Doran: False hope and the RFS

While cleaning out my inbox I noticed several emails from various farm groups in early October that are still relevant in light of the U.S. Environmental Protection Agency’s recent move to finalize the 2020 Renewable Fuel Standard blending requirements.

The good news is the EPA ruled that “conventional” biofuel volumes, primarily met by corn-based ethanol, will be maintained at the 15 billion gallon target set by Congress for 2020.

The bad news is the EPA didn’t adequately address the loss of gallons through Small Refinery Exemptions.

I wrote recently in AgriNews that the EPA finalized a projection methodology based on the 2016-2018 annual average of exempted volumes had EPA strictly followed the Department of Energy recommendations of 770 million Renewable Identification Numbers in those years, including granting 50% relief where DOE recommended 50% relief.

“This is our general approach to adjudicating Small Refinery Exemption petitions going forward, beginning with 2019 SRE petitions and including 2020 SRE petitions and beyond, we are committed to following the DOE recommendations. By proposing effectively 15.8 billion gallons for 2020 we will ensure meeting our target of 15 billion gallons,” EPA noted in a statement.

Biofuel industry and farm organization representatives refuted EPA’s claims in the ruling and expressed disappointment that the final rule uses a three-year average of DOE-recommended waivers as an estimate for 2020 waivers rather than the average of actual gallons waived by the EPA through SREs.

Critics said the ruling is problematic because DOE’s projections for the volume of biofuels that will be exempted are often much lower than the actual SRE exemptions.

Between 2013 and 2015, EPA granted no more than eight small refinery waivers per year. The current administration retroactively approved 19 waivers for 2016, granted 35 waivers in 2017 and another 31 in 2018 — ultimately exempting more than 4 billion gallons of renewable fuel obligations over the past three years.

In early October, the National Corn Growers Association welcomed an announcement by President Donald Trump directing the EPA to follow the letter of the law and keep the RFS whole.

“The announcement that EPA will reopen the rulemaking for the 2020 RFS volumes and propose to account for waivers in the volume requirements allows EPA to follow the law and restore integrity to the RFS,” the NCGA press release stated Oct. 4.

“We’re very grateful the president listened to our concerns and is upholding his commitments to put the RFS back on track,” NCGA President Kevin Ross said at the time.

“Corn farmers weren’t shy in telling the president that the impact of these waivers would lead to significant consequences for farmers, folks working at ethanol and biodiesel plants, and the countless other rural jobs that depend on this market.”

Earlier this year, Ross joined President Trump at an Iowa ethanol plant and pressed that he address the impact waivers are having on the RFS.

NCGA has advocated that the EPA use its available tools to account for expected waivers in the annual Renewable Volume Obligation rulemaking so that waivers do not reduce the RFS volumes.

The EPA, to date, had ignored these calls and the clear requirement of the law, refusing to take steps to keep the RFS whole or even consider comments pertaining to waived gallons in RVO rulemakings.

“The president is finally telling the EPA that enough is enough, they must follow the law, and we appreciate that,” Ross said in October.

“NCGA is thankful to our elected senators, representatives, governors and other state lawmakers who consistently pressed the administration to find a real solution to the harm caused by refinery waivers. A special thanks to USDA Secretary Perdue who continues to be an outspoken advocate on this issue and for farmers. We stand ready to work with them to ensure these commitments are finalized.”

“In addition to the commitment to redistribute waived gallons, the administration is also proposing to take further steps supported by farmers, including removing additional barriers and supporting infrastructure to help grow demand for higher blends of ethanol,” the October press released concluded.

And here we are today…