly to help address the significant demand for hand sanitizer products in light of the COVID-19 pandemic during this time of national emergency,” said Andy Foster, president of Aemetis Advanced Fuels Keyes Inc. “As the WHO and CDC strongly recommend the use of hand sanitizer products to help prevent the spread of Coronavirus, Aemetis is utilizing our ethanol production capability to address the current shortage of hand sanitizer by increasing the supply of high-proof alcohol used in the manufacturing of  sanitizer products.”

Green Plains Inc. is also providing ethanol for use in hand sanitizer. The company announced on March 23 it has donated industrial alcohol to the Nebraska Department of Correctional Services for use in the production of hand sanitizer. The donated product is made at Green Plains’ facility in York, Nebraska, that currently produces 50 million gallons of 200-proof industrial ethanol annually. Once the hand sanitizer is produced at NDCS, it will be given to high priority facilities impacted by COVID-19.

“It has never been more imperative for Green Plains employees to help support local communities and do our part in mitigating the spread of COVID-19,” said Todd Becker, president and CEO of Green Plains. “With a severe shortage of hand sanitizer, donating our industrial ethanol to the state of Nebraska is the least we could do in this challenging environment.”

Also on March 23, the Iowa Renewable Fuels Association announced that ethanol producer Absolute Energy and biodiesel producer Western Iowa Energy have donated ethanol and glycerin to the state of Iowa to be used by Iowa Prison Industries to produce hand sanitizer. The IRFA said it worked with Iowa Prison Industries to secure shipment of these products and other necessary ingredients. The finished product will be distributed free of charge by the state of Iowa for priority use.

“The whole country is working tirelessly to slow the spread of the novel coronavirus and Iowa biofuels producers are proud to help anyway we can,” said Monte Shaw, executive director of the IRFA. “We applaud Absolute Energy and Western Iowa Energy for stepping up in the best way they could to help with this effort, as well as the other biofuel plants who stand ready to help if additional production is needed.”

The IRFA said it notified Iowa Gov. Kim Reynolds office early last week that Iowa biofuel producers would be willing to help with hand sanitizer production if needed and her team worked hard to help ensure the project’s success.

“Governor Reynolds and her team deserve credit for making this happen,” Shaw said. “Even during this time of emergency, a number of regulatory technicalities crossing multiple federal agencies stood in our way. Thanks to the efforts of staff in Governor Reynolds’ and Senators Chuck Grassley and Joni Ernst’s offices, we were able to overcome these hurdles that could have otherwise prevented this production of much-need hand sanitizer. Knocking down these barriers will have impacts beyond Iowa. In fact, we already know other states have heard about Iowa’s project and are working with their biofuel producers to implement similar programs.”

Reynolds briefly discussed the hand sanitizer project during a press conference she held March 20. “At our department of corrections, we will be producing hand sanitizer,” she said, noting that ethanol plants within the state will shipping denatured alcohol down to the department of corrections. “It’s really been incredible the number of businesses that have reached out to say ‘what can we do to be helpful during this really, really critical time?’” she said.

Additional information on the TTB public guidance, including guidance on related tax issues, is available on the agency’s website