In an attempt to limit the biofuel demand damage due to small refinery exemptions, House Agriculture Committee chairman Collin Peterson (D., Minn.) and Rep. Dusty Johnson (R., S.D.) introduced the Renewable Fuel Standard Integrity Act of 2019. The legislation would require small refineries to petition for Renewable Fuel Standard (RFS) hardship exemptions by June 1 each year. The change would ensure that the Environmental Protection Agency properly accounts for exempted gallons in the annual renewable volume obligations it sets each November.
EPA granted 54 waivers to refineries for the 2016 and 2017 RFS compliance years, totaling 2.61 billion ethanol-equivalent gallons being taken out of the marketplace. By law, the RFS requires that EPA make adjustments when determining future biofuels targets to account for waivers to ensure that the overall biofuel targets are not reduced by waivers. However, the agency is not accounting for these waivers, and the demand for biofuels is being undercut.
By setting a June 1 petition submission deadline each year, EPA will have time to account for renewable fuel gallons stripped from the market due to these waivers. The bill also increases transparency in the process by making information with respect to a petition subject to public disclosure.
“It is clear to me that EPA is abusing its authority by recklessly handing out small refinery waivers and refusing to account for them,” Peterson said. “This is hurting farmers and agriculture communities at the worst time. This bill ends the gamesmanship in the waiver process and increases transparency along the way.”
The bill is supported by Growth Energy, Fuels America, National Corn Growers Assn., Renewable Fuels Assn. (RFA), National Biodiesel Board (NBB), Minnesota Corn Growers Assn. and Minnesota BioFuels Assn.
EPA’s retroactive small refinery exemptions destroyed demand for more than 360 million gal. of biodiesel and renewable diesel over the past 16 months, NBB reported, adding that EPA is right now preparing to grant another flood of retroactive exemptions, which will further undercut use of advanced biofuels for the rest of 2019 and into the future. “The legislation would prevent further economic harm to U.S. biodiesel producers and soybean growers. NBB and its members will continue to ask EPA to restore that lost demand and ensure that annual RFS volumes are met with actual renewable fuel use,” said Kurt Kovarik, NBB vice president of federal affairs.
RFA president and chief executive officer Geoff Cooper said the bipartisan bill would prevent companies like ExxonMobil, Chevron, Holly Frontier and CVR from further gaming the system and undercutting the RFS. “For five years in a row, EPA has failed to enforce the RFS conventional biofuel volume requirements set forth by Congress, even though there has been ample supply available at a low cost to meet the statutory volumes. The consequences of EPA’s chronic mismanagement of the RFS have been economically devastating for ethanol producers, farmers and consumers alike,” he said.
“In recent years, the congressionally required RFS volumes have been undermined by a surge in secretive small refiner exemptions and an abject failure on the part of EPA to reallocate those exempted volumes. This bill would put an end to EPA’s destructive practices by effectively requiring the reallocation of any waived volumes and ensuring the statutory volumes are fully enforced,” Cooper added.
“The EPA has let oil refiners off the hook by circumventing congressional intent, putting ethanol producers at a disadvantage,” Johnson said. “The Renewable Fuel Standard Integrity Act makes sure that moving forward, the EPA’s waiver process will be fair, timely and transparent.”