The EPA released a proposal last Friday that would increase the required production of biofuels by only 0.6%, from 19.9 billion gallons in 2019 to 20 billion gallons in 2020. This includes 15 billion gallons of ethanol, as well as 5 billion gallons of advanced biofuels, including cellulosic ethanol and biomass-based diesel.
Additionally, the EPA set the Renewable Volume Obligations (RVO) for biomass-based diesel for 2021 in addition to 2020’s RVO, both of which are 2.4 billion gallons; this includes biodiesel made from soybeans and renewable diesel. The agency cited biodiesel tariffs from Argentina and Indonesia, as well as the fact that the $1-a-gallon tax credit for biodiesel has lapsed as reasons for not increasing its RVO. The EPA said this will make room in the biofuel market for others advanced biofuels, including imported sugarcane ethanol.
Ethanol producers voiced concerns about the EPA’s ruling and its lack of increased ethanol-blending requirements. Emily Skor, CEO of Growth Energy, said, “It’s unconscionable that [the] EPA continues to undermine the president’s commitment to a strong rural America. The 2020 RVOs are a drop in the bucket compared to the demand lost due to a flood of refinery exemptions. Unless EPA restores demand destroyed through secret handouts to oil giants like Exxon and Chevron, these targets offer nothing but another year of lost opportunity and rural hardship."
Scott Segal, a lobbyist for refiners, praised EPA for avoiding “the retroactive rule-making favored by some biofuel lobbyists. That means no reopening of the 2016 RVO and no reallocations based on smaller-refinery exceptions. Had EPA gone in any other direction, it could have created profound due process and statutory problems harmful both to the regulated community and the integrity of the RFS itself."
The National Corn Growers Assn. (NCGA) also released a statement regarding the EPA biofuel ruling, saying, “We are frustrated that the EPA did not account for potential waived gallons going forward in the proposed rule,” said National Corn Growers Assn. president and Nebraska farmer Lynn Chrisp. “If the EPA continues to grant retroactive waivers, the RVO numbers are meaningless and the EPA is not following the law. Farmers are facing a very tough economic environment and the continued waiver abuse chips away at farmers’ bottom line.”