Ethanol industry blasts EPA’s 2020 blending targets

Source: By Marc Heller, E&E News reporter • Posted: Tuesday, July 9, 2019

Biofuel splashing. Photo credit: U.S. EPA

The ethanol industry is disappointed by EPA’s biofuel targets for 2020. U.S. EPA

Ethanol advocates dismissed EPA’s latest proposal for biofuel volumes in 2020, saying the agency’s history of waiving the requirements for some refiners could continue to undermine renewable fuels.

EPA on Friday proposed to maintain at 15 billion gallons the amount of conventional biofuels to be blended into the nation’s fuel, and a slight increase in advanced biofuels. The proposed rule will be open for public comments for 30 days and would be made final later this year, if EPA sticks to the congressionally mandated timeline.

Growth Energy, the ethanol industry group, called the proposal “a drop in the bucket compared to the demand lost due to a flood of refinery exemptions.”

In a statement, Growth Energy CEO Emily Skor said, “Unless EPA restores demand destroyed through secret handouts to oil giants like Exxon and Chevron, these targets offer nothing but another year of lost opportunity and rural hardship.”

To the refining industry, however, the proposal was welcome news for steering clear of controversies related to small-refiner exemptions, granted in cases of economic hardship. Ethanol supporters had called on EPA to reallocate volumes of biofuel waived from some refineries, to others, and to retroactively boost volumes — called the renewable volume obligations — for 2016 based on a federal court ruling.

“Today’s announcement stays away from the retroactive rulemaking favored by some biofuel lobbyists,” said Scott Segal, a longtime representative of the refining industry. “That means no reopening of the 2016 RVO and no reallocations based on smaller-refiner exceptions. Had EPA gone in any other direction, it could have created profound due process and statutory problems harmful both to the regulated community and the integrity of the RFS itself.”

In its proposal, EPA said it wasn’t making any adjustments related to refinery exceptions, since none have been granted so far this year. And the agency said it would maintain the volumes from 2016 because of the market’s inability to produce much more biofuel than the proposed rule calls for.

More than 30 petitions for refinery exemptions are pending at EPA, and Segal said refiners “look forward to prompt action.”

The proposal calls for 2.43 billion gallons of biomass-based diesel for 2021 — a volume that’s set two years ahead — holding that level steady compared with next year. Cellulosic biofuels would be set at 0.54 billion gallons. Advanced biofuels would increase by 0.12 billion gallons, to 5.04 billion gallons.

Despite that increase, the Advanced Biofuels Business Council saw shortcomings in the proposal, based on EPA’s decision not to reallocate gallons waived from some refineries.

“If the EPA doesn’t fully account for lost gallons, we’ll continue to see investments in advanced biofuels frozen by uncertainty, shrinking farm markets, and more rural plants idling production,” said Brooke Coleman, the ABBC’s executive director.

That issue may play out in Congress, where Sens. Joni Ernst (R-Iowa) and Deb Fisher (R-Neb.) have proposed legislation (S. 1840) to force EPA to reassign the exempted biofuel volumes.

Other lawmakers, however, are pressing legislation to limit ethanol mandates. Sen. John Barrasso (R-Wyo.) and other critics of ethanol mandates have urged EPA to maintain its approach to refinery exemptions.

In the proposal, EPA also outlined a handful of possible regulatory changes, including finalizing a proposal to allow biomass-based diesel to be produced from food waste.

A broader reset of biofuel volumes, required because of waivers granted in recent years, will be addressed through a separate rulemaking, EPA said.