​Leading US ethanol producer Poet is producing hand sanitiser at two of its plants following the collapse of ethanol prices due to a drop in demand for fuel caused by COVID-19 shutdowns, CNBC reported on 7 May.

South Dakota-based POET had re-engineered systems in two of its plants to make pharmaceutical grade hand sanitiser.

However, in a blow to ethanol producers who had been investing in the sector, Reuters reported that the Trump administration had tightened restrictions on the use of ethanol in hand sanitiser, citing safety concerns.

The crackdown on hand sanitiser was aimed at protecting consumers from potentially dangerous impurities but could worsen shortages during a period of high demand during the COVID-19 pandemic, Reuters said.

Limits on certain chemicals permitted in alcohol-based hand sanitisers had been issued by the US Food and Drug Administration (FDA) on 15 April as the health crisis had deepened and more manufacturers had registered to produce hand sanitiser.

Since then, source told Reuters that the FDA had notified several ethanol companies that their product did not meet safety standards, forcing them to halt production and cancel supply agreements.

In one case, according to an email exchange seen by Reuters, the FDA said it had found significant levels of the carcinogen acetaldehyde in ethanol supplied by a company for use in hand sanitiser.

On a more positive note for US ethanol, AgriCensus reported on 7 May that a rebound in demand for fuel had raised hopes of a rapid recovery in the market. US Energy Information Administration (EIA) data had shown the first climb in ethanol production rates for nine weeks to 598,000 barrels/day, while stock levels had continued to decline and production margins rallied.