US Environmental Protection Agency (EPA) Administrator Andrew Wheeler issued a proposed rule under the Renewable Fuel Standards (RFS) program that would set the minimum amount of renewable fuels that must be supplied to the market in calendar year 2020, as well as the biomass-based diesel volume standard for calendar year 2021.
Under the proposal, conventional renewable fuel volumes, primarily met by corn ethanol, would be maintained at the implied 15-billion gallon target set by Congress. EPA is proposing an advanced biofuel volume requirement for 2020 of 5.04 billion gallons—0.12 billion gallons higher than the advanced biofuel volume requirement for 2019.
The cellulosic biofuel volume requirement of 0.54 billion ethanol-equivalent gallons for 2020 is based on EPA’s production projection—0.12 billion ethanol-equivalent gallons higher than the cellulosic biofuel volume finalized for 2019.
Finally, EPA is proposing to maintain the biomass-based diesel (BBD) volume for 2021 at 2.43 billion gallons.
Proposed and Final Renewable Fuel Volume Requirements for 2019-2021
EPA did not, however, reallocate waived amounts under the hardship program, resulting in negative reactions across the board from powerful corn and biofuel groups.
The Clean Air Act requires EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic, and biomass-based diesel.
However, EPA also can provide waivers to small refining facilities that can prove compliance would cause them financial harm. Since President Trump took office, the EPA has more than quadrupled the number of RFS waivers it has granted.
Today’s proposal does nothing to repair 2.6 billion gallons of demand destroyed by refinery exemptions, which means the EPA is not fulfilling the president’s promise to rural America. Moreover, it explicitly rejects calls to reallocate gallons that will be lost to future waivers. If the EPA doesn’t fully account for lost gallons, we’ll continue to see investments in advanced biofuels frozen by uncertainty, shrinking farm markets, and more rural plants idling production. The president knows that E15 could unlock incredible opportunities for rural America, but that won’t happen unless the EPA upholds the law as Congress intended.—Brooke Coleman, Executive Director of the Advanced Biofuels Business Council
As long as EPA continues to dole out compliance exemptions to oil refiners without reallocating the lost volume, the agency may as well start referring to the annual RFS levels as ‘renewable volume suggestions’ rather than ‘renewable volume obligations. It is a complete misnomer to call these blending volumes ‘obligations’ when EPA’s small refinery bailouts have essentially transformed the RFS into a voluntary program for nearly one-third of the nation’s oil refineries.—Geoff Cooper, President and CEO of the Renewable Fuels Association (RFA)
It’s unconscionable that EPA continues to undermine the president’s commitment to a strong rural America. The 2020 RVOs are a drop in the bucket compared to the demand lost due to a flood of refinery exemptions. Unless EPA restores demand destroyed through secret handouts to oil giants like Exxon and Chevron, these targets offer nothing but another year of lost opportunity and rural hardship. Making matters worse, EPA chose to flout the 2017 court ruling requiring the agency to revisit 500 million gallons of biofuel that were inappropriately waived. Today’s proposal is a slap in the face to the farmers dealing with the toughest years on record.—Emily Skor, CEO of Growth Energy
We are frustrated the EPA did not account for potential waived gallons going forward in the proposed rule. If the EPA continues to grant retroactive waivers, the RVO numbers are meaningless and the EPA is not following the law. Farmers are facing a very tough economic environment and the continued waiver abuse chips away at farmers’ bottom line.—Lynn Chrisp, President of the National Corn Growers Association (NCGA)
We are discouraged by the EPA’s decision to not uphold the integrity of the RFS and account for its heavy usage of the Small Refinery Exemption process as required by law. Farmers are facing a tough economic environment, and the waivers from the EPA are degrading the top priority for Iowa’s corn farmers while impacting our bottom line.—Curt Mether, President of the Iowa Corn Growers Association
EPA’s proposed rule would turn the RFS program on its head. It is likely to reduce America’s use of cleaner, lower-carbon biodiesel and renewable diesel for transportation over the next several years, encouraging more petroleum use.
The proposal sends a chilling signal to America’s biodiesel and renewable diesel producers of EPA’s intent to limit market growth for cleaner fuels. EPA appears to have simply repeated the previous biomass-based diesel volume of 2.43 billion gallons for 2021 without analyzing our industry’s ability to achieve higher volumes.
Worse, EPA refuses to reconcile its RFS rules with its small refinery exemption handout spree. EPA Administrator Andrew Wheeler asserts that by law he must grant RFS hardship exemptions to every refiner that asks. Yet in the proposed rule, EPA claims it can’t possibly predict whether oil refineries will once again take advantage of EPA’s open spigot on these handouts. We know that Administrator Wheeler’s public statements and EPA’s calculation of small refinery exemptions in the annual volumes can’t both be true.—Kurt Kovarik, National Biodiesel Board’s (NBB’s) Vice President of Federal Affairs