EPA Seeks Comment on E15, RFS Waivers

Source: By  Todd Neeley, DTN Staff Reporter • Posted: Monday, January 18, 2021

EPA Asks for Public Comment on RFS General Waiver Requests

EPA issued two new proposals related to the Renewable Fuel Standard on Friday, including one asking for comments on a general waiver to petroleum refiners for 2019 and 2020. (DTN file photo by Greg Horstmeier)
EPA issued two new proposals related to the Renewable Fuel Standard on Friday, including one asking for comments on a general waiver to petroleum refiners for 2019 and 2020. (DTN file photo by Greg Horstmeier)

OMAHA (DTN) — EPA wants the public to comment on whether the agency should consider a general waiver of Renewable Fuel Standard blend requirements for oil refiners.

The agency on Friday released a set of proposals to consider a number of petitions by states to waive Renewable Fuel Standard requirements for small refiners and to make changes to E15 pump labels.

Both the request for comments on a general waiver and changes to E15 labels will be posted for comment in the Federal Register on Jan. 19.

Citing the economic shutdown due to COVID-19, EPA received requests for general waivers from a few small refiners and a number of states for 2019 and 2020. The governors of Texas, Utah, Oklahoma, Wyoming, Louisiana and Pennsylvania were among those who requested RFS general waivers, along with a handful of refining companies. In those requests, all parties claimed the waivers were needed because small refiners faced economic challenges.

The agency said in the proposal it is not proposing granting the waivers, but rather wants public comment on those petitions.

On the second proposed rule, the EPA is seeking comment on whether to remove E15 pump labels altogether or to amend current labels. Ethanol industry officials have expressed concern the current labels offer warnings to consumers that discourage use of the E15. On the other hand, groups also have suggested the expansion of E15 at fuel stations adds to the risk of using the wrong fuel and labels should be more explicit.

EPA proposes a number of changes to the label, including removing the “attention stripe” on the label, removing “E15” from the label while including “contains up to 15% ethanol” on the label. Also, the agency would change other language on the label to promote E15’s safety.

In addition, the EPA is proposing changes to allow proper underground storage of E15 and for future allowances for higher ethanol blends.

Growth Energy CEO Emily Skor said the agency proposals are a mixed bag for ethanol producers.

“With 95% of vehicles approved for E15 and over 18 billion miles driven on the fuel, the best outcome for this rulemaking is to remove the label entirely,” she said in a statement.

“Despite this potential progress on E15, important work remains to defeat the offensive attempt by refiners to avoid their biofuel blending obligations through general waivers. Given President-elect (Joe) Biden’s commitments on the campaign trail, we’re confident his incoming team will uphold the integrity of the RFS and reject these oil-backed waiver requests before rural recovery is derailed.”

Geoff Cooper, president and CEO of the Renewable Fuels Association, said the requests for general waivers will miss the mark.

“This is nothing more than one last desperate attempt by the refiners to undermine the RFS and protect their chokehold on the nation’s fuel markets,” he said in a statement.

“But it cannot succeed because EPA has no authority to waive RFS volumes unless the petitioners show that the RFS itself is the cause of the ‘severe economic harm’ to a state, region, or the nation. Such a showing would be impossible, especially because the renewable fuel blending requirements have already adjusted lower in tandem with COVID-related changes in gasoline and diesel consumption. In reality, the general waiver requests submitted to EPA come nowhere close to satisfying the well-defined statutory criteria and requirements established for requesting a waiver.”

It has been a week of turmoil for the ethanol industry.

Members of Congress and the biofuels industry were scrambling as a result of news that EPA Administrator Andrew Wheeler was potentially reversing course and approving more small-refinery exemptions in the last days of the Trump administration.

EPA reportedly was considering 32 requests by petroleum refiners to exempt them from 2019 RFS blend obligations.

A statement in a new EPA proposed rule sent a signal Thursday that EPA may not act on any new small-refinery exemptions. EPA stated, “Due to the ongoing litigation, we take no position on the availability of SREs for the 2019 compliance year.”

Ethanol industry officials said the rule was a good sign EPA was not going to grant more exemptions.

Still, EPA also proposed a rule that would grant oil refiners more flexibility and an extension to comply with the RFS for 2019 and 2020. Under the proposal, refineries producing less than 75,000 barrels of oil per day would have until Nov. 30, 2021, to meet 2019 RFS blend requirements, and until Jan. 31, 2022, to meet the 2020 RFS obligations. EPA cited the economic struggles of refineries due to COVID-19 as the reason for the extensions.

These moves come as ethanol production is down about 14% from the same week a year ago and corn used for ethanol is down 11% over the same period.

Read the E15 proposal here: https://public-inspection.federalregister.gov/….

Read the waivers request proposal here: https://public-inspection.federalregister.gov/….

Todd Neeley can be reached at todd.neeley@dtn.com