POET announced on Tuesday that it will idle production at its bioprocessing facility in Cloverdale. The process to idle the plant will take several weeks, after which the plant will cease processing of over 30 million bushels of corn annually and hundreds of local jobs will be impacted. In a press release, POET is placing blame on President Trump and his administration for the amount of smaller refiner exemptions the Environmental Protection Agency has handed out.
POET has reduced production at half of its biorefineries, with the largest drops taking place in Iowa and Ohio. As a result, numerous jobs will be consolidated across POET’s 28 biorefineries and corn processing will drop by an additional 100 million bushels across Iowa, Ohio, Michigan, Indiana, Minnesota, South Dakota, and Missouri.
“The Renewable Fuel Standard was designed to increase the use of clean, renewable biofuels and generate grain demand for farmers. Our industry invested billions of dollars based on the belief that oil could not restrict access to the market and EPA would stand behind the intent of the Renewable Fuel Standard. Unfortunately, the oil industry is manipulating the EPA and is now using the RFS to destroy demand for biofuels, reducing the price of commodities and gutting rural economies in the process,” said POET Chairman and CEO, Jeff Broin.
The RFS authorizes small refinery exemptions for refiners that (1) process less than 75,000 barrels of petroleum a day and (2) demonstrate “disproportionate economic hardship.” Over the past two years, the EPA has issued waivers to refineries owned by ExxonMobil, Chevron, and other large oil companies—none of which are small and none of which have economic hardship.
President Donald Trump this week asked cabinet members to appease farmers angry over the small refinery waivers. Following a rash of blowback from ethanol and commodity groups, Trump held a meeting to find a solution. Representatives from the Departments of Energy and Agriculture, along with the Environmental Protection Agency attended a two-hour meeting Monday on the subject, according to Reuters. However, no clear action has been identified so far.
The EPA has received 42 requests for small-refiner exemptions for 2018, while there are only 48 classified small refineries in the United States. The waivers exempt refineries from provisions in the Renewable Fuel Standard. Farmers argue that reallocating the exempted gallons of biofuel would be a good start in addressing the issue. The National Corn Growers Association says the waived volume now accounts for 4.04 billion ethanol gallons. NCGA President Lynn Chrisp says, “waivers reduce demand for ethanol, lower the value of our crop and undermine the President’s support for America’s farmers.”
Source: POET and NAFB News Service