As candidates vie for the vote of the heartland, climate is an issue presidential and congressional candidates must address. Producers will look to campaign promises and past actions on biofuels as they head to the polls.
*Editor’s Note: ACE does not endorse candidates for elected office. We provide unbiased information about the candidates based on their stance and actions regarding ethanol issues.
The fall sprint to Election Day is underway, with the race between current Democratic Vice President Kamala Harris and former Republican President Donald Trump heating up. While Harris’ nomination following President Biden ending his re-election campaign slightly changes the narrative, the electoral college math remains tight. The race will hinge on key swing states, including Arizona, Florida, Georgia, Michigan, North Carolina, Nevada, Ohio and Pennsylvania.
Biden Administration Actions, Harris Outlook
As a former U.S. Senator and California Attorney General, Harris brings experience from both the legislative and executive branches. While to date Harris hasn’t been vocal about biofuels specifically, it can be inferred her stance on biofuels is generally aligned with broader Democratic Party priorities focused on renewable energy and climate change. The Biden Administration has shown support for the biofuel industry through actions such as increasing biofuel blending requirements under the Renewable Fuel Standard (RFS) and supporting investments toward cleaner fuels, namely the expansion of the Higher Blends Infrastructure Incentive Program (HBIIP) and new, lucrative tax credits under the Inflation Reduction Act (IRA), which President Biden signed into law in 2022, and Harris cast the tiebreaking vote on. The Biden Administration has viewed biofuels as a “bridge” to a low-carbon economy, particularly in hard-to-decarbonize sectors like aviation, announcing The Sustainable Aviation Fuel (SAF) Grand Challenge.
However, when it comes to vehicle transportation, the Biden Administration has been criticized for putting all its eggs in the electric vehicles (EV) basket with the Environmental Protection Agency’s (EPA’s) most recent tailpipe proposal requiring battery electric vehicles (BEVs) to comprise 56% of sales by 2032. The rule mistakenly assumes BEVs operate on zero-emission electricity 100% of the time and ignores the greenhouse (GHG) benefits of biofuels, including no incentives for flexible fuel vehicles (FFVs). Even so, Biden’s EPA has helped improve access to E15 through emergency waivers for the blend over the summer months and approving of a rule to allow E15 year-round in eight Midwest states. During an April 12, 2022, visit to Iowa (to announce a temporary waiver for E15), President Biden said the ethanol industry has “a tremendous future [because we] simply cannot get to net-zero [emissions] by 2050 without biofuels.”
In addition to expanding refueling locations through HBIIP, Biden’s USDA has utilized IRA funding to infuse millions into climate-smart agriculture, including investments in the American Coalition for Ethanol (ACE) Regional Conservation Partnership Program (RCPP) projects. “USDA is working with ACE through the Regional Conservation Partnership Program to invest IRA funds in the field as we create new markets for farmers and biofuel producers, and we are also working together to help make E15 more widely available to save millions of dollars for the American people while ensuring that producers can tap into additional opportunities like Sustainable Aviation Fuels,” said USDA Secretary Tom Vilsack, while speaking at the organization’s 2024 August conference in Omaha. “We appreciate our partnership with ACE to help communities invest in homegrown biofuels through HBIIP, which aims to lower fuel costs for families, generate new revenue streams for American farmers and businesses and bring good-paying jobs to rural communities."
Harris, as vice president, has been aligned with the administration’s actions, which suggest she would continue to support climate-smart ag initiatives and biofuels as part of a larger clean energy strategy. She’s tapped former congressman, current Minnesota Governor Tim Walz as her running mate to garner support in the Midwest and key states like Michigan. Walz’s agriculture resume begins with his upbringing in rural Nebraska and includes advocating for farmers and biofuels. As governor, he co-chaired the Governors’ Biofuels Coalition in 2019, created a Minnesota-based biofuels council, vocally supported the RFS and was one of the eight governors who petitioned EPA to allow E15 access year-round in their respective states. In 2023, he signed a law that set up $1.25 million in grants for farmers to buy equipment geared to healthy soil practices as well.
Trump Administration Actions, Outlook
Meanwhile, the Trump campaign is pushing running mate Sen. JD Vance of Ohio’s appeal in Midwest battleground states. While JD Vance hasn't directly championed biofuels, his focus on energy independence, economic growth and support for rural communities suggests he would likely support biofuel initiatives that align with his goals of promoting American energy production and revitalizing the industrial heartland.
