Earlier this month, Reuters writers Stephanie Kelly and Jarrett Renshaw reported that, “U.S. Environmental Protection Agency Administrator Andrew Wheeler told a biofuels company on [December 5th] that the agency is working to address industry concerns over biofuel blending rules that have sparked outrage across the Farm Belt, according to a source familiar with the matter.
“Biofuel producers and representatives of corn farmers are unhappy with the EPA’s expanded use of waivers exempting oil refineries from their annual ethanol blending requirements. They say that agency’s efforts to address the issue with proposed tweaks to the 2020 blending requirements are not enough.
“The EPA plans to send the proposed 2020 blending mandates to the White House’s Office of Management and Budget for approval by the end of the week, according to two sources familiar with the matter. It is not clear whether that plan will include any changes since the agency unveiled the proposal in October.”
And last week, Stephanie Kelly reported at Reuters that,
U.S. Senator Chuck Grassley said on [December 10th] he has been assured by the White House that 2020 biofuel blending mandates will be finalized in accordance with a September agreement between the administration and biofuel and corn producers.
Ms. Kelly explained that, “In September, the Trump administration came to an informal agreement with the ethanol industry and its backers to adjust refiner quotas higher in 2020 to make up for the EPA’s recent expanded use of waivers exempting some smaller facilities under financial strain from their blending obligations.
“But in October, after pushback from the oil industry, the EPA unveiled a proposal that contained some differences that biofuel producers said amounted to a betrayal of the September agreement.”
With this background in mind, Bloomberg writer Jennifer A Dlouhy reported this week that, “The Trump administration on Thursday set relatively flat quotas for plant-based fuels in 2020, rebuffing ethanol and biodiesel allies who said the targets don’t do enough to support the industry.
“The Environmental Protection Agency will require refiners to use 20.09 billion gallons of renewable fuel in 2020, a 0.85% increase over the 2019 requirement for 19.92 billion gallons, largely tracking a proposal released in July.
The agency is also sticking with its plan for adjusting blending requirements to offset waivers exempting some refineries from the mandates, despite criticism from biofuel allies in politically important farm states that the approach is inadequate.
The Bloomberg article noted that, “EPA officials say that with those adjustments, the agency’s plan effectively lays out a 2020 target for 15.8 billion gallons of conventional renewable fuels, including corn-based ethanol, with that translating to 15 billion gallons once refinery waivers are factored in. A senior EPA official said the strategy allows the agency to better ensure targets are actually met while still giving small refineries relief from the requirements when appropriate.”
Ms. Dlouhy stated that, “Under the EPA rule, refiners are expected to use 5.09 billion gallons of advanced biofuel, including 590 million gallons of cellulosic biofuel. And in 2021, refiners and fuel importers will be required to use 2.43 billion gallons of biomass-based diesel made from soybeans and waste cooking oil — identical to the 2020 target.”
“For weeks, biofuel producers, farmers and politicians from the U.S. Midwest unsuccessfully implored administration officials — including President Donald Trump himself — to alter the EPA’s approach so that it better assures biofuel quotas aren’t undermined by refinery waivers. They say the EPA measure falls short by basing adjustments on a three-year average of Energy Department recommendations on those refinery waivers — rather than the higher number the EPA has actually granted,” the Bloomberg article said.
DTN Ag Policy Editor Chris Clayton reported on Thursday that, “Biofuel advocates simply wanted EPA to offset its annual volume of small-refinery exemptions by requiring other petroleum refineries to pick up any volume of gallons that were granted as exemptions. Instead, EPA came up with a three-year-average plan the leaves uncertainty over whether 15 billion gallons of biofuels are actually used.
“EPA, though, maintains its plan keeps to the president’s promise made last fall. Under the plan, EPA is using a three-year methodology based on how the agency granted small-refinery exemptions for the years 2016-2018. EPA noted the Department of Energy had recommended 770 million gallons of small-refinery relief during that time. EPA will use this three-year average volume calculation from now on to grant small-refinery exemptions for 2019, 2020 and beyond.”
Donnelle Eller reported on Thursday at The Des Moines Register Online that,
Instead of using a three-year rolling average of the actual gallons waived for refineries, EPA will use an average of the gallons that the Energy Department recommends waiving, which has been significantly less since 2016.
“‘Apparently President Trump doesn’t care about his promise to Iowa’s farmers,’ said Jim Greif, a Monticello farmer who is the Iowa Corn Growers Association board president. ‘He had the opportunity to tell his EPA to stick to the deal that was made’ in September.”
Several lawmakers, as well as Iowa GOP Governor Kim Reynolds, expressed displeasure with the EPA announcement on Twitter:
These magic words from Oval Office Sept 12 agreement are missing from 2days EPA rule on Renewable Fuel Standard “three year rolling average based on hard data and actual waived gallons” EPA changed deal from what was agreed 2 w Pres Trump Will hold Wheeler’s feet to fire on RFS— ChuckGrassley (@ChuckGrassley) December 19, 2019
We were guaranteed a deal in September, and we were assured of that same deal in October, yet @EPA rolled out, and has now finalized, a different proposal. It’s no wonder trust has been lost. My full statement: https://t.co/103WVtqY9T— Joni Ernst (@SenJoniErnst) December 19, 2019
In a time of great uncertainty for agriculture, we need policies that support our Michigan corn and soybean farmers. The Trump Administration’s final biofuels proposal falls far short of what was promised to farmers. https://t.co/b92Cmh2lFl— Sen. Debbie Stabenow (@SenStabenow) December 19, 2019
EPA Administrator Wheeler should know we are not done holding him to the agreement we reached with President Trump in the Oval Office on September 12th. My statement: https://t.co/aMldDHN6J3— Gov. Kim Reynolds (@IAGovernor) December 19, 2019
The EPA’s announcement today is unacceptable, but sadly not unexpected.— Rep. Cindy Axne (@RepCindyAxne) December 19, 2019
After years of abuse of small refinery exemptions, this administration had a chance to do right by farmers, but instead it doubled down on undermining the RFS and hurting Iowa.https://t.co/zbFfBfgiTY
The administration has committed to reaching 15 billion gallons of ethanol-blended fuel next year, and South Dakota will hold them to it. Read my full statement on the new RFS rule 👇https://t.co/tlwtEhfAxL— Senator John Thune (@SenJohnThune) December 19, 2019
"The final RFS rule set forth by the EPA is another slap in the face to Iowa’s farmers and ethanol producers.," Dave said in response to the @EPA's final RFS rule for 2020. Read Dave's full statement in the link. #RFSworks https://t.co/YsjSy6TFZ4— Dave Loebsack (@daveloebsack) December 19, 2019
While the final RFS volumes rule is an improvement over the previous one, I am wary—as are many Nebraskans—that the @EPA will follow the law and meet these obligations like they say they will.— Senator Deb Fischer (@SenatorFischer) December 19, 2019
Read my full statement: https://t.co/WDOBaJh7qU