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Farm Belt Howls as EPA Proposes No-Growth Biofuel Mandate for 2020
The Trump administration proposed a Renewable Fuel Standard of 20.04 billion gallons for 2020, meaning no change in corn ethanol’s share of the gasoline market for cars and light trucks, while the share of that market going to cleaner-burning cellulosic ethanol, made from grass and woody plants, will increase by 120 million gallons. Farm groups and biofuel makers, who opened the summer with a celebration that higher-blend E15 was approved for year-round sale, said the EPA bowed to Big Oil.
“I urge President Trump to compel EPA to reverse course and keep his word to the forgotten Americans who faithfully stood with him,” said Senate Finance Chairman Charles Grassley of Iowa, the No. 1 corn and ethanol state. The Renewable Fuels Association, a biofuels trade group, said the EPA has undercut the impact of the biofuels mandate by exempting dozens of small-volume refineries from having to meet targets for mixing renewable fuels into gasoline. “This announcement indicates that EPA has no intention of righting this particular wrong in a timely manner,” said the National Farmers Union.
In a statement at the start of the 4th of July weekend, the EPA proposed a 120-million-gallon increase — less than 1% — in the biofuel mandate for 2020 from this year’s 19.92 billion gallons. The corn ethanol mandate would remain at 15 billion gallons. Cellulosic ethanol use would rise to 540 million gallons from this year’s 420 million gallons, based on EPA’s estimates of likely growth in production. The biomass-based diesel mandate already is set at 2.43 billion gallons for 2020, up from 2.1 billion gallons for this year, and would remain at 2.43 billion gallons in 2021 under the agency’s proposal.
“Today, nearly all gasoline used for transportation purposes contains 10% ethanol (E10) and, on average, diesel fuel contains nearly 5% biodiesel and/or renewable diesel,” said the EPA in its proposed rule. The EPA said it would hold a public hearing on the proposal, with the comment period closing 30 days after the hearing.
EPA Administrator Andrew Wheeler said the agency intended to complete work on the biofuel mandate well before 2020 and “provide greater regulatory certainty to farmers and refiners across the country.”
The EPA, under court order to reconsider its biofuel mandate for 2016, said it would be difficult to increase retroactively the mandate by 500 million gallons, so “we are proposing to retain the original 2016 required volumes.”
“There is no reason for the EPA to not account for those gallons. It appears the EPA continues to favor Big Oil and not uphold the RFS (Renewable Fuel Standard),” said Lynn Chrisp, president of the National Corn Growers Association. The biofuels industry also has railed against EPA granting of “hardship” waivers for small refineries. It sees E15, a 15% blend of ethanol into gasoline, as an avenue for larger biofuel sales. The traditional ethanol blend is 10%.
“If EPA doesn’t fully account for lost gallons, we’ll continue to see investments in advanced biofuels frozen by uncertainty, shrinking farm markets, and more rural plants idling production,” said Brooke Coleman of the Advanced Biofuels Business Council.
The RFS was created under a 2007 law that envisioned biofuel use of 36 billion gallons annually from 2022, with the bulk of it, 21 billion gallons, as second-generation renewable fuels. Those advanced biofuels have been slow to reach the market, so the EPA has sharply curtailed the RFS for those second-generation fuels to reflect actual production. This year’s 420 million gallons is a fraction of the 15 billion gallons, including biodiesel, of advanced biofuels that was expected when Congress enacted the energy law.
For years, the oil industry has pressed for congressional action to lessen the requirement to blend biofuels into gasoline. “Congress must repeal or significantly reform the RFS to protect American consumers,” says the American Petroleum Institute, a trade group. It says the fuel supply is saturated at the 10% ethanol blend, and there is no room for more biofuels.
To read the EPA’s proposed rule, click here.