Biofuel backlash

Source: BY MATTHEW CHOI, Politico • Posted: Wednesday, January 5, 2022

EPA drew some pointed criticism from industry groups on all sides of the biofuels debate during its public hearing Tuesday over its proposed biofuel blending volumes for 2020, 2021 and 2022. Representatives who spoke virtually underscored the mixed bag offered by the potential rule, raising alarms over supply chain concerns, further delays under the program and the potential precedent set for the future of the Renewable Fuel Standard.

“When it comes to setting annual blending obligations under the RFS, it seems like EPA’s strategy in previous rulemakings has been to make sure neither biofuel producers nor oil refiners are completely satisfied, leading the agency to mistakenly believe it got the volumes just right,” said Brian Jennings, CEO of the American Coalition for Ethanol.

In particular, the agency’s proposal to retroactively lower the 2020 volumes “would set a dangerous precedent and would be inconsistent with the EPA’s long-held position,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. Michael Burnside, a policy analyst at American Fuel and Petrochemical Manufacturers, meanwhile said the plan to raise the volumes for 2022 did not reflect market demand, infrastructure constraints or production. “It is unreasonable to propose 15 billion gallons for conventional biofuel in 2022 as if the pandemic never happened,” he said in his testimony.

While EPA officials didn’t tip their hands, the hearing also offered an opportunity for groups to press the agency on how it should approach the future of the program as it sets volumes for 2023 and beyond. “My hope is that this is a reliable signal in continued growth in 2023 and beyond,” said Dave Walton of the National Biodiesel Board of the biodiesel volumes. Brooke Coleman, executive director of the Advanced Biofuels Business Council, added that previous RFS enforcement has created a “believability problem” throughout the supply chain. “It’s all retroactive compliance alleviation that undercuts innovation investment,” he said.