A lot can happen in a year — and a lot’s happened in the renewable fuels sector in 2020. At the 2021 Iowa Renewable Fuels Summit, which was held virtually, keynote Emily Skor, CEO at Growth Energy, a biofuels trade association representing producers and ethanol supporters, outlined some of the major developments in 2020 — and a few new developments on the horizon.
“Today, we’re ready to hit the ground running in a new year and under a new administration. With vaccines making the rounds and motorists returning to the roads, the future is brighter,” Skor said.
“President Biden and Vice President Harris campaigned and won on a promise to promote biofuels,” she added. “We look forward to working with this White House to ensure they keep those promises and restore strength to the rural economy while addressing our country’s climate goals.”
While COVID-19 disrupted supply chains in various sectors of agriculture, it did highlight the role biofuels and coproducts play in the supply chain.
“There’s also a new awareness that we are the source for everything from high-quality hand sanitizers and disinfectants to the carbon dioxide for dry ice needed to transport vaccines,” Skor said. “COVID showed that America’s ethanol industry is not only essential, but an unsung hero in the effort to eradicate the virus.”
Victories, next steps
Skor noted the biofuels industry won a major battle toward the end of the Trump administration, when EPA announced it would deny gap-year small-refinery exemption petitions that had been filed by oil refineries to work around a January 2020 ruling by the 10th Circuit Court of Appeals. That ruling determined EPA could not extend exemptions to any small refinery whose earlier temporary exemptions had expired. However, Skor added, “We haven’t yet won the war.”
“There are still 65 small-refinery exemptions sitting at EPA, and we won’t let up until the SRE [small-refinery exemption] pipeline is shut down just as the 10th Circuit Court intended,” she said. “The next step is for this EPA to finally restore markets that should have never been destroyed in the first place, a process that includes restoring 500 million gallons of demand as ordered by the courts all the way back in 2017.”
Skor also called for swift action on renewable volume obligations for 2021, providing producers and the supply chain with the certainty needed to invest and grow, as well as an equally aggressive approach to issuing blending targets for 2023 and beyond.
“Of course, the RFS is only one leg of the stool when it comes to driving demand. Done right, the RFS still has more gallons of demand to deliver,” she said. “We cannot afford to walk away from those gallons, but to be clear, the RFS will not be the vehicle that drives the step change we need in domestic ethanol demand. For that, we must take the bull by the horns and make higher blends the commercial success nationally that we know they can be.”
Skor also discussed ongoing efforts to expand and open new markets for E15.
“We did make progress last year. 2020 was the worst fuel market in 30 years,” Skor added. “Retailers across the board suspended capital investment, but E15 sites grew 10%. E15 is now available at more than 2,300 locations. Magellan [Midstream Partners] just made pre-blended E15 a house recipe at its terminals, which means lower costs and higher returns for our retail partners. This also reduces the barriers to entry among smaller and midsized operators because they don’t have to blend on-site.”
In 2020, Growth Energy announced it had secured nearly $30 million in grants under USDA’s Higher Blends Infrastructure Investment Program to help facilitate increased sales of higher biofuel blends. These grants cover more than 290 sites, selling 400 million gallons of gasoline annually. Skor also lauded bipartisan efforts like the Clean Fuels Deployment Act, which authorizes grants to incentivize the deployment of fueling infrastructure for ethanol and biodiesel.
However, Skor noted these efforts aren’t limited to expanding higher blends domestically, but internationally as well.
“Canada is our largest ethanol trading partner. Mexico could be an ethanol fuel market to rival California, offering a 1.2 billion-gallon opportunity,” she said. “And that is just our neighbors to the north and the south. A nationwide transition to E10 in Mexico, Canada, China, India, Japan and Indonesia would create a combined potential of 7.6 billion gallons of new ethanol demand.”
Additional efforts include pushing for swift approval of EPA pathways for advanced biofuels, including those made from corn kernel fiber.
A seat at the table
And, under a new administration with more focus on reducing carbon emissions and restoring air quality in low-income and minority communities, Skor said biofuels have a key role to play — and it’s important that biofuels have a seat at the table.
“There’s no silver bullet to decarbonizing the transportation sector, but growing the share of renewable biofuels and our fuel supply can and will accelerate our transition to a healthier zero emission future and reduce our dependence on fossil fuels,” she said. “We’ve seen it in California where biofuels like ethanol have generated more than 75% of the carbon savings achieved under the state’s decade-old low-carbon fuel standard.”
“The latest landmark study [released Jan. 26] by an adjunct professor at Harvard shows ethanol’s carbon intensity score is 46% lower than gasoline’s and, importantly, shows a twenty-fivefold improvement on land-use change,” Skor added. “Better, accurate models also offer an opportunity to showcase the benefits unlocked by innovations in agricultural practices, like reduced tillage, use of cover crops and continued ethical plant innovation. I know Iowa RFA and Iowa Corn are working hand in hand to give these techniques the credit they deserve.”
Skor noted the benefits of expanded availability of higher blends at the pump.
“Just a simple move to E15 would reduce our carbon dioxide emissions by more than 20 million tons. That’s the equivalent of taking 4½ million cars off the road,” she said. “There is no path to a net zero future without homegrown biofuels. Any effective climate plan must include plant-based ethanol. That’s the message we’ve pushed with presidential candidates in Iowa, including President Biden, and it’s the message we’re delivering to key constituencies in the new administration on the Hill and in the climate movement.”
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