With Unjustified RFS Exemptions President Trump Breaks RFS Promise to Iowa Voters
August 9, 2019
Contact: Cassidy Walter
JOHNSTON, IOWA – Today the Trump EPA announced its final decision on 38 applications for Renewable Fuel Standard (RFS) refinery exemptions for the 2018 compliance year. Of 38 applications, six were denied and 31 were granted. The fate of the remaining exemption request is unknown.
“The Trump Administration’s approval of 31 refinery exemptions from the Renewable Fuel Standard is just devastating news for our industry,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “With this action, President Trump has destroyed over a billion gallons of biofuel demand and broken his promise to Iowa voters to protect the RFS. The vast majority of these exemptions are not justified under the law. Since this news began to leak this afternoon, RFS credit prices have freefallen to nearly zero, destroying much of the incentive to blend an incremental gallon of ethanol.”
Other than a resolution of the China trade situation, the only hope for a near-term boost for biofuels producers would be for EPA to follow the law and account for the estimated number of refinery exemptions when finalizing the pending 2020 RFS blending level rule. This would allow the EPA to reallocate the exempted gallons and end the demand destruction.
“Adding insult to injury, right now the EPA is estimating zero exemptions for next year,” said Shaw. “Based on the actions of the Trump EPA to date, estimating zero exemptions can best be described as something I stepped in at the Iowa State Fair. EPA Administrator Wheeler should come to the Fair this week, look Iowans in the eye, and say that his honest ‘best estimate’ is zero. He knows better and biofuels producers and farmers deserve better.”
Shaw concluded, “2013 was the last year the RFS was properly and fully implemented, resulting in record farm income. Starting in 2014, RFS waivers and exemptions have destroyed the growth in domestic ethanol demand, resulting in farm income falling by 50 percent and the first actual reduction in U.S. ethanol use in 21 years. Some biofuels plants have ceased production and laid off workers. Coming on top of the loss of the massive China market, U.S. biofuels producers are now facing a one-two gut punch from the Trump Administration.”
For more background on why refinery exemptions are not justified, click here to read Shaw’s comments from IRFA’s April 17th refinery exemption press conference.
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.