Biodiesel Proposal Falls Short of Proven Production Capacity

Contact: Cassidy Walter
515-252-6249

JOHNSTON, IOWA – Today the Environmental Protection Agency released a draft rule proposing Renewable Fuel Standard (RFS) blend levels for conventional biofuels for 2020 and biodiesel for 2021.

The 2020 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 unjustified small refinery exemptions (SREs).

“The RFS was intended to send a clear market signal for the growth of biofuels and, unfortunately, this rule falls short,” said Executive Director of the Iowa Renewable Fuels Association Monte Shaw. “Until the EPA reigns in the abuse of SREs and reallocates what has already been lost, billions of gallons of biofuel demand will be destroyed each year as SREs explode around our industry like fireworks above the Washington Monument on the 4^th of July.”

The 2021 proposed level for biomass-based diesel was flatlined at 2.43 billion. In 2018 the U.S. consumed 2.6 billion gallons of biomass-based diesel.

“The RFS is designed to be a market driving mechanism,” Shaw said. “Setting the biodiesel blend level two years hence below what the industry already achieved last year cuts at the core of how the RFS was intended to be implemented. Congress established a separate biodiesel category for a reason, and EPA needs to begin respecting that.”

The draft rule begins the public comment process. IRFA members will be urging EPA to increase the biodiesel level in the final rule, as well as to use their existing authority to reallocate previously waived gallons into the 2020 volume levels. IRFA will continue to stress the need for EPA to follow the letter and spirit of the RFS law when considering SREs.

“As the RFS law outlines, refinery exemptions should be the exception, not the rule,” Shaw concluded. “Under current market conditions, they are simply not justified. Highly profitable refiners do not need or deserve special favors from the EPA. All we ask is that the EPA follow the law and in doing so, the 2018 SRE requests should clearly be denied.”

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 over 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce nearly 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.

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