The decline in demand for ethanol and biodiesel has been a double blow to farmers already dealing with depressed prices for corn and soybeans because of trade wars with China and other countries.

Since taking office, President Donald Trump’s administration has granted 85 waivers to oil refineries, exempting them from using 4 billion gallons of renewable fuel. The Renewable Fuel Standard (RFS) is a federal law requiring the oil industry to blend a certain amount of biofuel into the nation’s gasoline and diesel fuel supply each year, but it does allow exemptions.

The small-refinery exemptions granted by the U.S. Environmental Protection Agency have destroyed demand for 1.4 billion bushels of corn used to make ethanol. For biodiesel, total gallons lost through waivers is 365 million gallons, about equal to Iowa’s yearly biodiesel production. The waivers are a significant blow to Iowa, where a good share of the corn and soybeans farmers grow is used to make renewable fuel. The waivers have resulted in nearly 30 U.S. ethanol and biodiesel plants closing either temporarily or permanently due to falling demand. Four are in Iowa.

Disappointed in EPA’s plan

After months of pressure from farm groups, the biofuel industry, members of Congress and governors of farm states, Trump announced on Oct. 4 plans to require oil refineries to replace the ethanol and biodiesel gallons lost through the exemptions. However, 11 days later when EPA released the proposed rules, farmers and renewable fuel supporters were outraged. EPA’s plan didn’t reflect what the administration had outlined earlier.

“The RFS sets the annual volume requirements for the amount of ethanol and biodiesel to be blended into the nation’s fuel supply,” says Duane Aistrope, a southwest Iowa farmer active in the Iowa Corn Growers Association. “The RFS calls for at least 15 billion gallons of ethanol to be blended into gasoline annually. If waivers are granted to some refineries, the other refineries are supposed to blend more ethanol to make up the difference. EPA isn’t following through on that part of the law.”

Dave Walton, an eastern Iowa farmer and Iowa Soybean Association treasurer, says using soyoil to make biodiesel adds 90 cents to the value of a bushel. “The waivers are a huge financial issue for farmers and rural areas,” he says. “Our ire is aimed at EPA Administrator Andrew Wheeler right now. But the buck stops with the president. If Trump doesn’t fix this RFS situation, my support of him will go away.”

A strong RFS needed

Kelly Nieuwenhuis, a northwest Iowa farmer and president of the Siouxland Energy Cooperative board of directors, was hoping to get certainty from the Trump administration so he and his board could restart the idled 80 million-gallon ethanol plant at Sioux Center. “President Trump has lost a lot of support from people involved in agriculture,” he says. Like other farmers and biofuel supporters, Nieuwenhuis is disappointed in EPA’s mid-October announcement of how the agency plans to restore demand that’s lost when the administration grants RFS waivers to refiners.

The waivers were designed to ease the burden on small oil refineries that might not be able to economically blend the required ethanol and biodiesel amounts, depending on market conditions. “But EPA under this administration has allowed exemptions for profitable larger refineries, as well as small refineries, and it hasn’t reallocated the lost volumes,” he notes.