Trump’s EPA yet again hurts farmers, biofuels in final RFS rule

By Ron Kotrba | December 19, 2019

The U.S. EPA released its final rule for the 2020 Renewable Fuel Standard and biomass-based diesel volumes for 2021.

Disappointingly, the agency left the 2021 biomass-based diesel volumes at 2020 levels, or 2.43 billion gallons, while slightly increasing the 2020 advanced biofuel targets from its proposed 5.04 billion ethanol-equivalent gallons to 5.09 billion gallons—but this only provides growth for cellulosic biofuel. “Other advanced biofuels such as biodiesel and renewable diesel received no additional market space,” stated the National Biodiesel Board. The 2019 volume for advanced biofuels was set at 4.92 billion gallons, while the 2019 biomass-based diesel volume was 2.1 billion gallons.

Several trade groups and biodiesel producers railed against the agency for the lack of growth in advanced biofuels including biodiesel in its final rule, for not restoring lost gallons from its copious granting of small refinery exemptions (SREs), and for finalizing its contentious proposal to account for future exemptions using U.S. DOE recommendations rather than a three-year average of actual gallons waived. 

“EPA’s final rule for the 2020 RFS volumes is simply out of step with congressional intent and President Trump’s promises,” said Kurt Kovarik, NBB vice president of federal affairs. “This week, Congress and the president are extending the biodiesel tax incentive through 2022 and sending an unmistakable signal that they support continued growth of biodiesel and renewable diesel. At the same time, EPA Administrator Wheeler is doing everything he can to block that growth.”

Kovarik added that the best estimate of future exemptions is an average of the 38 billion gallons exempted over the past three years. “Even if EPA had included that estimate, though, there is nothing in today’s rule to ensure that the agency will get these exemptions under control,” he said. 

NBB also noted that EPA defers a final determination on the U.S. Court of Appeals’ remand of the 2016 rule, in which the agency waived 500 million gallons of biofuel use. “The biodiesel industry asks EPA to fulfill the court’s clear direction to restore the 500 million gallons from 2016,” Kovarik said. “The agency has recognized that it must ensure that the RFS volumes are met. EPA must be consistent.”

While World Energy CEO Gene Gebolys was appreciative that the agency put the rule out before the end of the year, he said EPA’s abuse of SREs “to secretly and severely distort RIN markets” has led to billions of dollars of economic cost and thousands of lost jobs.

“The EPA’s approach to SREs have made a mockery of previous final rules,” Gebolys said, “and unless that approach changes, future SREs will do the same to this rule. We are encouraged though that the president now recognizes the damage done and has committed to stopping it from happening again. We welcome the EPA’s apparent commitment to a new approach to SREs going forward and have every intention of holding them to it. We remain vigilant and will continue to hold the EPA accountable for operating with integrity and transparency to faithfully execute this final rule and every one that comes after it.”

U.S. Rep. Abby Finkenauer, D-Iowa, an ardent biofuel supporter, said, “Iowa’s biofuels producers and farmers have suffered enough this year from the president’s trade war, to taking the side of big oil and refinery waivers. Today, we have a final rule from the administration that fails to take into account legitimate bipartisan concerns and feedback from our nation’s actual ethanol and biodiesel producers. Once again, we see the president has no intention of making good on the promises he has made to Iowans in the past to stop attacking the Renewable Fuel Standard. Iowans shouldn’t be losing jobs because of the Trump administration’s EPA policies and lack of leadership from the president.”

“With this final rule,” said Grant Kimberley, executive director of the Iowa Biodiesel Board, “the agency has once again declined to uphold the integrity of a federal law meant to encourage the use of renewable fuels in America, siding with oil company interests at the expense of family farmers.” He added that the industry does not have confidence in Wheeler’s plan for estimating future small refinery exemptions based on the agency’s past actions. “There is no assurance these exemptions will be brought under control or properly accounted for,” Kimberley said. “Meanwhile, we stand ready to meet continued sustainable growth of several hundred million gallons every year. We hope to work with EPA and the administration to set a course for substantial growth in future years.”

“I don’t think the White House truly understands the depth of discontent in farm country,” said Monty Shaw, executive director of the Iowa Renewable Fuels Association. “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.”

U.S. Sen. Chuck Grassley, R-Iowa, said, “Once again, EPA is playing games and not helping President Trump with farmers. I will hold EPA’s feet to the fire to make certain they abide by DOE’s recommendations and ensure integrity in the RFS. Whether that happens is up to Administrator Wheeler—and the president’s support among farmers is in his hands.”  

 
 
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