Ethanol industry wants face-to-face meeting with Trump

Source: By Marc Heller, E&E News reporter • Posted: Friday, August 23, 2019

Biodiesel groups want a meeting with President Trump in the wake of EPA moves they say undermine their industry.

The National Biodiesel Board and the American Soybean Association wrote to Trump yesterday saying EPA’s granting of biofuel blending exemptions to many small petroleum refineries is taking business away from biodiesel producers.

“The administration’s recent action on RFS waivers is having an immediate and devastating impact on biodiesel producers, the same biodiesel producers that farmers rely on to purchase surplus soybean oil, the majority feedstock used in biodiesel production,” the groups wrote.

At issue is the lost biofuel production from exemptions, which EPA grants to small refineries that demonstrate economic hardship from meeting the renewable fuel standard’s biofuel blending requirements. EPA earlier this month said it’s granting an additional 31 exemptions, sparking a backlash from ethanol advocates.

Some biodiesel plants have stopped production, and others appear likely to do so in the weeks ahead, industry sources said.

On the other side of the issue are refiners who say the RFS requirements are a costly mandate that ultimately lead to higher gasoline prices for consumers. The small refinery exemptions are prescribed in the law that created the RFS, starting in 2005 and updated in 2007.

The Small Refiners Coalition, an industry group, said today that it filed Freedom of Information Act requests seeking communications between EPA and the Department of Agriculture, which has pressured the agency to step back on refinery exemptions. Agriculture Secretary Sonny Perdue has said publicly that EPA’s waivers undercut demand for ethanol (Greenwire, April 22).

In considering exemptions, EPA may consult with USDA, but the decision falls on the environmental agency, along with recommendations from the Energy Department. Petroleum industry groups say USDA may be overstepping its authority by putting public pressure on EPA.

EPA said in a statement that officials see no evidence that small refinery exemptions have dampened demand for ethanol. “In fact, the Trump Administration has overseen year-over-year increases in domestic fuel ethanol production, to the highest level in history, and the United States exported a record volume of ethanol in 2018 for the second consecutive year,” the agency said.

A spokesman for the National Biodiesel Board, Paul Winters, called EPA’s position a “ridiculous denial,” and the two industry groups said in their letter that the biodiesel industry has taken the brunt of declining demand. Biodiesel producers want to be included in discussions of other actions the White House might take to counteract the effects, he said.

“Biodiesel producers have suffered the greatest impact from the administration’s small refinery exemptions but have been ignored so far in discussions about how to repair the damage. We’re seeing biodiesel producers across the country — from Pennsylvania to Iowa to Georgia and Texas — shutting their doors and laying off workers as a result of demand destruction,” they said.

Among the measures awaiting EPA decisions are whether to reallocate to other refineries the volume of biofuel that’s been waived at some plants. That’s a request ethanol groups have been making for months, and which EPA hasn’t addressed; groups representing refiners oppose the idea and say it would run afoul of the law.

Stakeholders are also waiting for a final decision from EPA on mandated biofuel volumes for next year.

The latest news of reduced biodiesel production came today from American GreenFuels LLC in New Haven, Conn., which said it would cut production by 50% in the fourth quarter. In a news release, the company blamed the expiration of a federal biodiesel tax credit and EPA’s small refinery exemptions for creating market uncertainty.

The Iowa Soybean Association also wrote to Trump, saying the administration’s actions “are adding to the economic pain Iowa’s farmers and biodiesel producers are experiencing.”