EPA rule won’t prevent further RFS erosion by waivers says RFA
On December 19, 2019, the United States (US) Environmental Protection Agency (EPA) finalised its rule that establishes the required renewable fuel volumes under the Renewable Fuel Standard (RFS) program for 2020 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel and biomass-based diesel for 2021.
"EPA’s rule fails to deliver on President Trump’s commitment to restore integrity to the RFS," said RFA President and CEO Geoff Cooper.
The Renewable Fuels Association (RFA) expressed disappointment in the US Environmental Protection Agency’s final rule for 2020 Renewable Fuel Standard (RFS) blending requirements, arguing that the rule opens the door for small refinery exemptions (SREs) to continue eroding RFS volumes and destroying demand for America’s biofuel producers and farmers.
After EPA’s overwrought abuse of the SRE program in recent years, agency officials had a chance to finally make things right with this final rule—but they blew it. EPA’s rule fails to deliver on President Trump’s commitment to restore integrity to the RFS, and it fails to provide the market certainty desperately needed by ethanol producers, farmers, and consumers looking for lower-cost, cleaner fuel options. While the final rule is an improvement over the original proposal, it still does not guarantee that the law’s 15-billion-gallon conventional biofuel blending requirement will be fully enforced by EPA in 2020, said RFA President and CEO Geoff Cooper.
According to the rule released December 19, 2019, EPA will project SRE volumes based on historical Department of Energy (DOE) recommendations, rather than the actual volume of SREs issued by EPA.
Ironically, however, EPA has generally chosen to ignore DOE’s recommendations regarding SRE petitions in recent years. For the 2016-2018 compliance years, the volume of required renewable fuel blending waived by EPA was almost double the amount recommended by DOE.
After doing the exact opposite in recent years, EPA is now suggesting it will follow DOE’s recommendations on 2020 SRE petitions. So, now the waiting game begins. We’ll have to wait with bated breath until at least the spring of 2021 to see whether EPA truly makes good on its promise to follow DOE recommendations on 2020 SREs, Cooper said.
In the meantime, RFA will be keeping a close eye on EPA’s handling of the 2019 SRE petitions, 10 of which have already been received by the agency.
With historically low RIN credit prices, record-high RIN stocks, and ample supplies of low-cost ethanol available, it will be difficult—if not impossible—for refiners to claim they need a ‘hardship’ exemption for 2019. Still, EPA’s approach to the 2019 SRE petitions will probably be a pretty good indicator of whether the agency is truly interested in following DOE recommendations and exercising more restraint and judiciousness moving forwardCooper said.
RFA also urged the Administration to expeditiously move ahead on the other elements of the biofuels package announced by EPA on October 4, 2019, including streamlining E15 labeling requirements, removing other barriers to the sale of E15, addressing ethanol trade barriers, and launching a program to expand infrastructure for higher ethanol blends.
Offsetting the RFS volumes lost to SREs was only one piece of the plan promised by the President and rolled out by EPA in October. And while the plan released by EPA for addressing SREs doesn’t go nearly far enough, the ethanol industry is eager to work with EPA and USDA to quickly implement the other relief measures included in the package, said Geoff Cooper.