POET is idling its Cloverdale, Indiana ethanol processing plant, and the company announcement this week went straight to the issue of small refinery waivers granted by the EPA, most recently Friday’s move of 31 more exemptions from the Renewable Fuel Standard.
The next several weeks the Putnam County plant will undergo the idle process eventually impacting the processing of over 30 million bushels of corn each year and hundreds of local jobs. The company has already reduced production at half of its 28 locations.
Renewable Fuels Association President and CEO Geoff Cooper says the waivers represent a significant broken promise on the part of President Trump since those waivers constitute another 1.43 billion gallons of lost RFS demand.
“We don’t understand how in the world EPA could agree with these refiners that they’re somehow suffering economic harm due to the RFS when we’ve had RIN prices at historic low levels for the better part of a year and a half now,” Cooper said. “Obviously the refining sector is doing just fine. They’re printing money right now. So, just very disappointing, very surprising in light of some of the conversation we’ve had directly with the president back in June.”
Cooper said they’ve repeatedly attempted to work with the president and EPA to get the RFS back on track.
“We haven’t gotten very far, quite obviously,” he said. “It doesn’t feel like our message is getting through to EPA or the White House on this issue, and what they’re doing is illegal frankly. So, we have no other choice than to take this to the court system. We have done that, we have sued EPA in three separate actions dealing with small refiner exemptions, and this most recent action by EPA just further underscores that that’s what we need to do. We need to fight the agency in court to try and rectify the situation and repair the damage that agency has done to our industry.”
According to the Indiana Corn Growers Association, Indiana ethanol plants generate more than 700 direct jobs with indirect impact on thousands of others. More than $2.5 billion in Indiana economic activity is attributed to the ethanol industry each year.
“These waivers directly impact rural America and corn farmers,” explained ICGA President Sarah Delbecq, who is a farmer from Auburn, Ind. “With immense uncertainty now and in the future for the ag economy due to planting delays and trade disruptions, more waiver abuse would only exacerbate the damage to farmers’ bottom line and overall demand for corn. To offer a source of stability, the EPA needs to fulfill the intended goals and promises in the original RFS.”
ICGA remains critical of EPA’s granting of these waivers, which takes billions of gallons of ethanol out of the obligated levels defined in the Renewable Fuels Standard.
The EPA’s waivers negatively impact Indiana corn farmers. Specifically, by 2018, the EPA had already waived 2.64 billion gallons of ethanol, which nearly offset Indiana’s entire corn output from 2017. Then came last week’s grant of the additional 31 waivers.
Indiana ranks as the fifth-largest producer of U.S. ethanol, generating more than 1.1 billion gallons per year. The Hoosier State produces 8.1 percent of the total U.S. ethanol output. Nearly half of Indiana’s corn crop goes toward ethanol production, which represents nearly $300 million in additional farmer income.
The SREs offset the gains made in May by ethanol supporters from the Administration’s rule change of allowing year-round sales of E15, which is a blend of 15 percent ethanol with gasoline. The RFS authorizes exemptions for refiners that process less than 75,000 barrels of petroleum per day and show economic hardship.