The U.S. Environmental Protection Agency (EPA) has issued a proposed rule under the Renewable Fuel Standard (RFS) program that would set the minimum amount of renewable fuels that must be supplied to the market in calendar year 2020. President Trump claims to be a big supporter of renewable fuels, but his agency, the EPA in their latest proposed rule, released over the holiday weekend, would hurt ethanol demand.
“The proposed rule is a direct contradiction to the President’s commitment to the RFS and to the ethanol industry,” said Geoff Cooper, with the Renewable Fuels Association. The proposed level of ethanol to be blended in 2020 would be 15 billion gallons, unchanged from the level set in 2019. Cooper notes the agency did not address the issue of small refinery wavers or the court-ordered make up of lost demand from 2016,
“We are frustrated the EPA did not account for potential waived gallons going forward in the proposed rule,” said National Corn Growers Association President and Nebraska farmer Lynn Chrisp. “If the EPA continues to grant retroactive waivers, the RVO 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.”
Cooper said his group is likely going to have to take the EPA to court, yet again, to get them to follow the law. American Coalition for Ethanol (ACE) CEO Brian Jennings says the proposal “fails to restore a 500-million-gallon shortfall the D.C. Circuit Court ordered EPA to handle following the Americans for Clean Energy et al v. EPA lawsuit, which recently resigned EPA Assistant Administrator for Air and Radiation William Wehrum told ACE members EPA intended to address in the 2020 proposed rule in April.”
Several weeks ago, President Trump visited an ethanol plant in Iowa to announce year round sales of E-15. But Cooper says this EPA rule will negate much of that gain, “Year-round E-15 does not get us much, about 50 million gallons of new ethanol demand this year as a result of year round E-15 sales. This pales in comparison to the loss we will see from wavers.” Cooper says the proposal “completely betrays President Trump’s commitment” to uphold the integrity of the RFS by neglecting to prospectively reallocate small refinery exemptions and by blatantly ignoring a court order to restore improperly waived gallons.