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EPA Seeks Input on E15 Labels and RFS General Waiver

Bloomberg writers Jennifer A Dlouhy and Kim Chipman reported late last week that, “The Trump administration advanced a flurry of biofuel policy proposals Friday, including plans that could help ethanol producers sell more of the corn-based fuel.

“Final decisions about those possible changes to biofuel-blending mandates and warning labels at pumps dispensing higher-ethanol E15 gasoline will now fall to President-elect Joe Biden. The Environmental Protection Agency’s proposals ensure the Biden administration will inherit battles over 16-year-old requirements to blend renewable fuels into gasoline and diesel that bedeviled President Donald Trump.

The Trump administration also is set to hand off decisions on dozens of small-refinery requests to be exempted from 2019 and 2020 renewable fuel requirements, given upcoming Supreme Court scrutiny of those waivers. The prospect of last-minute exemptions had galvanized biofuel interests in recent days, prompting a lobbying frenzy with direct appeals to Trump and EPA Administrator Andrew Wheeler.

The Bloomberg article explained that, “Under one of the EPA proposals advanced Friday, the agency is seeking to modify or even completely scrap requirements for a warning sticker wherever pumps dispense the E15 gasoline blend containing 15% ethanol. The current orange-and-black sticker cautions that E15 should only be used in passenger vehicles no older than 2001, and should not be used to fuel up boats or other gasoline-powered equipment because of the risk of damage and violating federal law.”

Friday’s article added that, “The EPA also is proposing changes that could make it easier to store higher-ethanol blends in existing underground storage tanks. Emily Skor, chief executive of Growth Energy, called the proposal a ‘first step toward removing onerous labeling and underground tank requirements and expanding access to E15 for American drivers.'”

Also last week, Reuters writer Stephanie Kelly reported that, “The Trump administration is considering requests from the oil refining industry and its backers for a sweeping nationwide waiver to exempt them from their obligations to blend biofuels, a measure they argue would help them weather the economic impact of the coronavirus pandemic.

“U.S. President Donald Trump’s Environmental Protection Agency (EPA) is requesting comment on the potential general waiver for the 2019 and 2020 compliance years and also is proposing a new rule that would remove or alter the labeling for retail gasoline that contains higher ethanol blends, according to notices to be published to the Federal Register on Tuesday.

The proposal for a general waiver could open the door to a contentious debate between the oil and biofuel industries just as Trump leaves the White House.

The Reuters article noted that, “It is unclear whether the next EPA under President-elect Joe Biden, who takes the oath of office next Wednesday, similarly would consider the requests for a general waiver, as the comment period on the requests ends after Trump will have already left office. Both the EPA and Biden’s transition team did not respond to requests for comment by the time of publication.

“While the waiver would save the refining industry money at a time of low fuel demand, biofuels advocates harshly oppose the idea, arguing it risks hurting farmers by undermining demand for products like corn-based ethanol.”

More broadly, Jerry Perkins reported last week at Successful Farming Online that, “Higher corn prices are roiling the U.S. ethanol industry, but the full impact of the corn price spike might not be felt for weeks.

“The Renewable Fuels Association (RFA) recently estimated that about two dozen of the 200 ethanol plants in the U.S. are idled and another two dozen have reduced their production rates.

USDA Daily Ethanol Report. USDA- Agricultural Marketing Service (January 7, 2021).

“Additionally, Scott Richman, chief economist for the RFA, noted, ‘The corn market started moving higher a month ago and has spiked over the past couple of days.’  With the higher prices of corn and the worsening impact of the pandemic on fuel consumption, ethanol plant margins turned negative in early December, he said, and had recently started to return to break-even levels when the most recent corn price spike hit. ‘This latest move in the corn rally will likely have a negative impact on margins,’ he stated.”

Separately, Bloomberg writer Kim Chipman reported late last week that, “Green Plains Inc. Chief Executive Officer Todd Becker is getting closer to his goal of never having to worry about U.S. ethanol policy again.

Instead of awaiting Washington’s next move in the industry’s battle with Big Oil for share of gasoline tanks, Becker is working to transform Green Plains into an agricultural technology company focused on extracting more oil and high-value proteins from corn, with ethanol merely a byproduct.

“Last week, the company joined with asset management firm Ospraie Management LLC to buy a majority stake in Fluid Quip Technologies as part of Green Plains’ push to make protein-dense ingredients used in products like animal feed. Investors so far approve, with Green Plains’ stock rising 37% since Jan. 4, the day before the deal was announced.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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