RFS Proposal Falls Short for Ethanol

Jun 29, 2018  | 3 min  | Ep4345

The expansion in renewable fuel production is powering critics that are calling the government mandate for biofuel additives “outdated.”

Proponents of the homegrown product say the EPA has left ethanol running on empty.

John Torpy reports. Producer Contact: torpy@iptv.org

This week, the Environmental Protection Agency handed down new rules regarding the Renewable Fuel Standard, outlining clear winners and losers in the bio-fuels industry.

For conventional ethanol, EPA Administrator Scott Pruitt stuck with the status quo, proposing to keep the 2018 level of 15 billion gallons.

Some experts see keeping with existing productions levels could be a detriment to the ethanol industry.

Scott Irwin, Agricultural Economist – University of Illinois: “It is easy to establish that this was the most important policy decision EPA had to make for this rule making and it said “no way, no how are we going to listen to anybody and they are just going to charge ahead. If the zero reallocation holds, then this will be a major defeat for the ag interests and Senator Grassley.”

House Agriculture Committee ranking member Collin Peterson released a statement attacking the decision.

Rep. Collin Peterson, D – Minnesota “Our corn and soybean farmers are fed up with EPA undermining the RFS, and the harm being done by the Administration’s trade war. Enough is enough.”

 

Biofuels proponents argue the proposed target fails to leave room for future expansion of the industry. The Iowa Renewable Fuels Association, an ethanol advocacy group, says the 15 billion gallon mandate is a soft number due to the EPA’s controversial practice of issuing hardship waivers to some refineries.

Iowa Senator Charles Grassley agrees, and is concerned the actual amount of renewable fuels in the 2019 RFS will be closer to 13.5 billion gallons, which is a blow to farmers and hurts ethanol producers.

Senator Charles Grassley, R-Iowa: “We won't get much ethanol use because big oil does not want to use any product they don't control, and they don't control ethanol.”

 

There were a few renewable fuel producers who came out ahead under the new RFS goals. Advanced Biofuels, such as those derived from algae, saw a proposed increase of almost 600 million gallons for 2019. Standards for cellulosic ethanol were boosted 100 million and biomass diesel received a 330 million gallon bump.

The American Petroleum Institute, an oil industry trade organization, agreed with the EPA’s decision but believes the entire process is flawed.

Frank Macchiarola, API: “…the agency’s latest proposal for 2019 is yet another example – in fact it’s an annual example of a broken government program that needs a comprehensive legislative solution that includes the sunset of the program.”

 

For Market to Market, I’m John Torpy

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