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An estimated 1 billion gallons of ethanol demand could be eliminated if EPA follows through offering refinery waivers.

Jacqui Fatka, Policy editor

January 13, 2021

5 Min Read

With less than one week before President-elect Joe Biden’s administration takes over, the Trump Administration and EPA Administrator Andrew Wheeler reportedly could be considering a last-minute flood of waivers for the oil industry for blending requirements under the Renewable Fuel Standard.

The Trump administration’s EPA issued an unprecedented number of these waivers—prompting the 10th Circuit Court of Appeals to rule that the EPA “overstepped” on some exemptions and saying the agency needs to reconsider some of them. The U.S. Supreme Court will hear the case in April, but that won’t be soon enough for any action this administration tries to take in its final days.

A joint statement from the Advanced Biofuels Business Council, Fuels America, Growth Energy, the National Biodiesel Board, the National Corn Growers Association, the National Farmers Union, and the Renewable Fuels Association condemned the rumors.

“Reports indicate that the EPA is considering a last-minute flood of oil industry waivers, along with other regulatory favors, that would sabotage the rural recovery and shatter this administration’s promises to supporters across the heartland. There is no justification for President Trump, Andrew Wheeler, and their allies to award a massive, short-sighted handout to oil companies at the expense of farm communities,” the groups state.

The forthcoming waivers would reportedly apply to some exemptions for the 2019 compliance year. There are currently 32 pending petitions for the 2019 compliance year. RFA President and CEO Geoff Cooper says the industry could be facing the “nightmare scenario” they’ve feared with another 20 to 24 waivers involving 1 billion gallons of ethanol demand.

The action would come at a time when many facilities truly are on the brink. “We’ve seen demand decimated from COVID-19, and now for EPA to dump more exemptions on us is unbelievable that could happen, but by all accounts, it appears Mr. Wheeler may be appearing to do that,” Cooper says. The RFA says it will file a legal challenge to any new small-refinery exemptions EPA issues going forward, the group announced in a letter to EPA Administrator Andrew Wheeler Tuesday.

“While no one benefits from months of economic uncertainty, if the EPA opts to follow this disastrous course, we would expect the Biden administration to act quickly to reverse the damage and put lost gallons back on the market,” the groups state.

Cooper says if the outgoing EPA administrator goes through with the granting these remaining waiver petitions, he expects from his conversations with the incoming Biden administration that they would look to reallocate those lost volumes.

“What we’ve heard from the Biden camp, all the way back to the campaign, Mr. Biden was saying these refinery exemptions are unjustified and clearly eroding demand,” Cooper says. And he remains encouraged since then in conversations with the transition team, that those are commitments the transition team intends to honor.

Stephanie Batchelor, vice president of BIO’s Industrial and Environment Section, adds: “This action by the outgoing administration is beyond egregious. More than ever, as we look to improve the public health of our nation and build a 21st-century green economy, we must support the development of sustainable fuels to clean up our air and bring back jobs. BIO will work closely with the Biden administration and Congress to restore the integrity of the RFS and build off of this policy to establish a national low-carbon fuel standard that will foster green energy breakthroughs and decarbonize transportation.”

Senators weigh in on biofuels support

Sens. Chuck Grassley, R-Iowa, and Joni Ernst, R-Iowa, joined their colleagues from the Midwest, Sens. Roger Marshall, R-Kan., Mike Rounds, R-S.D., Deb Fischer, R-Neb., Roy Blunt, R-Mo., and Josh Hawley, R-Mo., in sending a letter to Wheeler urging him to avoid making any decisions on small refinery exemptions until after the Supreme Court rules in the Renewable Fuels Association et. al. v. EPA case.

“Ethanol and biodiesel plants that are already struggling to cope with the economic fallout of the COVID-19 are at risk of closing their doors, cutting off key markets for farmers. Many biofuel plants have already been forced to shutter their doors over the past four years… Granting additional SREs at this time would be inconsistent with the unanimous Tenth Circuit ruling in Renewable Fuels Association et. al. v. EPA. We therefore implore you to summarily freeze any decisions on the pending SREs until the Supreme Court has ruled,” the members concluded.

A group of Democratic senators wrote the incoming Biden administration to take bold actions to restore RFS policy. Senators include Sen. Tammy Duckworth, D-Ill., Amy Klobuchar, D-Minn., Tina Smith, D-Minn., Tammy Baldwin, D-Wisc., Debbie Stabenow, D-Mich., and Richard J. Durbin, D-Ill.

In part, the senators wrote: “The outgoing administration undermined the RFS, which was designed to reduce greenhouse gas emissions from the transportation sector, diversify our fuels, strengthen our national security and drive economic opportunity in America’s heartland. It is critical that the integrity of this policy be restored, and that biofuels be part of your efforts to combat climate change and reduce greenhouse gas emissions from the Nation’s largest emitting sector.”

Specifically, the senators called on the Biden administration to direct EPA to reject pending Small Refinery Exemptions by applying the 10th Circuit Court’s decision nationwide, publish Renewable Volume Obligations swiftly, approve pending pathway applications for corn kernel fiber ethanol, update EPA’s biofuels emissions modeling and include biofuels when reaffirming our nation’s commitment to the Paris Climate Accord. 

Emily Skor, CEO of Growth Energy, says, “From swiftly publishing RVOs to rejecting SREs, this letter outlines the actions the Biden Administration needs to take to fulfill its campaign promises to rural America and make quick progress on their environmental and energy goals.” 

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About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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