Since January 1994, the North American Free Trade Agreement (or NAFTA) has regulated trade between the United States, Canada, and Mexico. In 1994, bioenergy may have been on our radar, but it was far from being commercially developed. As a result, even though NAFTA did provide benefits to farmers of plants used for biofuel production, it did not cover the bioenergy industry to the extent our current needs require.
Significant progress has been made in developing and ratifying an updated international law, the United States-Mexico-Canada Agreement (or USMCA Trade Agreement). On December 19, the US House of Representatives voted 385-41 to pass USMCA, putting this new legislation a significant step closer to complete ratification. While the provisions of USMCA are well beyond the scope of this article, experts anticipate a positive impact on the bioenergy industry in North America.
Bioethanol is a fuel made from today’s organic waste product instead of fossil remains. The most common plant used for bioethanol production in the US is corn, but bioethanol can also be produced from a variety of plants including wheat, grain sorghum, barley, potatoes, sugar cane, sweet sorghum, and even algae. Bioethanol is blended with conventional fuel to create cleaner-burning blends of fuel for vehicles.
With more structure in place to address the specific needs of the industry, positive effects will first be felt by the agricultural sector that provides the raw material for bioethanol production. The National Corn Growers Association has provided support for USMCA because they feel this new legislation will solidify a $4.56 billion export market of corn between the three countries thus providing US farmers more confidence in investing in their crops. This is great news for the Midwest, as Iowa alone has about 87,000 farms that will be on more stable ground with the new legislation in place.
According to Growth Energy CEO, Emily Skor, “This is welcomed news for U.S agriculture and biofuel producers across North America,” said Skor. “We have a rich history of trade with Mexico and Canada, and the USMCA strengthens that vital economic bond between our three nations. This was no easy feat, so we thank our champions in Congress and the administration for their tireless efforts to secure its approval and for pursuing much-needed economic opportunities for rural Americans.”
Want to learn more about how the biofuel industry is changing to better support your energy needs?
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