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EPA receives comments on 2020 RFS levels

Ethanol industry seeks reallocation of lost demand from small refinery waivers.

Although the noise surrounding the latest Environmental Protection Agency (EPA) actions regarding the Renewable Fuels Standards has been loud from many in the countryside, official comments closed out the month of August to EPA regarding the volume obligation levels proposed at the end of July.

Though the proposal would maintain the current volume of conventional biofuels at 15 billion gallons, it would also significantly reduce the statutory volume for advanced biofuels and, consequently, the total renewable fuel volume. Furthermore, the proposal does not compensate for the 4 billion gallons of demand for biofuels that was eliminated by the ongoing RFS small refinery exemptions (SREs) to oil companies.

The Renewable Fuels Assn. (RFA) called on the EPA to follow the law and make up for the lost blending volumes resulting from the numerous secretive refinery waivers granted by the agency.

RFA President and CEO Geoff Cooper wrote. “Issuing small refinery exemptions after an RVO rule is finalized—as EPA has now done for the 2016, 2017 and 2018 compliance years—has the practical impact of reducing the effective RVOs to levels well below those specified in the rule.”

Cooper noted the formula used by EPA for calculating the annual percentage standards has always included a variable for “projected volume[s]” of gasoline and diesel for exempt small refineries, and EPA has in fact included non-zero values for these variables in past RVO rules. “Failing to include a non-zero projection of exempted gasoline and diesel from small refineries after the EPA has granted large-scale exemptions for three straight years defies reality and is a flagrant abuse of the Agency’s waiver authorities under the program,” he said.

RFA’s comments, as well as those submitted by the National Corn Growers Assn., said EPA must add back the 500 million gallons of renewable fuel the court determined were inappropriately waived by EPA in the court decision Americans for Clean Energy v. EPA.

Upon the initial release of EPA’s proposed volume obligations, National Farmers Union (NFU) expressed frustration that the agency neither increased biofuel use nor accounted for the damage inflicted on farmers and rural communities by the exemptions. In the organization’s comments, NFU President Roger Johnson echoed earlier misgivings and again urged EPA to address both issues in the finalized rule.

Chicken industry opposes increase

Meanwhile, the National Chicken Council in its comments to EPA said the proposed volume for 2020, coupled with the recent waiver that will increase the use of E15, is overly aggressive, overly reliant on corn-based ethanol, and will likely cause disruptions to the nation’s feed supply.

NCC stated, “It is clear that the mandated use of ethanol under the RFS has only served to add unprecedented volatility to the corn market during times of supply disruptions.”

NCC president Mike Brown said the organization believes that it is imperative for EPA to comply with the statute and Congressional intent in the consideration of its use of the “off-ramp” waiver authority as provided under Section 211(o)(7)(A) of the statute. “NCC suggests that a predictable, transparent off-ramp that would be fair to all involved be based on the USDA stocks-to-use-ratio in the June 2020 WASDE report.”

NCC suggests that if the stocks to use is more than 10%, that no waiver be offered. Partial waivers for the remainder of the compliance year (i.e. approximately six months) would be structured as follows:

Stocks to Use

RFS Waiver Amount

More than 10%

no waiver

7.5% to 10%

10%

6% to 7.49%

15%

5% to 5.99%

25%

below 5%

50%

“On two separate occasions, in 2008 and again in 2012, chicken producers were denied protection from the impact of the RFS mandate during times of market volatility – this cannot happen a third time,” Brown said.

TAGS: Policy
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