Trump supports additional year-round ethanol access

Biofuel groups see move as welcomed demand support amid ongoing EPA actions that have deteriorated ethanol use.

Jacqui Fatka, Policy editor

April 12, 2018

3 Min Read
POET ethanol plant in Marion, Ohio
Pictured is POET's Marion, Ohio biorefining plant. The plant expanded capacity in 2018 from 70 million gallons to 150mg.Jacqui Fatka

President Donald Trump announced Thursday that he supports approval for year-round consumer access to E15, a high-octane fuel composed of 15% ethanol and 85% gasoline. This is welcome news for corn farmers, as it offers a demand boost to a market that has taken many hits in recent months both on the demand front as well as actions by the Environmental Protection Agency that have undermined the Renewable Fuel Standard (RFS).

Trump’s commitment to lifting outdated Reid vapor pressure (RVP) limits on summertime sales of E15 without tying RVP relief to any refinery-backed limits on renewable identification numbers (RINs) and the RFS was a move welcomed by biofuel supporters.

“We applaud President Trump for embracing a commonsense fix to create a level playing field for cleaner, more affordable fuel options during the summer driving season,” Growth Energy chief executive officer Emily Skor. “The White House clearly understands that RVP relief will expand a growing market for America’s farmers while letting consumers pick the fuel of their choice. This simple fix allows retailers to offer better options alongside traditional blends all year long."

Kyle Gilley, senior vice president of external affairs and communications at POET, said Trump’s action “will grow biofuels and create market demand for the commodities raised by farmers struggling with economic hardships across the Midwest. Small refiners already received their reprieve through recently exposed waiver requests from the EPA. We are grateful President Trump is following through on his commitment to protect the Renewable Fuel Standard and support rural America.”

Renewable Fuels Assn. (RFA) president and CEO Bob Dinneen added, “If true, the report suggests President Trump intends to fulfill his commitment to a 15 billion gal. RFS, but for that commitment to be fully realized, EPA Administrator (Scott) Pruitt must cease his campaign to destruct biofuel demand with unjustified waivers and other policies meant to undermine the RFS.”

Geoff Cooper, RFA executive vice president, detailed in an online post on Thursday the demand destruction resulting from recent EPA actions, including a settlement waiver for more than half of Philadelphia Energy Solutions’ (PES) RFS compliance obligations for 2016 and 2017 as part of a bankruptcy court agreement and offering waivers to small refineries that later were found to actually be to some of the nation’s largest refineries.

“The small refiner exemptions, the PES settlement and EPA’s failure to enforce the statutory 2016 RFS requirement (as ordered by the courts) have effectively reduced the 2016 and 2017 RFS volumes each by 1 billion gal. or more. The result has been a glut of unneeded RIN credits and sharply lower RIN prices,” he said.

Cooper detailed how RIN prices were around 90 cents in late November 2017 when the ethanol blend rate hit a record high, but then “secret small refiner waivers, the bankruptcy bailout, White House discussions of a RIN price cap and other actions have torpedoed the RIN market, leaving prices at a three-year low near 30 cents last week.

“RIN stocks are now plump, and RINs are cheap enough that many would opt to comply by purchasing RINs rather than taking steps to expand ethanol blending,” Cooper wrote.

Advanced Biofuels Business Council executive director Brooke Coleman stated, “The President clearly understands the need to help farmers, particularly after the EPA’s backdoor handouts destroyed a huge share of the market for biofuels. He knows that rural communities are hurting, and this is an easy way to help, simply by lifting an outdated regulation against wider choices at the pump -- but refiners have held E15 hostage for years, and they always want more. For this to help farm families, it will be important that the White House continues to steer clear of refiner-backed changes that would gut the RFS.”

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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