Former President Trump teetered back and forth with balancing support from Midwest farmers and oil interests throughout his term and so far, his campaign rhetoric is indicating the same. Trump’s broader energy policy focused on American energy independence, which included supporting domestic biofuels as part of an “all of the above” energy strategy. While domestically produced ethanol fits into this vision, Trump's stronger focus on the campaign trail has so far remained on promoting the oil and gas industries.
Under the Trump Administration EPA, the Agency signed off on a final rule providing Reid vapor pressure (RVP) relief for E15 on May 31, 2019, after the president committed to making the change in the fall of 2018. Trump touted the announcement at a publicized event in Council Bluffs hosted by ACE member plant Southwest Iowa Renewable Energy (SIRE) in June of 2019, saying “As a result of our action, E15 sales are projected to more than double this year. … American ethanol production also means less dependence on foreign suppliers. By fully embracing E15, we will reduce dependence on foreign oil by up to 250 million additional barrels every single year. … That means our farmers are not only promoting our prosperity; you are protecting our security as a nation.”
Renewable Fuel Standard
While E15 year-round was indeed a victory at the time, a court ruling struck it down, and EPA’s handling of the RFS small refinery exemption (SRE) program overshadowed the E15 “win,” which created a much bigger battle to overcome under the Trump administration. EPA approved 88 waivers to oil companies from their blending obligations under the RFS during President Trump’s term, eroding over 4 billion gallons of ethanol demand.
Following a January 2020 victorious ruling ACE and others won against the waivers in the 10th Circuit Court, small refiners began submitting waiver petitions for RFS compliance years dating back a decade, known as ‘gap-year waivers,’ in an attempt to come into compliance with the precedent set by the court ruling. The Trump EPA announced the Agency was denying these petitions weeks before the 2020 Election Day. Refiners also appealed the 10th Circuit ruling to the Supreme Court, which ended up striking down one of the restraints established in the 10th Circuit in June 2021. The Biden EPA began denying SREs based on the 10th Circuit and Supreme Court rulings, having now denied 105 SREs in total. However, the waiver issue continues to be tied up in the judicial system. On July 26, 2024, the U.S. Court of Appeals for the D.C. Circuit vacated most of EPA’s 2022 denials of petitions for SREs, sending the petitions back to the Agency for further review.
With the election just around the corner, its yet to be determined if this additional review of the SREs and setting new renewable fuel volumes under the RFS, will fall under either the Harris or Trump EPA. Although the statute requires 2026 final RFS volumes by November 1, 2024, EPA is punting beyond the Presidential election.
Inflation Reduction Act
In reference to the IRA, Trump has said he hopes to redirect clean energy funding to infrastructure projects. “We will not allow it to be spent on Green New Scam ideas,” he said in his acceptance speech at the Republican National Convention. Trump’s influence would not be unbound if he defeats Harris in November, but he would have potential avenues to block, rewrite or slow-walk large parts of Biden’s $1.6 trillion in climate, energy and infrastructure initiatives. For example, a central component of the IRA comes from its tax incentives for low-carbon technologies, but Congress left the details of how to implement those tax breaks for the Treasury Department to figure out, and much of that work remains unfinished. That means Trump’s Treasury appointees could rewrite or reinterpret those implementation rules, with no need for Congress’ blessing. While a Trump-led Treasury Department couldn’t fully repeal the credits without the help of Congress, it could revise the pending rulemakings within the confines of the underlying law. Electric vehicle incentives are among those Trump has been vocal about laying on the chopping block. Trump has also promised to undo the Biden EPA’s EV-centric tailpipe rules if he is elected, though a public endorsement from Elon Musk has led Trump to since declare his support for EVs. A Trump presidency would likely extend the use of liquid fuels, which by extension, would continue ethanol demand in the vehicle transportation sector.
Trade
Trade issues were part of the balancing act with the Trump Administration. While retaliatory tariffs imposed on China and other nations took away some export markets for ethanol, the Trump Administration spent billions of dollars that USDA paid out to farmers through Market Facilitation Payments intended to compensate for lost export sales. The former President also touted the enactment of the U.S., Mexico, and Canada Free Trade Agreement (USMCA) to replace NAFTA. The USMCA preserved the ethanol trade relationships previously established under NAFTA, ensuring continued market access for U.S. ethanol producers. On the campaign trail, Trump has floated imposing tariffs – a 10% minimum – on all imported goods, including higher duties on China, which has brought backlash that the tariffs could raise prices at the pump.
