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Friday, February 5, 2016

NCGA Focuses on Ethanol: Life-Cycle Analysis, Marketing Tactics

This past week Adam Andrews, KY Corn Programs Director, attended NCGA's Ethanol Action Team meeting in California. The State of California is very relevant to the viability of corn ethanol with nearly one-third of our nation's auto fuel utilization occurring there.  California has its own fuel standard, and scores fuels based on their calculated carbon intensity.  California EPA has designated CARB, California Air Resources Board, to approve, update and revise the methodology.

The Committee met in Sacramento, where CARB is headquartered. To gain the highest access to California fuel market, CARB analyzes individual fuel's life cycle, and develops a carbon index.  Permission to enter the market is granted based on those results, similar to a permitting system. The committee met with a regulator from CARB regarding corn ethanol's life cycle analysis, and submitted several items of consideration for improving corn ethanol's position within CARB's measurement.  "We hope this is the beginning of some very necessary and extensive dialogue between the Midwestern corn industry and CARB, a governing body whose viewpoint of corn based ethanol is vitally important to its acceptance and commercialization."
The committee also met with the CEO of Propel, a biofuels retail company. "Propel is a great success story for retail E85," said Adam.  Propel's business model is to approach existing fuel retailers and propose to add a separate fuel canopy.  These satellite fueling canopies are located on a retailer's property, but they are branded and owned by Propel.
"Propel has an astounding amount of knowledge about what makes consumers purchase E85, the fuel's growth potential, pricing strategy, etc.," said Adam.  "They have captured three times the percentage of flex fuel miles, compared to the rest of the country.  Propel is a  true testament to how to maximize your sales potential by learning the audience, creating a recognized brand, pricing appropriately and building  loyalty. We benefitted immensely from our conversation, and have taken back several tactics that will help us increase demand for ethanol in our region.  I'm excited about how we can implement these ideas to increase ethanol utilization east of the Rocky Mountains, and thus increase corn grind for Kentucky grain farmers."

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