EPA biofuels proposal falls short of industry expectations – NGFA
On October 15, 2019, the US Environmental Protection Agency (EPA) proposed a new formula that it said was intended to boost biofuels demand, but industry stakeholders say the plan does not fulfill recent promises made by President Trump. The National Corn Growers Association (NCGA) says that waivers issued under the Trump administration have cumulatively reduced demand for biofuels by more than 4 billion (US) gallons (≈ 15.1 billion litres).
After a controversial decision issued in August 2019 to exempt some small petroleum refineries from the Renewable Fuel Standard (RFS), the Trump administration announced October 4, 2019, that it would propose expansions to biofuel blending requirements beginning in 2020.
The EPA said it would propose actions that would ensure that more than 15 billion (US) gallons (≈ (≈ 56.78 billion litres) of “conventional ethanol” are blended into the nation’s fuel supply beginning in 2020 and that the volume obligation for biomass-based diesel is met.
But in its October 15, 2019, supplemental notice of proposed rulemaking, EPA said its plan would not change proposed volumes for 2020 and 2021, but it would adjust the way that annual renewable fuel percentages are calculated. Lawmakers and biofuel stakeholders said the plan bases the biofuels volumes required for blending on federal estimates instead of actual exemptions and waivers granted by EPA.
Annual renewable fuel percentage standards are used to calculate the number of gallons each obligated party is required to blend into its fuel or to otherwise obtain renewable identification numbers (RINs) to demonstrate compliance, EPA noted.
Specifically, the agency says that it is “seeking comment on projecting the volume of gasoline and diesel that will be exempt in 2020 due to small refinery exemptions based on a three-year average of the relief recommended by the Department of Energy (DOE), including where DOE had recommended partial exemptions.”
EPA granted 31 small refiners’ exemptions amounting to 1.4 billion gallons (≈ 5.3 billion litres) from the RFS in August, which spurred an outcry from Iowa lawmakers and other ethanol-producing states. The National Corn Growers Association (NCGA) says waivers issued under the Trump administration have reduced demand for biofuels by more than 4 billion gallons (≈ 15.1 billion litres).
Only 11 days after President Trump’s landmark announcement, the EPA proposal reneges on the core principle of the deal. Instead of standing by President Trump’s transparent and accountable deal, EPA is proposing to use heretofore secret DOE recommendations that EPA doesn’t have to follow, said Iowa Renewable Fuels Association Executive Director Monte Shaw.
In an October 16, 2019, press release, House Agriculture Committee Chairman Collin Peterson, D-Minn., said EPA’s announcement “falls short” of the president’s promises and “doesn’t undo the damage done to farmers and biofuel producers.” He added that farmers in his district are struggling, while the administration “has yet to say how (it) will address the 4 billion gallons of lost biofuels demand from waivers previously granted or produce a concrete plan to meet the annual 15 billion gallon requirement set in law.”
EPA will conduct a public hearing on Oct. 30, followed by a 30-day comment period on the proposal. The agency said it will finalize its action later this year.