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Crop, biofuel organizations unhappy with RFS proposal

By MICHELE F. MIHALJEVICH

WASHINGTON, D.C. — Commodity and biofuel organizations have spoken out against the U.S. EPA’s proposed volume obligations for 2020 and 2021 under the federal Renewable Fuel Standard (RFS) program.

Earlier this month, the agency announced corn-based ethanol in 2020 would be maintained at the 15 billion-gallon target set by Congress. The EPA also proposed an advanced biofuel volume requirement of 5.04 billion gallons, up 120 million from 2019. The proposed cellulosic requirement is up 122 million gallons from 2019, to 540 million.

EPA has also proposed maintaining the biomass-based diesel (BBD) volume for 2021 at 2.43 billion gallons. It sets BBD volumes two years ahead of time, unlike other biofuel which is one year ahead.

The EPA has failed to account for lost volumes due to refinery exemptions and to uphold President Donald Trump’s commitment to the RFS, the National Corn Growers Assoc. stated.

“We are frustrated the EPA did not account for potential waived gallons going forward in the proposed rules,” said Lynn Chrisp, the group’s president. “If the EPA continues to grant retroactive waivers, the RVO (Renewable Volume Obligation) 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.”

In 2016-17, the EPA approved 54 exemptions and has 38 requests pending for 2018, according to the Renewable Fuels Assoc. (RFA). Under the RFS, an oil refinery that processes up to 75,000 barrels of oil daily can qualify for a small-refinery exemption, RFA said.

The RFS advanced biofuel obligation for a refinery that size would be as much as 20 million gallons of renewable fuel and primarily would be met with biomass-based diesel, the organization noted.

“It appears the EPA continues to favor Big Oil and not uphold the RFS,” Chrisp added. “This narrative is getting old. It is time for the EPA to follow the law to ensure the waivers do not destroy volume requirements.”

The EPA’s announcement that BBD and advanced biofuel volumes will not grow is a missed opportunity for soybean farmers, the American Soybean Assoc. (ASA) said.

“The proposal doesn’t reflect the needs and capabilities of the domestic biodiesel and soybean industries, and doesn’t seem to reflect President Trump’s stated support and commitment to domestic biofuels and a strong RFS,” said Davie Stephens, ASA president.

The lack of growth in the EPA proposal is compounded by waivers of RFS volumes that the agency continues to grant to some petroleum refiners, ASA stated.

“We will continue to voice our concerns and demonstrate the capabilities we have to contribute to stronger growth in domestic biodiesel, creating higher values for U.S. soybeans, and all the economic, energy, and environmental benefits that come along with it,” Stephens said.

“We hope the EPA and this administration will recognize the opportunity they are missing and improve on these RFS volumes in the final rule.”

The EPA might as well start referring to the annual RFS levels as “suggestions” rather than “obligations” if the agency continues to dole out compliance exemptions to oil refiners without reallocating the lost volume, said Geoff Cooper, RFA president and CEO.

“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,” he said.

The National Biodiesel Board (NBB) announced July 8 it would begin an advertising campaign highlighting the economic damage to biodiesel and renewable diesel producers from the EPA’s small refinery waivers. The ads were scheduled to air for a week in Des Moines and Washington, D.C.

“Just last month, President Trump vowed that his administration would defend America’s farmers,” said Kurt Kovarik, NBB’s vice president of federal affairs. “Yet his EPA is preparing another flood of RFS exemptions that will harm farmers.

“The small-refinery exemptions destroy demand for hundreds of millions of gallons of biodiesel and renewable diesel, which means a loss of jobs and a loss of value for agriculture.”

U.S. Reps. Collin Peterson (D-Minn.) and Dusty Johnson (R-S.D.) introduced legislation in May designed to increase transparency for RFS small-refinery exemptions and ensure that any waived volumes are reallocated. House Resolution 3006 – the Renewable Fuel Standard Integrity Act of 2019 – was referred to the House Committee on Energy and Commerce.

In June, Rep. Francis Rooney (R-Fla.) introduced a measure to repeal the RFS mandate. The Eliminating the RFS and its Destructive Outcomes Act (H.R. 3427) has also been referred to the Committee on Energy and Commerce.

7/17/2019