Governors' Biofuels Coalition

The leaders of nearly two dozen advanced and cellulosic biofuel companies are protesting U.S. EPA’s proposal to stray from the statutory targets of the renewable fuel standard, which they say will stymie investment in the very advanced fuels the policy was intended to boost.

In a letter sent to President Obama today, 23 industry leaders complained that EPA’s plan to change its waiver methodology undercuts the market signals the RFS was intended to send to investors.

“The point of the RFS was to reward those who made the investments necessary to use more renewable fuel,” the executives wrote. “Parts of the oil industry refused to do so starting in 2013, and now they’re being rewarded. No market-based system can survive if regulators are willing to overhaul the system to reward intransigence among obligated parties.”

Poet-DSM Advanced Biofuels President Dan Cummings told reporters on a conference call today the proposal has already “chilled the outlook for us.”

In the letter, the companies say the industry “has fought and won this battle” before, when Sen. James Inhofe (R-Okla.) tried to add language enshrining “distribution waivers” into the law that created the RFS.

“Congress considered this path, but the language was struck from the bill in conference because Congressional champions for our industry knew that providing such waivers would result in the oil companies continuing to use their market position to stop the growth of biofuels,” the letter states.

In a nod to Obama’s climate legacy, the companies also said the proposed change, if finalized, would send global signals “that your administration is backing away from its support of the most transformative U.S. energy and climate policy on the books today; and one that is widely regarded to be the best cellulosic and advanced biofuels policy in the world.”

Should that occur, the firms say, “we will continue to be forced to look overseas where renewable fuel policies are more stable.”

The letter comes on the heels of EPA Administrator Gina McCarthy’s speech yesterday to the ethanol industry in which she called the RFS a “vital” component in fighting climate change (E&ENews PM, Sept. 15).

However, she cautioned that the administration is hamstrung by the threat of legal challenges.

“The last thing I want to do is give you what you want and then we fall flat when we go to the courts,” McCarthy said.

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