Growth Energy submitted a notice of intent to sue letter to the Environmental Protection Agency (EPA) regarding its failure to fulfill its statutory obligation to issue the 2021 Renewable Volume Obligation (RVO) by November 30th, 2020, an annual deadline set by the Renewable Fuel Standard (RFS). The notice gives EPA 60 days to issue the 2021 RVO before risking a lawsuit in federal court.
Every year, EPA is required to set the RVO so that biofuel and fossil fuel companies understand their total renewable fuel blending obligations for the following year. Failure to set the RVO undermines the RFS and could lead to uncertainty in the market and lower than necessary biofuel blending levels.
The letter noted that EPA has not even issued a notice of the proposed obligations for 2021 and consequently the agency appears likely to issue the obligations many months after the Nov. 30, 2020 deadline.
Growth Energy CEO Emily Skor issued a statement following the submission to EPA: “Biofuel producers faced a difficult year in 2020, with fuel demand plummeting to 30-year lows at a historic rate. At its lowest, over half the country’s biofuel plants were forced to slow down or idle, and many have still been unable to come back online. As we head into a new year and our industry continues to try and recover the from the effects of COVID-19, EPA’s failure to meet their statutory obligation to issue RVOs piles on the uncertainty in the fuel marketplace. The Agency needs to take action on behalf of rural America and follow through with its RFS obligation.”
Growth Energy’s letter noted that the extreme delay “not only violates EPA’s statutory duty, but also undermines the RFS program’s purpose of ‘for[cing] the market to create ways to produce and use greater and greater volumes of renewable fuel ear year’ and deprives market participants of the ‘market certainty’ that is ‘so critical to the long term success of the renewable fuel program.’”
“At this point, it likely makes more sense to let the new administration handle the 2021 RVO (Renewable Volume Obligations) rulemaking process entirely,” said Geoff Cooper, the president of the Renewable Fuels Association.
In a tweet, RFA noted that “President-elect Biden has correctly noted that the RFS waivers granted by [@EPA] have ‘severely cut #ethanol production, costing farmers income & [jobs]’….We are confident that the new EPA…will ensure the RFS is implemented in a way that is consistent with the law…”
The National Farmers Union (NFU) was disappointed by the news, particular as it comes at the end of an already challenging year for the industry. In a statement, NFU President Rob Larew condemned EPA’s inaction and pressed the agency to rethink its approach.
“By punting a decision on 2021’s RVOS to the next administration, EPA is introducing yet more uncertainty to the biofuels industry – uncertainty that most farmers and biofuels producers can’t afford right now,” Larew said. “Despite promising again and again to uphold RFS, the Trump administration has consistently undermined the program with its misappropriation of small refinery exemptions, preferential treatment of oil corporations, and disregard for its legal responsibility to restore lost demand, all of which has cost America’s farmers and biofuel producers dearly. To add insult to injury, fuel use – and, consequently, ethanol use – has dropped significantly during the pandemic, cutting deeply into profits.”
Larew concluded, “We sincerely hope Biden’s EPA learns from their mistakes and takes biofuels policy in a much more promising direction.”