Under the Biden Administration, efforts have been made to maintain and expand global markets for U.S. biofuels and according to USDA’s quarterly trade outlook published Aug. 27, U.S. ethanol exports for fiscal year 2025 are predicted to reach a record 2 billion gallons. However, stringent regulatory standards, blending mandates and infrastructure limitations among others remain roadblocks for ethanol exports. A sore spot for biofuels interests remains the stiff tariff Brazil imposes on U.S. ethanol imports along with a steep increase in imports of Brazilian tallow and questionable used cooking oil (UCO) volumes from China.
Now that both candidates are on the campaign trail, look for both Harris-Walz and Trump-Vance tickets to highlight their ethanol support leading up to the election.
2024 Congressional Races
As the 2024 election holds America’s attention, here’s a rundown of key biofuel priorities facing Congress and a breakdown of the dynamics at play.
A total of 469 seats in the U.S. Congress (34 Senate seats and all 435 House seats) are up for election on November 5, 2024, including one special election for the U.S. Senate in Nebraska. The 2022 midterm election resulted in a divided Congress, with Republicans controlling the U.S. House and Democrats retaining control of the U.S. Senate. Democrats maintained control of the Senate with a net gain of one seat, bringing their total up to 51, including independents who caucus with them, and Republicans held 49 seats following the election. In the U.S. House, the Republican Party gained control, flipping several seats from Democratic incumbents, which shifted Democrats’ control of the House that they had held since 2018. The final tally was 222 seats for Republicans and 213 for Democrats.
In the Senate, there are 23 Democratic seats and 11 Republican seats up for election in 2024. In the 2018 midterm elections, Democrats and independents who caucus with them won several Senate seats, resulting in their having to defend a larger share of Senate seats in 2024. This, coupled with many of the Democratic seats up for re-election in states that are competitive or lean Republican, puts them at greater risk of losing control of the Senate.
As of August 2024, 53 members of Congress — eight members of the U.S. Senate and 45 members of the U.S. House — announced they would not seek re-election in 2024. November’s election, like previous election years, could be pivotal for the ethanol industry and key votes will determine the future of who’s fighting for biofuel issues on the Hill.
Congressional Biofuel Priorities
Three important issue areas the American Coalition for Ethanol (ACE) has prioritized with Congress and will continue to press with the 119th Congress are outlined below.
- E15 Year-Round – After missing the statutory decision deadline by more than a year and a half, the Environmental Protection Agency (EPA) finally announced a rule in February allowing E15 year-round in eight Midwest states but postponed the effective date to April 28, 2025. While access in eight states is a step in the right direction, ultimately Congress needs to enact legislation ensuring permanent, nationwide E15 year-round, which has been ACE’s highest priority for Congress. We’ve been pushing for enactment of legislation to allow E15 year-round, nationwide (S. 2707, the Nationwide Consumer and Fuel Retailer Choice Act; H.R. 1608, the Consumer and Fuel Retailer Choice Act), and if not enacted in this legislative session, ACE will work with lawmakers for its reintroduction next session.
- New Carbon Markets and Tax Credits – America’s farmers and biofuel producers have the potential to profit from sensible and science-based clean fuel or low carbon policies that reward them for the contributions they make to reducing greenhouse gas emissions. The Inflation Reduction Act (IRA) transformed the clean energy conversation across many industries, through its offering of significant tax credits and benefits. The U.S. Department of Agriculture (USDA) approved a 10-state Regional Conservation Partnership Program (RCPP) led by ACE to access new markets and tax incentives based on climate-smart agricultural practices which can maximize ethanol’s ability to significantly decarbonize the transportation and aviation sectors. ACE has encouraged the U.S. Treasury Department to apply the GREET model to ensure ethanol qualifies for the 40B sustainable aviation fuel (SAF) and 45Z clean fuel production tax credits. Treasury must include climate-smart agriculture practices, as illustrated by ACE’s RCPP, in the GREET model for 40B and 45Z. While certain farming practices are explicitly recognized in the released 40B GREET model guidance, the bundled approach with a limited 10-point GHG credit for the bundled practices is unworkable. Significant improvement is needed for 45Z. Legislation ACE has encouraged Congress to support: SAF Accuracy Act (S. 1958, H.R. 4862), Adopt GREET Act (S. 3055, H.R. 6152) and Farm to Fly Act (S. 3637, H.R. 6271).
- Removing Barriers to Higher Blends – EPA is pushing an unrealistic requirement for battery electric vehicles (BEVs) to represent nearly 60% of all sales by 2032. Rather than EPA arbitrarily picking winners and losers, ACE has been urging Congress to support market-based legislation enabling technologies to compete on a level playing field, including the Next Generation Fuels Act (S. 944, H.R. 2434), and the Flex Fuel Fairness Act (S. 2635, H.R. 6508).
