ISA Letter Urges President to End Administration’s Policy War Against Biofuels08/21/2019 | Biodiesel, Policy, Soybean News, Economics
The Trump Administration’s undermining of the Renewable Fuel Standard (RFS) courtesy of waivers to petroleum refiners and failing to budge on volume increases is unacceptable, says the Iowa Soybean Association (ISA).
In a sternly worded letter delivered today to President Trump, ISA President Lindsay Greiner said the Environmental Protection Agency (EPA) – with the administration’s approval – is well on its way to destroying nearly 2.5 billion gallons of demand for biodiesel and renewable diesel.
“Farmers need markets, plain and simple,” said the Keota farmer. “Unfortunately, RFS exemptions are providing refiners with more economic windfall at the expense of the biodiesel and renewable diesel industries and U.S. farmers.
“Policy challenges imposed by your administration are forcing biodiesel producers to shut their doors and lay off workers,” Greiner added. “It’s becoming more difficult to understand why you’re choosing to support higher profits for oil companies instead of providing some stability for farmers.”
The waivers exempt oil refiners from their obligations to blend biofuels into their gasoline and diesel as required by the RFS.
Furthermore, the EPA’s recently proposed rule for 2020 RFS standards “sends a chilling signal” that the market for biodiesel and renewable diesel will be capped. Adding to the misery is the EPA’s dismissal of a court order to restore gallons to the RFS program that it unlawfully reduced in 2016.
Greiner urged the president to instruct EPA to finalize the 2020 RFS rule this fall and include increases in the biomass-based diesel volumes equal to the lost volume caused by these small refinery exemptions.
The rule must also restore the volumes the courts determined were unlawfully waived in 2016. Anything less, Greiner said, will worsen the economic situation facing U.S. farmers right now.
The economic pain felt by farmers in Iowa is particularly acute, he added, as the state ranks first nationally in biodiesel production at nearly 400 million gallons. Biodiesel production adds 11 percent to cash soybean prices or nearly 90 cents per bushel. In 2018, this provided $40 per acre in additional income for Iowa farmers and added $355 million to the value of all soybeans produced in our state.
The RFS is crucial to America’s farmers because it creates a value-added, domestic market for soybeans and soybean oil. But its significance is undermined when waivers are granted.
University of Illinois economist Scott Irwin, a respected expert on biofuels, estimates U.S. biodiesel and renewable diesel producers will experience the greatest demand destruction from the exemptions – nearly 1 billion gallons alone from the 31 exemptions recently granted. According to Irwin, the administration is on a path to destroy 2.45 billion gallons of demand for biodiesel and renewable diesel overall.
Greiner pointed out that the EPA’s own data shows the exemptions are reducing the oil industry’s use of biodiesel and renewable diesel. Meanwhile, the oil industry is having yet another profitable year while RFS program compliance costs are nearing an all-time low.
Greiner requested the opportunity to meet personally with the president “to discuss these concerns” and arrive at policy solutions that build demand for Iowa and U.S. soybeans.
“We need markets, not promises,” he said.
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