ACE reaction to EPA’s supplemental proposal to 2020 RVO
Posted on 10/15/2019
Sioux Falls, SD (October 15, 2019) – The U.S. Environmental Protection Agency (EPA) today issued a supplemental rulemaking to its proposed 2020 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS), following an Oct. 4 White House announcement that the EPA will seek comment on ‘actions to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation’s gasoline fuel supply beginning in 2020.’
American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following reaction to EPA’s proposal:
“Two weeks ago, ACE resisted the temptation to sing the praises of the White House ‘deal’ because it was short on details and dependent on a new EPA rulemaking. Today, EPA revealed how it intends to set the 2020 RVO. Simply put, the proposal fails to live up to the hype. The White House’s Oct. 4 announcement acknowledged Small Refinery Exemptions (SREs) would continue in the future but promised EPA would ensure that 15 billion gallons of ethanol be blended in 2020. Further, in an Oct. 3 phone call, Trump Administration officials told us the approach they would take to ensure at least 15 billion gallons for 2020 would be to prospectively account for the three-year rolling average of actual SRE volume from 2016-2018. In other words, EPA would apply the three-year rolling average of SREs for the 2016-2018 compliance years, approximately 1.34 billion gallons, and prospectively reallocate the volume to the 2020 RVO.
“Instead, EPA is proposing to ‘consider the exempt volumes of gasoline (and diesel) in previous years had EPA followed the Department of Energy (DoE) recommendations without deviation’ in determining the 2020 RVO. If this is confusing, I would suggest that’s EPA’s goal. The Agency hopes farmers and biofuel producers will overlook the fact EPA is not planning to ensure 15 billion gallons for the 2020 RVO. Instead of using the approach suggested in the Oct. 3 phone call, EPA is planning to begin issuing ‘partial’ SREs for 2020, something DoE has recommended in the past only to be rejected by EPA. Next, EPA is going to ignore the fact it granted 85 full SREs for the 2016-2018 compliance years, representing 4 billion gallons it never intends to reallocate, and instead assume it had followed DoE’s advice to issue partial SREs during that time frame. Then, it is going to calculate the average of those imaginary partial SREs and apply that volume, approximately 770 million gallons, to the 2020 RVO.
“The ongoing insanity over EPA’s mismanagement of the RFS would be bizarrely humorous if not for the sobering fact that it, along with the trade war and weather-related disasters, has taken a terrible economic toll on the livelihoods of corn growers and biofuel producers across rural America.
“We urge farmers, biofuel producers, elected leaders and other industry stakeholders to participate in the comment period following this proposal to get EPA to finally follow the rule of law with the RFS.”