This week, the EPA released its proposed level of ethanol that can be blended into gasoline in 2018. Unlike previous administrations that cut the level of ethanol use, the Trump administration kept the level of corn-based ethanol at the 15 bg mark called for in the RFS. They did, however, propose some reduction in the level of cellulosic production. The cellulosic RVO was lowered from 311 million gallons in 2017 to a proposed 238 million gallons in 2018, with the advanced biofuel requirement dropping from 4.28 billion gallons in 2017 to a proposed 4.24 billion gallons in 2018.
Kip Tom, Indiana corn farmer and member of the Growth Energy Board of directors, says this shows a real commitment to grow the renewable fuels sector. “This represents President Trump fulfilling his promise to support corn-based ethanol,” Tom stated. “He understands how important it is to rural America and to all Americans.”
Tom told HAT this ruling will provide a level of certainty and will spur growth and investment. He added U.S. corn growers have the capacity to meet increasing demand, “Right now, we have a stockpile of about 2.5 bb of corn. Just think how big that stockpile would be if we did not have the RFS.” He added that the reality is that U.S. producers are capable of producing a lot more corn.
The recently released Strategic Plan to Grow Indiana Agriculture calls for more ethanol production in the Hoosier State. Tom feels Indiana has the potential to become a bigger, ethanol producing state, “We have some strategic advantages in Indiana. When it comes to shipping ethanol to the East Coast, we can do it at less cost than other major states like Iowa.” He said the Hoosier State can grow more corn and, with more demand from renewable fuels, farmers will have the confidence to invest in more efficient technology to increase production while protecting the environment.
The one aspect of the EPA ruling that is not pleasing the industry is a reduction in the level of biodiesel production. Tom says there is more work to do on this issue, “We need to show the agency how important biodiesel is for the soybean industry. There are some tax issues here that need to be addressed.” He said the LDC plant in Claypool, IN, is a major market for Indiana soybeans.
“The EPA should be committed to diversifying the diesel fuel market and prioritizing advanced biofuels. Targets like this ignore reality and the law, inhibiting growth in the industry,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board. NBB supports increases in the volume requirements, believing the agency must be more aggressive in meeting Congress’s goals to prioritize and move this country toward advanced biofuels. This would create jobs, improve the economy, and benefit public health and the environment throughout the country.