By MELISSA HART

Michigan Correspondent

ANN ARBOR, Mich. — Frustrations and reasonable solutions came up at last week’s U.S. EPA hearing in Ann Arbor on its proposed rule to set 2020 renewable volume obligations (RVOs) and the 2021 RVO for biodiesel under the federal Renewable Fuel Standard (RFS).

Kent Englebrecht, trade manager for ADM, boiled it down to two requests: “First, set volumes at truly reasonable and achievable levels; second, ensure that the entire marketplace can rely on those volumes.”

His was one of many comments after an opening statement from Paul Machiele, EPA Fuel Programs Center director, in which he pointed out that under the Clean Air Act, EPA is required to establish the RFS while taking into consideration the specified volume targets set forth by Congress.

But Congress also provided EPA the authority to reduce those targets under certain conditions. Under the proposed rule released July 5, the agency would require 20.04 billion gallons of all types of renewable fuel to be blended with the U.S. petroleum fuel supply for 2020, of which 15 billion are corn-based ethanol.

The proposed RVOs also includes 5.04 billion gallons of advanced biofuel, 2.43 billion gallons of biomass-based diesel, and 540 billion gallons of cellulosic biofuel.

“With regard to advanced biofuel and total renewable fuel, the statute provides waiver authorities that permit reductions in the statutory volume targets under certain circumstances,” Machiele said. “We believe that some of those circumstances will apply in 2020 as they did in previous years.

“More specifically, due to the fact that cellulosic biofuel has not come online as fast as Congress had envisioned, the volume targets for cellulosic biofuel specified by Congress in the Clean Air Act for 2020 is not expected to be achieved.”

While the statute does not specify applicable volume targets for biodiesel after 2012, the EPA still has to determine the appropriate volume. In the past, it has come up with a requirement that still allowed for growth in other advanced biofuels in meeting the overall advanced standards. For 2021, the agency is proposing the same volume requirement as for 2020.

In addition, it is proposing to address the remand of the 2016 annual rule by the D.C. Circuit Court of Appeals. After considering relevant factors, including the limited opportunities for the market to use biofuel beyond the volumes it is proposing for 2020 – and a consideration of burdens place on obligated parties when setting retroactive standards – EPA decided to retain the 2016 required volumes.

Englebrecht urged EPA to maintain 15 billion gallons of conventional ethanol and 504 million gallons of cellulosic in the 2020 RVOs. He also asked it to raise the overall advanced volumes by 500 billion gallons and set a volume of at least 2.76 billion gallons of biodiesel for 2021.

John Linder of Ohio, representing the National Corn Growers Assoc. (NCGA), pointed to this year’s delayed planting season and the detrimental effect it has had and will continue to have on the farm economy. He also said the EPA is undermining the RFS – and claimed RVO requirements are meaningless – with the “massive expansion” of retroactive refinery waivers.

He relayed NCGA’s urging to raise the RVOs in order to support the American farmer.

The chief economist with the Renewable Fuels Assoc., Scott Richman, said, “By neglecting to respectively redistribute volumes lost to small refinery exemptions, and by ignoring a court order to restore improperly waived gallons, EPA’s proposed rule betrays President Trump’s commitment to uphold the Renewable Fuel Standard.

“Unfortunately, the market has no faith that the proposed 2020 RVOs will result in biofuel blending volumes consistent with RFS standards that were set by law, including the 15 billion-gallon conventional renewable fuel requirement.”

Tom Brooks, representing Western Dubuque Biodiesel, said unlike foreign oil, the spending that comes from biodiesel production and other renewable fuels generates significant household growth in rural communities. He urged the expansion of biodiesel requirements and other renewable fuels.

Not all-in for RVOs

The opposing view was also heard, as Tim Hogan of the American Fuel and Petrochemical Manufacturers said the EPA’s proposed mandates for biofuel does not reflect the low market demand for renewable fuel.

And Scott Hayes, with Toledo Refining Co., said the RVO proposal is overly aggressive and will only result in a foreign biofuel mandate that will do nothing for the American farmer or advance U.S. energy security. He wants lower RVOs and the institution of small-refinery exemptions.

Katie Fletcher of the American Coalition for Ethanol commented on the lack of EPA addressing the remand of the 2016 annual rule by the D.C. Circuit Court of Appeals. “The message EPA is sending is that it will do whatever it takes to help relax RFS compliance for refiners, but when it comes to farmers and renewable fuel producers, EPA is unwilling to abide by a court order to fulfill the letter and the spirit of the law.

“Economic hardship is real, but not for oil refiners. The fact that large, profitable oil refiners such as Exxon Mobil and Chevron are among those who received RFS waivers is insult to an injured rural America,” she said.

Matt Stutzman, a soybean grower from Adrian, Mich., and a representative of the American Soybean Assoc., was disappointed the RVOs provide zero growth for biodiesel and hardly any growth in advanced biofuel. He also said it doesn’t reflect Trump’s commitment to a strong RFS.

Michigan corn grower Jeff Sanborn added with the challenging spring, he is deeply disappointed in the EPA’s handling of the RVOs and the waivers it has allowed for oil refiners. He went on to remind them how important ethanol is to Michigan farmers.

Thomas Vine of the Biomass Power Assoc. said it’s time for the government to do its job and include electricity in the final RFS rule, while William Held of Specialized Biogas Services asked that landfill gas also be included in its game plan.

As an investor in renewable fuel, Luke Morrow of Morrow Renewables asked EPA to commit to restoring confidence in the market.

“The market has been in a freefall this entire year, and it’s time to restore confidence in our renewable energy program that works, by publishing an RVO that restores the intent of the law as well as the supply and demand dynamic necessary for liquidity and transparency,” he said. “We need your help to rescue the RFS from the politicians.”

Private citizens Aaron Walsh and Brian Carron also testified. Walsh said he loves ethanol and gave up his car and is saving up to buy a flex-fuel vehicle. He underlined the importance he feels ethanol plays in environmental conservation.

Carron, a retiree, wanted to speak on behalf of the driving public, voicing concerns about the cost of the RFS program. He prefers “the whole thing be scrapped.” He also said he is concerned with the politicization of the program and feels the focus has now switched to keeping the farmer happy while pandering for their vote.

The official record of this hearing will be kept open for 30 days to provide for submission of rebuttal and supplemental testimony. Details on where to submit written comments can be found in the proposed rule published July 29 in the Federal Register; the comment period closes August 30. For details, visit www.federalregister.gov and search with “Renewable Fuel Standard EPA proposed rule,” then select “past 30 days” under “Publication Date.”