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Biofuel and ag groups urge Pruitt to deny RFS point of obligation requests

Sioux Falls, SD (February 24, 2017) – Leading organizations of the U.S. biofuel and agricultural industries wrote EPA Administrator Scott Pruitt today to highlight that they strongly oppose any change to the Renewable Fuel Standard (RFS) point of obligation.  Signing the letter were the Advanced Biofuels Business Council, American Coalition for Ethanol, Growth Energy, and the National Farmers Union.

“The point of obligation is one of the most important remaining tools to help drive higher blends remaining in the RFS.  It creates economic incentives for gasoline retailers to offer higher blends such as E15 by providing an economic incentive for increased biofuels blending.  Shifting the point of obligation as urged by its proponents would eliminate this incentive.  In addition, the proposed effort to shift the obligation would increase by almost 800 percent the number of entities required to comply with the RFS, creating a new and less efficient market,” said the groups in the letter.

“As growth in the ethanol sector has slowed, corn surpluses are putting pressure on prices and rural economies.  According to USDA, net farm income has dropped from $123.7 billion in 2013 to $66.9 billion in 2016 — a decrease of 46 percent.  Changing the point of obligation would not only hamper industry efforts to build out E15, it would further harm rural economies in key states that supported President Trump because of his promises to create jobs and strengthen the U.S. economy,” according to the groups.

The groups also urged Pruitt to take swift action to provide regulatory relief by lifting the Reid vapor pressure (RVP) restriction on E15.  “The Obama administration’s failure to address the burdensome RVP restriction on E15 has stalled the use and growth of ethanol in the U.S.  We encourage you to act swiftly to provide regulatory relief to fuel marketers and retailers so low-cost, environmentally-friendly E15 can be offered for sale to consumers year round.”

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