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Bill increases transparency of RFS waiver process

Bipartisan solution requires EPA to reallocate exempted gallons so biofuel targets are met.

After reports indicated that the Environmental Protection Agency changed rules to help profitable refineries receive biofuel waivers, bipartisan legislation in the Senate looks to correct EPA’s mismanagement of the small refinery exemption provision of the Renewable Fuel Standard (RFS).

Sens. Deb Fischer (R., Neb.) and Tammy Duckworth (D., Ill.) introduced the bipartisan RFS Integrity Act of 2019. This legislation seeks to provide more certainty for rural America by bringing more transparency and predictability to EPA’s small refinery exemption process. The bill would require small refineries to petition for RFS hardship exemptions by June 1 of each year. This change would ensure that EPA properly accounts for exempted gallons in the annual renewable volume obligations it sets each November.

Under President Donald Trump, EPA has retroactively granted more than 50 so-called hardship waivers for small refineries, effectively erasing 2.61 billion gal. worth of the RFS blending obligations for the 2016 and 2017 compliance years, and it has 39 more requests pending for 2018.

“In the past, EPA has issued small refinery exemptions after the renewable volume obligations have already been determined. That’s unfair, and it hurts our farmers and ethanol producers. This bill would shine a light on what’s been an obscure exemption process and help promote economic growth in rural America,” Fischer said.

“Farmers across Illinois and throughout the Midwest are hurting, and ethanol plants are idling while this Administration is abusing the small refinery exemption program to undermine the bipartisan Renewable Fuel Standard. I am proud to work with Sen. Fischer to introduce this bipartisan legislation to bring much-needed transparency to the waiver process and prevent it from being misused to benefit billion-dollar oil companies at the expense of hardworking Americans,” Duckworth added.

The bill also increases transparency by ensuring that key information surrounding small refinery exemptions is made publicly available. Additionally, this legislation requires EPA to report to Congress on the methodology it uses when granting small refinery exemptions -- a process that has been repeatedly carried out behind closed doors with little to no congressional oversight.

American Coalition for Ethanol (ACE) chief executive officer Brian Jennings said, “The uptick of waivers without reallocation as required by law also means the congressional intent of the RFS is undermined. This legislation would help ensure EPA’s abuse of small refinery exemptions is put to a stop by requiring timely reallocation of any granted waiver and ensuring the statutory RFS volumes are enforced. ACE is grateful for the leadership of Sens. Fischer and Duckworth to help get the RFS back on track by following the rule of law.”

“EPA’s track record on handouts to big oil through small refinery exemptions has eliminated markets at a time when growers and producers face true economic hardship,” Growth Energy CEO Emily Skor noted. “U.S. ethanol consumption recently fell for the first time in 20 years. Across the heartland, many biofuel plants have shut their doors or idled production. Farm income plummeted $11.8 billion over just the last three months -- the steepest drop since 2016. It’s clear that the ‘economic hardship’ is happening in America’s farm belt – not in oil company boardrooms."

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