NEW YORK – POET, the largest biofuels producer in the United States, is in discussions with Flint Hills Resources to acquire the entirety of Flint Hills’ ethanol assets, both companies told Reuters on Thursday.
The deal would increase POET’s potential production capacity for ethanol by more than a third to 3 billion gallons per year, said Jessica Sexe, a spokeswoman for POET.
That could help the company tap into potential growth in the biofuels market as the Biden administration considers boosting biofuels as part of a broader strategy to decarbonize the nation’s economy to fight climate change.
Both Sexe and Jake Reint, spokesman for Flint Hills, declined to put a price on the deal.
Flint Hills, a refining, biofuels and petrochemical company, is based in Wichita, Kansas, and is currently the fifth-largest ethanol producer in the United States. Its biofuels division includes six ethanol plants with a combined capacity of about 800 million gallons per year, 1.5 million tons of distillers grains and about 200 million pounds of corn oil, Reint said.
Both companies are privately held.
The discussions come after a hard year for the ethanol industry because of the coronavirus pandemic, which sank demand for fuel. Ethanol’s top market is for use in blending with gasoline, something required under U.S. law.
Corn oil can also be used to make renewable diesel. Investments to make renewable diesel have surged over the last year and have set off a scramble to find feedstock.
POET, headquartered in Sioux Falls, South Dakota, operates across seven states, making products such as ethanol, renewable food-grade carbon dioxide and high-protein animal feed.
The deal, in addition to boosting ethanol capacity, would lift POET’s potential production of high-protein animal feed to 14 billion pounds annually, and increase its production of corn oil to 975 million pounds annually, Sexe said.
