Trump unable to broker deal with biofuels stakeholdersTrump unable to broker deal with biofuels stakeholders
Biofuel groups continue to advocate of regulatory parity of E15 as the win-win solution to keep RIN prices at bay.
March 2, 2018
At the White House Thursday, President Donald Trump met with members of the biofuels industry and oil refiners along with U.S. Sens. Chuck Grassley (R., Iowa), Joni Ernst (R., Iowa), Ted Cruz (R., Texas) and Pat Toomey (R., Penn.) to discuss the Renewable Fuel Standard (RFS).
In a joint statement from Cruz and Toomey following the meeting, they said it was a productive meeting with senators on both sides, along with representatives from the unions, ethanol and refining industries, and motor fuel retailers. They said they were grateful for Trump’s commitment he’s displayed to continue talks that will result in a “win-win solution for both parties.”
“We are encouraged that President Trump recognizes the importance of providing relief from crushing RINs costs and expanding the potential market for ethanol that will benefit both Iowa farmers by letting them sell more corn, and blue-collar refinery workers by saving their jobs in states including Pennsylvania and Texas,” said Cruz and Toomey. “We are making real progress, and, with the President's leadership, we believe we can and will ultimately solve the problem."
Grassley said in his own statement following the meeting that both sides made their case and the only agreement was to look at economic studies for impact.
“No decisions were made. Low corn prices are already squeezing farmers’ bottom lines. If the RFS were undermined with a RIN price cap or waiver, that would be made even worse. Thousands of jobs in rural America could be lost,” Grassley said.
Grassley said an emerging solution appears to be year-round E15, which would drive down RIN prices. “After crossing the 15 billion gallon a year threshold, RIN prices would drop dramatically and remain low,” he said.
Iowa Renewable Fuels Assn. executive director Monte Shaw said, “President Trump is a businessman” and that clearly showed up in the meeting.
“Trump quickly grasped how allowing the year-round sale of E15 would increase ethanol blending and the supply of RFS credits, thereby lowering their cost for refiners,” Shaw said. “While refiners continue to ask the President to abdicate his support for the RFS, the meeting clearly highlighted that E15 can boost biofuel use and lower RFS credit prices without destroying the RFS. As the President continues to study this issue, we are confident that he will agree that year-round E15 sales are the true win-win.”
Bob Dinneen, president and CEO of the Renewable Fuels Assn. (RFA), said the organization continues to believe the appropriate response to unfounded concerns about RIN prices is to expand ethanol use by providing RVP parity, allowing E15 and higher blends to be sold year-round. “We are pleased today’s conversation focused positive attention on this important issue,” he noted.
National Corn Growers Association (NCGA) president Kevin Skunes said for farmers, ethanol blending equals corn demand.
“Farmers care about RIN values, not because we want them to be high, but because we want the RIN market mechanism to work freely to incentivize blending. Increased blending will, in turn, lower RIN values, exactly the way the RFS is intended to work. Government manipulation of the RIN market, on the other hand, disrupts the incentive to blend,” Skunes said.
NCGA has joined with others in seeking regulatory parity for E15 and higher blends as the best policy answer for refiners’ concerns.
“Allowing the RIN market to operate freely with year-round sales of E15 would increase the production and consumption of renewable fuels, increase the supply of RINs available for compliance and lower RIN values. Increased use of biofuels is already moving us in this direction, and increased use of E15 and higher blends will get us there faster,” he added.
Jeff Broin CEO of POET - the largest ethanol producer - said nothing new was discussed in the meeting.
“It’s clear from this conversation that another refinery bailout is more important to Sen. Cruz and the EPA than the economic crisis facing Midwest voters at the moment,” Broin said. He added the issue will continue to play out, but he also said biofuel interests will protect their interests as well as for farmers and consumers.
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