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EPA issues supplemental proposal for renewable fuels volumes

On Tuesday, the US Environmental Protection Agency (EPA) issued a supplemental notice of proposed rulemaking seeking additional comment on the recently proposed rule to establish the cellulosic biofuel, advanced biofuel, and total renewable fuel volumes for 2020 and the biomass-based diesel volume for 2021 under the Renewable Fuel Standard (RFS) program.

EPA said that its proposal fulfills the agreement reached on 4 October, with the White House, EPA, and USDA; that interpretation is not widely shared among the biofuel industry, based on initial comments following the release of the proposal.

The notice does not change the proposed volumes for 2020 and 2021. Instead, it proposes and seeks comment on adjustments to the way that annual renewable fuel percentages are calculated.

Annual renewable fuel percentage standards are used to calculate the number of gallons each obligated party is required to blend into their fuel or to otherwise obtain renewable identification numbers (RINs) to demonstrate compliance.

Specifically, the agency is seeking comment on projecting the volume of gasoline and diesel that will be exempt in 2020 due to small refinery exemptions based on a three-year average of the relief recommended by the Department of Energy (DOE), including where DOE had recommended partial exemptions.

The agency said it intends to grant partial exemptions in appropriate circumstances when adjudicating 2020 exemption petitions. The agency proposes to use this value to adjust the way renewable fuel percentages are calculated. EPA says that the proposed adjustments would help ensure that the industry blends the final volumes of renewable fuel into the nation’s fuel supply and that, in practice, the required volumes are not effectively reduced by future hardship exemptions for small refineries.

EPA said that its supplemental notice seeks to balance the goal of the RFS of maximizing the use of renewables while following the law and sound process to provide relief to small refineries that demonstrate the need.

EPA will hold a public hearing on 30 October 2019 followed by a 30-day comment period from the date of the hearing to receive public input on these issues. The agency will finalize this action later this year.

Reactions. In response, Iowa Corn Growers Association (ICGA) President Jim Greif said:

We are outraged the Environmental Protection Agency (EPA) did not implement the details that were presented and outlined by the President only eleven days ago. Any proposal that does not account for actual waived gallons under the Renewable Fuel Standard (RFS) fails to restore the integrity of the law. Last week President Trump promised to uphold the Congressional intent of the RFS by addressing the demand destruction brought on by expanded use of small refinery exemptions and prospectively account for those exemptions using a three-year rolling average of actual waived gallons, beginning with the 2020 biofuel standard. Today’s announcement falls well short of that mark, only accounting for the Department of Energy recommendations that the EPA itself ignored.

The Iowa Corn Growers Association (ICGA) will continue to fight back on demand destruction with our biofuels champions and President Trump to ensure the final 2020 Renewable Volume Obligations (RVO) reflect the commitments made by the President to restore the integrity of the RFS to the benefit of farmers and consumers everywhere.

National Corn Growers Association President Kevin Ross said:

While corn farmers appreciate the EPA’s intent to follow Department of Energy recommendations on waivers going forward, the proposed rule fails to provide the assurance needed that EPA’s practices for granting waivers will change going forward. Farmers have long been skeptical of the EPA’s administration of the RFS. This proposal doesn’t provide farmers confidence in EPA’s ability to follow through and make this right. President Trump made a commitment to farmers and instructed the EPA to follow the law, but this proposal appears to come up short again.

Biofuel trade association Growth Energy’s CEO Emily Skor issued the following:

It is unconscionable that EPA’s proposal betrays President Trump’s promise to rural America. A week ago, Administrator Wheeler personally took to the airwaves and promised Iowa farmers that he would accurately account for lost gallons moving forward based on the ‘last three years of the waivers.’ Administration officials repeatedly said that 15 billion gallons will mean 15 billion gallons and this proposal fails to ensure that farm families and biofuel producers have the certainty they need to reinvest and rebuild after three years of massive demand destruction at the hands of EPA.

After completely ignoring Department of Energy (DOE) advice to reduce exemptions, EPA now proposes to use DOE’s deflated numbers to turn a real fix into little more than a Band-Aid. To effectively address demand destruction moving forward, EPA’s fix must incorporate a projection of actual exempted gallons, not simply apply an out-of-date DOE recommendation.

The proposal released today will do nothing to bring back the ethanol plants that have shut down or help the burden that many of our corn farmers currently face. Every day that passes without the true solution President Trump promised means more and more pain for America’s farmers and rural workers.

Renewable Fuels Association President and CEO Geoff Cooper said:

If the Oct. 4 announcement from EPA was a big step forward, today’s supplemental proposal is a step backward. It falls short of delivering on President Trump’s pledge to restore integrity to the Renewable Fuel Standard and leaves farmers, ethanol producers, and consumers with more questions than answers. It is baffling to us that the proposal sets the three-year average of exempted volume using the very same DOE recommendations that EPA blatantly ignored over and over. We are concerned that the volume of actual exemptions granted in 2020 could very well exceed the amount of projected exemptions from DOE, putting us right back into the quagmire where the 15-billion-gallon requirement is eroded and undermined.

Simply put, this proposal is not what was promised by the administration just over a week ago and fails to answer President Trump’s personal call for a stronger conventional biofuel requirement of more than 15 billion. It is our hope that President Trump will personally intervene again to get the RFS back on track and ensure his EPA honors the commitments that were made.

Cooper pointed out that the Renewable Fuel Standard has specifically required 15 billion gallons of conventional renewable fuel each year since 2015. However, the massive increase in small refinery waivers means the actual volume enforced by EPA has fallen short of the requirement each year. After the exemptions, the conventional biofuel requirement for 2018, for example, was only 13.89 billion gallons. In their communications since the 4 October announcement, both President Trump and EPA Administration Andrew Wheeler have stressed their intention to ensure at least 15 billion gallons are actually blended domestically. It is unclear whether this proposal will actually ensure that volume is met.

Comments

Engineer-Poet

Turning food into fuel is wasteful of all the inputs:  nitrogen, phosphorus, potash, and the diesel and natural gas required to plant, harvest and process it.

It would be far easier to use "advanced biofuels" using methanol, but methanol is not allowed as a blend stock for US motor fuel.  Why is an interesting question; Fiat's success with an A20 blend shows that there are few or no problems on the vehicle end.

SJC

Cellulose uses the same land, water and nutrients,
grain for food, stalks for fuel.

Engineer-Poet

Yes, SJC, but it's difficult to make ethanol from those things.  Much easier to make methanol, but the rules don't allow MeOH in motor fuel in the USA.

Almost like the rules are written to prevent us from getting off petroleum, isn't it?

A Facebook User

Methanol is the future, and not ethanol, unless it is E-ethanol or E-propanol.

I believe methanol is cheaper at this time per kWh, as compared to gasoline/diesel. And a lot cleaner.

Methanol/E-ethanol/E-propanol based ICE and filling stations should be allowed to flourish.

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