2016 Preview: Srcs. Expect RFS Fight, Higher Ethanol Blend Growth to Continue

Source: By Rachel Gantz, OPIS • Posted: Monday, January 4, 2016

U.S. biofuel industry stakeholders are expecting that 2016 will look a lot like 2015 in Congress as lawmakers tackle the Renewable Fuel Standard (RFS2) and other programs designed to expand biofuel production and usage.

The EPA in late November finalized its 2014-2016 RFS targets, aiming to get the agency “back on track” toward issuing the rules in a timely manner (they are statutorily due by Nov. 30 of the preceding year). At least two stakeholders already plan to sue EPA over the final RFS rules, and market sources expect to see a battle in Congress.

“The RFS is a flawed and horribly mismanaged program that attempts to force more ethanol into our fuel supply than is safe for most vehicles on the road today,”
said American Petroleum Institute (API) spokesman Carlton Carroll. “In order to protect consumers, Congress must step in to repeal or significantly reform the RFS. Members on both sides of the aisle agree this program is a failure, and we are stepping up our call for Congress to act. This will be a major priority for API in the New Year,” he added.

For their part, biofuel stakeholders expect to again defend the RFS in Congress and are confident they can beat back attempts to reform or repeal the program.

Ethanol trade group Growth Energy plans to push for greater ethanol use in 2016, Co-Chairman Tom Buis said. “Programs such as the Biofuels Infrastructure Partnership, increased foreign market development and the increase in the availability of E15 will be some of the most notable areas of growth,” he said.
“I am confident that the industry will continue to grow and succeed. The recent [RFS] rule issued by EPA broke the ‘so-called’ blend wall, and raised the overall numbers from the initial proposal. That provides more certainty to producers, which I believe will help increase the availability and use of higher blends of renewable fuel,” he added.

Similar efforts will be undertaken by the American Coalition for Ethanol (ACE).
The group’s “primary objective for 2016 is to develop retail markets for E15,
E25 and E85 with ‘boots on the ground,’ answering questions, addressing concerns and helping marketers ‘do the math’ on how they can make money selling ethanol blends,” said ACE Executive Vice President Brian Jennings. “We’ll continue our Flex Fuel Forward paid ad campaign in the top fuel and c-store publications and reach retailers who have potential to sell E15 and flex fuels. ACE is also helping lead efforts to create demand for clean octane, high-efficiency fuel for future engine technologies. On the policy front, addressing Reid Vapor Pressure limits and keeping the RFS on track remain top priorities,” he added.