End of an Era

Minnesota to pay final state incentives
By Kris Bevill | May 13, 2011

Minnesota will pay the final round of state ethanol producer payments to nine facilities in the next year. The legislative approval of approximately $13 million in funds marks the end of an incentive program that was launched in the mid-1980s. “It basically is the final chapter in the story,” says Ralph Groschen, senior marketing specialist at the Minnesota Department of Agriculture. “This program allowed Minnesota to build a dozen ethanol plants that were farmer cooperatives and is what really got the ball rolling for other plants. Without this program, we wouldn’t have the ethanol industry we have.”

The incentive program was initially set to expire in 2010, but budget troubles led to paying only 13 cents for each gallon produced in 2004-’07, rather than 20 cents per gallon, deferring the rest. Plants constructed after 2010 do not qualify and some of the first plants have closed, Groschen says, so the money approved in this year’s agriculture bill should bring the balance owed to zero.

Minnesota’s initial goal was to establish an industry with an operating capacity of 200 MMgy, providing 10 percent of the state’s transportation fuel needs. “And now we have 1.1 billion gallons of capacity in the state,” Groschen says. “I think most people are thinking, ‘Mission accomplished. Let’s go on and do other things now.’” He says the state is ready to invest in other biofuel projects, such as cellulosic ethanol and renewable diesel. “Something to carry on this legacy of new ways to add value to Minnesota agriculture commodities,” he says.  —Kris Bevill