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Reaction To EPA’s Final Rule On the RFS Is Mostly Negative in Farm Country

Below is the news and reaction from various farm groups on the EPA’s announced final rule for the Renewable Fuel Standard that was announced on Thursday, December 19th, 2020:

EPA Maintains SRE Supplemental Rule as Proposed

The Environmental Protection Agency Thursday finalized renewable volumes under the Renewable Fuel Standard for 2020. Through the action, EPA says it has “fulfilled yet another key promise” to farmers, however, corn and biofuel producers disagree. The EPA did not make changes to the proposal, as requested by the biofuels industry. The final rule will use a three-year rolling average of recommended small refinery exemptions by the Department of Energy to account for waived gallons. Farm groups told the EPA during the comment period to account for the actual number of waived gallons, rather than the DOE recommendations. The EPA says conventional biofuel volumes, primarily met by corn ethanol, will be maintained at the 15 billion gallon target set by Congress for 2020. Cellulosic biofuel volumes for 2020, and thus advanced biofuel volumes, will increase by almost 170 million gallons over the 2019 standard. Biomass-based diesel volumes for 2021 will be equivalent to the standard for 2020, and total RVO gallons for 2020 is 20.09 billion gallons.

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Corn, Biofuels Groups, Disappointed in EPA Decision

Corn and biofuels groups expressed disappointment in the Environmental Protection Agency’s decision to finalize a rule relating to small refinery exemptions under the Renewable Fuel Standard. The final rule uses a three-year average of the Department of Energy recommended waivers as an estimate for 2020 waivers rather than an average of actual gallons waived by the EPA, as requested by biofuel supporters. The National Farmers Union says President Donald Trump broke a promise to farmers. The Trump administration in October promised to fully account for waived volumes due to small refinery waivers. NFU’s Rob Larew says, “farmers are sick and tired of this biofuels bait and switch.” Growth Energy CEO Emily Skor says more action is needed on the proposal to restore growth under the RFS, adding “this rule leaves important work unfinished.” National Corn Growers Association President Kevin Ross says the final rule “falls short of adequately addressing the demand destruction caused by EPA’s abuse of RFS refinery waivers.”

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Trump Administration Turns Back on Certainty for Farmers, Leaves Future of RFS in EPA’s Hands

JOHNSTON, IOWA – Today the EPA released the final Renewable Fuels Standard (RFS) rule setting blend levels for 2020. Included in the rule was a provision intended to fulfill President Donald Trump’s commitment to ensure blend levels are met by stopping demand destruction caused by small refinery exemptions (SREs). Unfortunately, the final rule fails to do this in a way that creates market certainty, instead leaving EPA leeway to undercut the RFS levels in the future.

“President Trump turned his back on certainty for farmers and failed to keep the September 12 deal,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “Instead of certainty, we are essentially being told to trust the EPA to uphold the RFS in the future even though for the past three years the EPA has routinely undermined the program. Every farmer and biofuel supporter I have talked to is deeply disappointed, frustrated, and quite frankly angry. I don’t think the White House truly understands the depth of discontent in farm country.”

In order to remove EPA discretion from the process, biofuels supporters united behind a plan to account for SREs using a three-year rolling average of actual refinery exemptions granted. President Trump agreed to this plan in a September 12 Oval Office meeting with Midwestern elected officials, including Iowa’s Governor and Senators. Today, however, President Trump sided with EPA’s alternative plan which relies on using a three-year rolling average of U.S. Department of Energy (DOE) recommendations for SREs, which EPA has routinely ignored and is under no legal obligation to follow.

Shaw continued: “Under today’s rule, stated RFS levels will only be truly met if EPA adheres to DOE’s recommendations for SREs and does not grant additional SRE volumes as they have done in the past. Therefore, the market will not know for sure what the effective RFS blend levels are until after SREs are adjudicated months after a compliance year is over.”

Given the elevated impact of DOE’s recommendations going forward, today IRFA sent a letter to EPA asking the agency to shed light on the “black box” SRE review process.

“IRFA today called upon the EPA to immediately post DOE recommendations – past, present and future – on their SRE website dashboard,” stated Shaw. “Market participants must have faith in the process and must know whether or not EPA is following the DOE recommendations. Further, to prevent any entity from gaming the system, this information should be made public to all market participants at the same time. In just a few months, EPA will begin adjudicating the 2019 compliance year SREs. It will be their first opportunity to demonstrate good faith and we’ll be watching very, very closely.”

Click here to see IRFA’s full letter to the EPA.

While the focus during the past few weeks has been on accounting for SREs in the RFS rule, there were several other important provisions agreed to by President Trump during the September 12 meeting to help offset the demand destruction caused by SREs. President Trump committed the EPA to initiate a rulemaking process to streamline labeling and remove other barriers to the sale of E15. He also directed USDA to consider infrastructure projects to facilitate consumer access to higher biofuel blends.

“Accounting for SREs was just one facet of the deal President Trump made with our elected champions,” added Shaw. “And even as we believe today’s announcement falls short of a true SRE fix, we fully expect President Trump to live up to the remaining promises made on September 12. IRFA intends to work with our elected champions to ensure there is expeditious implementation of President Trump’s ‘giant package’ that includes improvements in E15 regulations and infrastructure funding.”

Shaw called upon all Iowans to thank the state’s elected officials for leading the effort to restore integrity to the RFS and to repair the economic harm done by SREs.

“While it was a multistate effort, Iowa’s elected officials were continuously at the forefront of the fight,” Shaw concluded. “Their dedication and effort during this fight was a credit to the hard work ethic made famous by the farmers they were supporting. This battle is over, but the war continues. And Iowans won’t stop fighting until the RFS is fully enforced and every consumer from coast to coast has access to ethanol and biodiesel blends.”

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing over 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce nearly 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.

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RFA: EPA Rule Won’t Prevent Further RFS Erosion by Waivers

The Renewable Fuels Association today expressed disappointment in the Environmental Protection Agency’s final rule for 2020 Renewable Fuel Standard 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,” said RFA President and CEO Geoff Cooper. “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.”

According to the rule released today, 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,” Cooper said. “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.”

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,” Cooper said. “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 forward.”

RFA also urged the Administration to expeditiously move ahead on the other elements of the biofuels package announced by EPA on October 4, 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,” Cooper said. “And while the plan released by EPA today 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.”



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