Home Energy EPA Releases RFS Proposal; Fails to Reallocate Volume Lost to Waivers

EPA Releases RFS Proposal; Fails to Reallocate Volume Lost to Waivers

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The Environmental Protection Agency is proposing an increase in the total renewable fuel volume to 19.88 billion gallons, up from the 19.29 billion expected gallons. However, biofuels groups say the proposal falls short of damage done to the Renewable Fuel Standard from hardship waivers granted to refiners. The proposed conventional biofuel amount of 15 billion gallons maintains the level set for 2018. The proposal also calls for 4.88 billion gallons of advanced biofuel, including 381 million gallons of cellulosic biofuel and 2.43 billion gallons of biodiesel for 2020.

Below is the release from Renewable Fuels Association in response to the EPA announcement:

By failing to remedy the harm done by Administrator Scott Pruitt’s recent actions on the Renewable Fuel Standard (RFS), today’s proposal from the Environmental Protection Agency (EPA) for 2019 RFS blending requirements dealt yet another blow to America’s farmers and ethanol producers, according to the Renewable Fuels Association (RFA).

On the surface, today’s EPA proposal ostensibly raises the total 2019 renewable volume obligation (RVO) by 3 percent over the 2018 requirement and maintains a 15-billion-gallon requirement for conventional biofuels like corn ethanol. However, due to EPA’s failure to stem the tide of small refinery waivers, its refusal to reallocate lost blending volumes, and its brazen repudiation of binding court decisions, RFA said today’s proposal is superficial and toothless and undermines President Trump’s commitment on the RFS.

“It would seem a hollow and cynical exercise to praise or thank EPA Administrator Pruitt for appearing to follow the statute with this proposed RVO,” said RFA President and CEO Bob Dinneen. “While we acknowledge that the implied 15-billion-gallon requirement for conventional biofuels like corn ethanol should, in theory, send a positive signal to the market, it comes with the backdrop of 1.6 billion gallons of demand destructed by illegal waivers to small refineries and no commitment that EPA is changing its approach to granting these exemptions. Thus, the proposal means nothing until EPA reallocates those lost gallons and sets forth a more transparent and rational process that assures small refinery waivers are not abused or granted unnecessarily. Unfortunately, over the past few days, Administrator Pruitt buckled yet again to pressure from the oil industry and removed language from this proposal that would have indicated the Agency’s interest in addressing what has clearly become an abused process. That’s not just wrong, it flies in the face of the President’s commitment to farmers and consumers across the country who support the increased use of renewable fuels,” according to Dinneen.

“This RVO proposal is a paean to missed opportunities for the sole purpose of benefiting the oil industry that continues to thwart the development of biofuels at every turn,” Dinneen continued. “The Agency missed the opportunity to address the flawed and opaque small refinery waiver process. It failed to address the court-ordered remand of 500 million gallons in forfeited demand from the 2016 RVO. And it once again missed an opportunity to address the disparate treatment of E10 and E15 with regard to volatility regulation. EPA needs to stop tilting to the whims of the oil industry in implementing the nation’s renewable fuel program, and work to create demand for ethanol, lowering prices at the pump for consumers and creating economic opportunities for farmers across the country,” stated Dinneen.

The agency proposed a total renewable fuel volume of 19.88 billion gallons (BG), of which 4.88 BG is advanced biofuel, including 381 million gallons of cellulosic biofuel. That leaves, on paper, a 15 BG requirement for conventional renewable fuels like corn ethanol.

National Corn Growers Association President and North Dakota farmer Kevin Skunes issued the following statement:

“For corn farmers, what’s not included in EPA’s proposed rule says more than what’s included.

“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.

“EPA also had an opportunity to propose a remedy for the 1.6 billion gallons the agency has retroactively waived from the 2016 and 2017 volume requirements over the past year. NCGA believes that if EPA is going to grant retroactive waivers to cut volume requirements for certain refineries, then EPA must also reallocate those gallons to others, so the obligation to blend renewable fuels is not lost.

“Every gallon of renewable fuel blending waived by EPA reduces the clean air benefits of the RFS and costs consumers choice and money at the pump, particularly today when ethanol is considerably less expensive than gasoline. EPA is also missing an opportunity to propose the removal of the outdated regulatory barrier limiting year-round sales of ethanol blends greater than 10 percent, such as E15.

“America’s farmers are experiencing their lowest net farm incomes since 2006, along with the increasing threat of a trade war. The EPA can provide more certainty to farmers by addressing the gallons already exempted, spelling out how future exemptions will be handled to ensure waived gallons are reallocated and moving forward with a stronger RFS that supports America’s farmers and their rural communities.”