EPA, White House roll out negotiated RFS agreement10/04/2019 | Biodiesel, Economics
By Bethany Baratta, ISA senior writer
An announcement today by the EPA administrator shows that President Donald Trump is listening to farmers and the U.S. biofuels industries who raised concerns with EPA’s continued misuse of small refinery exemptions (SRE), as well as the proposed Renewable Fuel Standard (RFS) volumes in July.
“This action restores much-needed certainty in the marketplace by ensuring annual RFS volumes reflect waived gallons from future exemptions,” said Iowa Soybean Association (ISA) president Tim Bardole, a farmer near Rippey. He says it will help eliminate wild production swings that have destabilized the biofuels industry, farm operations and rural communities.
ISA Director of Public Affairs Michael Dolch praised the leadership of Senators Charles Grassley (R-Iowa), Joni Ernst (R-Iowa) and Iowa Governor Kim Reynolds.
“We greatly appreciate the tremendous effort and unwavering commitment of Senators Grassley and Ernst, Governor Reynolds and Secretary Naig, all of whom have worked tirelessly to defend the RFS and support Iowa farmers and the biodiesel industry,” Dolch said.
The agreement is the culmination of efforts not only by Iowa’s leadership, but also by ISA members, who have visited with elected officials both in Iowa and in Washington, DC, regarding fixes to the RFS.
“I’m pleased that, in the end, the administration finally came to realize how important this is and have done the right thing in protecting the RFS volumes,” said Ron Heck, past president of the ISA and ISA’s representative on the National Biodiesel Board (NBB). He has represented Iowa’s soybean farmers several times in Washington, D.C, since the original proposal on RFS volumes was released in July.
In the plan, President Donald Trump has directed the EPA to account for future small refinery exemptions in annual Renewable Fuel Standard volumes.
Building off the recently proposed 2020 Renewable Volume Standards and the Biomass-Based Diesel Volume for 2021, EPA will propose and request public comment on expanding biofuel requirements beginning in 2020.
EPA will seek comment on actions to ensure more than 15 billion gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020, and the volume obligation for biomass-based diesel is met. This will include accounting for relief expected to be provided for small refineries.
Moving forward, Trump directs EPA to use the three-year average of exempted gallons in its estimate of renewable volume obligations (RVOs), according to sources familiar to the details of the plan. EPA intends to take final action on this front later this year. In the most recent compliance year, EPA granted 31 small refinery exemptions.
NBB CEO Donnell Rehagen said this is a “huge step” in restoring the integrity of the RFS.
“Biodiesel producers continue to be severely harmed by EPA’s misuse of small refinery exemptions,” Rehagen said. “Nine producers from across the country – including in Pennsylvania, Michigan, Texas, Georgia and Iowa – have closed their doors or reduced operations and laid off more than 200 employees. Today’s announcement is a first step in reversing the loss of production and restoring those jobs.”
The agreement directs the EPA to initiate a rulemaking process to streamline labeling and remove other barriers to the sale of E15.
EPA will continue to evaluate options for RIN market transparency and reform.
USDA will seek opportunities through the budget process to consider infrastructure projects to facilitate higher biofuel blends, according to details released from the EPA.
The administration will continue working to address ethanol and biodiesel trade issues, the release said.
More specifics about the agreement are forthcoming. National Biodiesel Board CEO Donnell Rehagen is hopeful the plan will increase bio-mass based diesel (BBD) volumes.
The EPA in July set the 2021 Biomass-based Diesel (BBD) volume at 2.43 billion gallons -- the same volumes set for 2020. EPA proposed raising the 2020 Advanced Biofuel volume to 5.04 billion gallons, a slim increase from the 4.92 billion gallons in 2019 due to a small increase in the Cellulosic volumes set in the proposal. The proposed volumes in July were similar to those finalized for 2019.
“While today’s proposal addresses the lost gallons from future exemptions, it does not provide for additional volumes of biomass-based diesel in 2021,” said Kurt Kovarik, NBB Vice President of Federal Affairs. “We will continue to press EPA to send signals for future growth for biodiesel producers and soybean farmers.”
The agreement signals strong support for a market critical to Iowa’s soybean farmers and will help ensure that biomass-based diesel volumes are met under the RFS, Dolch said.
“With the proposed supplemental rule expected within the next week, it’s now on EPA to follow through with the president’s agenda. We will continue working closely with our elected champions to ensure biodiesel growth and market development into the future,” Dolch said.
Farmers can celebrate this news today, but the work continues, Heck said.
“This agreement will lead to a sharp increase in bio-based diesel demand for 2020,” Heck said. “But we still have work to do in protecting our markets on the trade front from subsidized biodiesel coming into the country. And we’re still looking for increases in 2021 and beyond.”
Contact Bethany Baratta at email@example.com.
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