Bump in Biodiesel is Beneficial

Contact: Monte Shaw
515-252-6249

JOHNSTON, IOWA – Today the Environmental Protection Agency released a draft rule proposing Renewable Fuel Standard (RFS) levels for conventional, advanced and cellulosic biofuels for 2019 and biodiesel for 2020.

The 2019 conventional biofuels level, most often satisfied with corn ethanol, is proposed at 15 billion gallons, in line with statute. However the draft proposal does not address the demand destruction caused by highly questionable small refinery exemptions that directly undercut the RFS levels.

“This is a status quo proposal for ethanol and the status quo is bad,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “The ethanol number isn’t worth the paper it’s written on so long as Scott Pruitt is granting small refinery exemptions left and right – even beyond what the Department of Energy recommends. With Pruitt in charge of the EPA, the ethanol number in reality is more like 13.5 billion gallons, which is well below what President Trump promised and what it takes to grow demand. Rural America is already suffering from low commodity prices and tariff wars, and today’s proposal is a missed opportunity to provide good news for consumers and farmers.”

The proposal does recommend increasing advanced biofuels by 590 million gallons for 2019. Of this, cellulosic ethanol received a 93 million-gallon boost with the rest allocated to any advanced biofuel.

“It was good to see the EPA recognize that advanced biofuels are growing and can be a bigger part of the RFS,” stated Shaw. “However, there’s not much in real forward progress from where we thought we were last year. The suspect small refinery exemptions also destroy advanced biofuels demand, most often satisfied with biodiesel. So this year’s proposed increase barely offsets the biodiesel demand destruction from last year’s exemptions. Finally, despite proven technologies, the approval of new cellulosic pathways under the RFS is keeping production in check. We have several cellulosic projects at Iowa plants ready to go, but they need the green light from EPA.”

The 2020 proposed level for biodiesel was more positive. After being flatlined by the Pruitt EPA last year, this proposal calls for a 330 million-gallon increase.

“It was refreshing to see the biodiesel level bumped up,” stated Shaw. “Congress created this RFS category and intended to see it grow. It has been slow-walked or stalled for the past several years. With biodiesel as the advanced biofuel of choice, its real demand is impacted more by the total advanced number, but the biodiesel-specific level serves as a useful floor and should boost investor and producer confidence to keep growing the young industry.”

Shaw concluded, “We urge President Trump to direct the EPA to rein in out-of-control small refinery exemptions, to order the reallocation of previous exemptions, to address the 500 million gallons owed to conventional biofuels from the illegal 2016 RFS reduction, and to expedite new advanced biofuel pathway approvals. Rural America needs the RFS to work as intended, and it will if the EPA stops undermining the RFS at every turn.”

More of the EPA proposal can be found at: https://www.epa.gov/renewable-fuel-standard-program/regulations-and-volume-standards-renewable-fuel-standards

 

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing nearly 4.4 billion gallons annually – including approximately 55 million gallons of annual cellulosic ethanol production capacity – and 12 biodiesel facilities with the capacity to produce 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.

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