Wallaces Farmer

Soybean growers applaud biodiesel quota, call for EPA to halt 'unwarranted waivers'.

June 26, 2018

6 Min Read

The EPA today unveiled its biofuel targets for ethanol and biodiesel in 2019 and 2020.

The proposal increases renewable volume obligations (RVOs) under the Renewable Fuel Standard by 3% in 2019, from 19.29 billion gallons to 19.88 billion gallons. The proposal maintains the current 15-million-gallon target for corn ethanol and increases cellulosic and advanced biofuel requirements by 100 million gallons and 600 million gallons, respectively.

"It is promising that the EPA is planning to increase the volume of American grown and produced fuels in our transportation sector,” said National Farmers Union Senior Vice President of Public Policy and Communications Rob Larew. “However, the proposal does not do enough to account for the demand destruction of over a billion gallons of renewable fuels. The EPA should cease granting these waivers to prevent additional harm to the RFS. The agency must also find ways to reallocate gallons lost to the waivers or account for those gallons in the finalized RVOs in order to make up for harm already done.

“Additionally, the administration should look for ways to implement higher level blends of ethanol, such as E30, which expand markets for family farmers, boost rural economies, improve air quality, and lower fuel prices for consumers,” Larew added.

The American Soybean Association is pleased with the proposed biodiesel and advanced biofuels volumes, saying it opens the door for the growth of biodiesel volumes.

EPA calls for biomass-based diesel (BBD) volumes within the Renewable Fuel Standard of 2.4 billion gallons for 2020, a 300 million gallon increase over the 2019 levels.

“This increase supports a valuable, growing market for soybean oil,” said ASA President John Heisdorffer, a soybean producer from Keota, Iowa. “We have an increased capacity on the domestic market to meet the demand for renewable fuels blended into the nation’s fuel supply.”

Yet, Heisdorffer pointed out that proposed future increases in BBD volumes could be negated by the unwarranted waivers of RFS volumes that EPA has recently granted some oil refiners. 

“The waived volumes need to be reallocated to ensure the RFS remains whole and that proposed future increases are meaningful,” Heisdorffer said. “The biodiesel industry has the potential to support agriculture by creating jobs, diversifying fuel sources, and reducing America’s dependence on foreign oil. We encourage the EPA to continue supporting growth by limiting waivers that water down the benefits of these increased levels.”

Likewise, the Americans for Energy Security and Innovation (AESI) Co-Chairs Jim Talent and Rick Santorum urged the Environmental Protection Agency to put a stop to abusive waivers that have enriched well-connected refiners at the expense of rural workers and farmers.

“The RFS remains the single most successful energy policy working to reduce America’s dependence on foreign oil, while delivering real economic and environmental benefits,” Talent and Santorum said in a joint statement. “It creates competition at the pump that is not vulnerable to manipulation by the Organization of the Petroleum Exporting Countries (OPEC), and it has made America the world leader in biofuel production. Hundreds of thousands of rural jobs -- from manufacturing to farming – depend on the RFS, and we should be embracing opportunities to accelerate that growth in communities hit hardest by the ongoing farm crisis and rising trade barriers. Rural voters are counting on this administration to stand strong against attacks by a few well-connected refinery owners, and GOP leaders cannot afford to let them down.”

The AESI also called on EPA Administrator Pruitt to put President Trump’s vision for rural prosperity back on track by taking action on E15 regulations.

“Right now, it is vital that Administrator Pruitt stop delaying action on the president’s pledge to lift outdated, seasonal regulations on E15 during the summer,” Talent and Santorum said. “Taking this action will help to expand growth opportunities for U.S. farmers, hold down surging prices at the fuel pump, and even reduce the cost of biofuel credits for refiners that refuse to blend biofuels. There’s no reason to hold E15 hostage when we could be driving growth in the heartland.” 

“For corn farmers, what’s not included in EPA’s proposed rule says more than what’s included,” said National Corn Growers Association President and North Dakota farmer Kevin Skunes. “It is encouraging that EPA is following Congressional intent and proposing some growth in the RFS volumes and continuing to propose an implied 15-billion-gallon volume for conventional ethanol. However, by continuing to allow retroactive exemptions to refineries, EPA will undercut the volumes in this rule, rendering the proposed blending levels meaningless. Furthermore, the proposed rule states that EPA will not consider comments on how small refinery exemptions are accounted for.” 

Under the Renewable Fuel Standard, the proposed biofuel targets -- or Renewable Volume Obligations (RVOs) -- are now subject to a public comment period and will be finalized in late November.

Here’s what others are saying:

“Proposed biofuel volumes are meaningless when the EPA continues to hand out waivers to the largest and most profitable companies in the world,” said Kyle Gilley, Senior Vice President of External Affairs and Communications, POET. “The more-than 1.6 billion gallons that have already been waived this year equal a 4% drop in the corn grind nationally, devastating for farmers who have faced more than four years of declining farm income and poor crop prices. Administrator Pruitt and the Trump Administration must stand up for farmers, immediately reallocate those lost gallons and cease bailouts to the oil industry.”

“As the state that leads the nation in renewable fuels production, Iowa farmers deserve honesty and transparency from the EPA on the Renewable Fuel Standard,” said U.S. Sen. Jodi Ernst, R-Iowa. “The proposed uptick in the amount of renewable fuel that refiners blend into transportation fuel is encouraging, but does not make up for about 1.5 billion gallons lost by Administrator Pruitt’s decision to hand out an unprecedented number of small refinery waivers.”

“The EPA proposed 15 billion gallons for conventional biofuels, but that still isn’t a real number we can count on,” said Emily Skor, CEO, Growth Energy. “This plan fails to ensure those gallons will, in fact, be blended. By neglecting to reallocate gallons lost to waivers, the EPA is doubling down on another year of an estimated 1.5 billion gallons in demand destruction.”

“On its face, the EPA proposal is promising,” said Brooke Coleman, executive director, Advanced Biofuels Business Council. “It reverses last year’s roll back of cellulosic biofuels, and it opens growth opportunities for advanced producers who are establishing new revenue streams for rural America. But until there is some check on the EPA’s abuse of waivers, regulatory uncertainty will continue to threaten investments in advanced biofuels.”

Source: NFU, ASA, AESI, POET, NCGA, Office of Sen. Jodi Ernst, Growth Energy, Advanced Biofuels Business Council

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