IRFA: EPA’s Proposal Fails to Remove SRE Cancer

Contact: Cassidy Walter

JOHNSTON, IOWA – Today at the EPA hearing on the proposed 2020 Renewable Fuel Standard (RFS) supplemental rule, Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw emphasized that EPA’s proposal fails to address the cancerous market uncertainty created by rampant abuse of RFS exemptions.

“The market uncertainty generated by EPA’s SRE shenanigans is a cancer at the heart of the RFS,” Shaw said. “The proposal before us today does not remove that cancer and its victims are the farmers who grow our crops and built our biofuels industry.”

Prior to supporting President Trump’s October 4th RFS deal, aimed at accounting for the demand destruction caused by RFS exemptions granted to refineries, biofuels industry leaders were briefed by the White House and EPA that EPA would account for small refinery exemptions (SREs) using a three-year rolling average of actual refinery exemptions granted. Eleven days later, EPA announced a proposal to use a three-year rolling average of U.S. Department of Energy (DOE) recommendations for SREs, which EPA has routinely ignored and is under no legal obligation to follow.

At today’s hearing, Shaw challenged the lack of certainty EPA’s proposal creates, especially as it pertains to the granting of SREs for the 2019 compliance year, which is not addressed in this rule. Shaw said EPA’s proposal incents DOE to “aim low” and recommend a small number of SREs for 2019 and EPA to “shoot high” by granting a large number of SREs, ensuring a small number goes into the three-year rolling average for estimating future SREs while a huge number of RINs goes into the carryover RIN piggybank for refiners to use in the future in lieu of actual biofuel gallons.

“EPA is asking farmers to trust that they will follow DOE recommendations in 2020,” Shaw said. “But this proposal gives EPA the opportunity in 2019 to destroy additional demand and to dig an SRE hole so deep that 15 billion gallons will never be 15 billion gallons in the future. EPA should immediately declare their intended approach to 2019 SREs.”

Shaw continued, “Furthermore, the SRE process remains locked in a black box as DOE recommendations are secret. Today I call on the EPA to add DOE recommendations to the SRE dashboard on the EPA website.”

Shaw concluded by calling on EPA to stick to the deal announced on October 4th.

“There is still time for EPA to remove the SRE cancer. It is time for EPA to make it right and stick to President Trump’s deal,” Shaw said.

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: