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ACE urges EPA to reallocate volumes from RFS waivers harming rural America in comments on 2020 RFS proposal

Sioux Falls, SD (August 30, 2019) – The American Coalition for Ethanol (ACE) submitted comments today to the Environmental Protection Agency (EPA) on the proposed Renewable Volume Obligations (RVOs) for 2020 under the Renewable Fuel Standard (RFS). Today is the final day the Agency is accepting public comments on the proposal.

ACE commented on several facets of the proposed rule including: the difference between EPA’s proposed 2020 RVO and the real-world effect Small Refinery Exemptions (SREs) have on RFS blending obligations; the need for EPA to reallocate the gallons waived through SREs, in addition to restoring the 500 million gallons in compliance with the Americans for Clean Energy et al v. EPA lawsuit; how EPA’s abuse of the SRE provision harms rural America and violates statutory authority; the need for EPA to adopt the latest GREET model with respect to the proposed rule to “reset” the 2021 and 2022 RFS volumes to ensure EPA makes determinations on scientifically defensible GHG assessments; and our concerns about the Agency’s regulatory approach to the retail sale of E15 through blender pumps.  

Several corn farmers and biofuel producers were cited in ACE’s comments, including ACE member plant Southwest Iowa Renewable Energy CEO Mike Jerke, who recently said EPA’s abuse of small refinery waivers “guts the RFS and breaks the president’s promise.” He goes on to explain that the August 9 announcement of 31 SREs for the 2018 compliance year, the USDA’s August 12 crop report and the trade war with China have combined to potentially take $10.6 billion away from farmers and ethanol plants and transferred much of that to oil companies.

ACE’s comments highlight the radical changes made to EPA’s handling of SREs under the Trump administration. “During RFS compliance years 2016 through 2018, the average number of SRE applications skyrocketed to more than 30 per year and the average approval rate increased to 90 percent. What’s more, the Trump administration waited until after the compliance year had closed to approve “retroactive” refinery exemptions. By tilting the scale and the calendar in favor of refineries, the Trump administration has never reallocated the waived blending obligations as required by the statute. Not only has EPA allowed 85 SREs for the 2016 through 2018 RFS compliance years, it has not reallocated the 4.04 billion gallons of statutory volume exempted over that timeframe. If one were to assume, for example purposes, all this waived volume constitutes ethanol from corn, this is equivalent to losing a 1.4-billion-bushel crop, or the entire market for Minnesota corn farmers in 2018.”

“The best way to spur market-based demand for farmers and improve conditions in rural America is to increase the production and use of renewable fuels. This is even more critical given the uncertainty created by trade wars and efforts to renegotiate existing trade pacts. EPA’s rule allowing U.S. retailers the ability to offer E15 to their customers all year opens the door for greater market access long-term, but the net effect of E15 year-round is still in the hole when it comes to ethanol demand through the RFS without restoring the waived gallons for small refineries.”

ACE’s full comments are available here.

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