Ethanol mandate battle renewed

Source: By Washington Examiner • Posted: Thursday, January 12, 2023

BATTLE RENEWED OVER RFS: The ethanol lobby, merchant refiners, and their allies are back at battle this week over the future of the Renewable Fuel Standard, which is being born anew beginning this year now that Congress’s biofuel blending schedule has expired.

The Environmental Protection Agency held the first of two public hearings yesterday to hear from stakeholders on its 2023-2025 proposed biofuel blending requirements, where corn interests faced off against merchant refinery interests on everything from EPA’s proposed blending requirements to what kind of model it uses when calculating lifecycle greenhouse gas emissions.

What’s on the table: EPA’s proposed rulemaking, issued in December, would raise biofuel blending volumes to new heights beginning this year. It marks a new era for the standard as previous renewable volume obligations were based on statutory targets set by Congress, which ended with compliance year 2022.

Those on both “sides” of the RFS are making the case (as they always have) that the standard is existential for them.

What they’re saying: Merchant refiners want EPA to soften the standard and finalize lower volumes, with several pointing to estimates from the Energy Information Administration showing ethanol demand being lower than EPA’s blending requirement.

These refiners have also been complaining about the astronomical cost of renewable identification numbers, the mechanism used to comply with the RFS, which peaked above $2 per gallon in 2021. For reference, RINs ran below 50 cents per gallon for most of the three years prior.

“Prices for RINs fluctuate wildly and for many years have exceeded the combined costs for refineries for payroll, healthcare, utilities and maintenance costs combined,” Jim Savage, a legislative representative for United Steelworkers, said during yesterday’s hearing. “This is unsustainable.”

Lawmakers in both parties have sought to alleviate the high price of RINs to help merchant refiners.

Biofuel interests contrarily want EPA to finalize blending as proposed, and some groups have made the case for years for stronger blending requirements after the agency finalized lower volumes than were provided by Congress.

The administration expected to finalize its RFS rulemaking in June.