Ethanol to Make Case With Biden

Source: By  Todd Neeley, DTN Staff Reporter • Posted: Sunday, March 28, 2021

Comments by EPA’s Regan on Advanced Biofuels Catches Industry’s Attention

Ethanol industry officials say they believe they'll have to make the case with the Biden administration that corn ethanol is an advanced biofuel. (DTN photo by Getty Images)
Ethanol industry officials say they believe they’ll have to make the case with the Biden administration that corn ethanol is an advanced biofuel. (DTN photo by Getty Images)

LINCOLN, Neb. (DTN) — EPA Administrator Michael Regan expressed support for the Renewable Fuel Standard, and especially advanced biofuels, during the Agri-Pulse Ag and Food Policy summit on Wednesday. The comment drew the attention of ethanol and agriculture industry officials, who now realize they need to make the case with the Biden administration that corn-based ethanol is an advanced biofuel, https://www.dtnpf.com/…. After Regan’s comment, National Corn Growers Association CEO Jon Doggett had the occasion to talk to Regan this week.

“I challenged him a bit yesterday when we talked because he had said we need to work on advanced biofuels,” Doggett said during the Nebraska Ethanol Board’s emerging issues forum on Friday.

“My point to him was, ‘Mr. Administrator, corn is an advanced biofuel.’ Now, the corn that existed back when we did the 2008 energy bill is completely different than it is today. The ethanol processes that were in existence in 2008 are completely, completely different than we have today. We have made all of this advancement, and now you’re going to go ahead and limit us because of a term that is no longer relevant.”

The RFS is coming up on a reset in 2022, during which time the EPA will have the statutory authority to determine biofuel volumes. Currently, the EPA has continued to make sure 15 billion gallons of corn-based ethanol is required to be blended. Not only have ethanol plants become more efficient, but ethanol’s greenhouse gas emissions are 40% to 50% lower than gasoline’s emissions. The RFS requires an advanced biofuel to have 50% lower GHGs.

Brian Jennings, CEO of the American Coalition for Ethanol, said the industry will have to work to persuade the new EPA administrator about corn ethanol’s GHG record.

“Now we hear Michael Reagan say all the right things, right,” Jennings said. “‘I have an open-door policy. We’re going to restore transparency and integrity to the RFS. There won’t be any surprises. We’re going to follow the science.’ Those are all very encouraging things to hear from the new EPA administrator. We also hear him very, very carefully talk about biofuels and specifically say, ‘Well, we’re especially supportive of advanced biofuels.’

“We’ve got to be very persuasive and making the case my colleagues have cited (about) the lifecycle, the latest lifecycle science that suggests just your average corn ethanol is 50% cleaner than gasoline. We’ve got to reframe this discussion for the Biden administration and for EPA.”

Geoff Cooper, president and CEO of the Renewable Fuels Association, said EPA has indicated it will not meet the October 2021 deadline to finalize an RFS reset rule.

Instead, he said, it is more likely the agency will have a proposed rule ready by late summer or early fall this year.

The EPA will have several statutory factors to evaluate in determining RFS volumes in 2023 and beyond. That includes the effect of the RFS on energy security, fuel prices, farm income, rural economic development, food prices, commodity prices, environmental quality and emissions.

“Any objective analysis on any of those factors is going to show that the RFS has been an absolute winner,” Cooper said. “It has improved the environment, it has reduced fuel costs for consumers, it has boosted farm income and helped rural economies.

“On that basis, we shouldn’t expect to see anything less than what we see in 2022. When we talk about 2023 and beyond, in terms of volumes, we expect the RFS to continue to be a growth driver for the industry long-term.”

Emily Skor, CEO of Growth Energy, said the RFS reset will be “a massive rulemaking,” requiring industry groups to present all the data necessary to prove ethanol’s performance.

“It is going to be a big part of all of our engagement in the months ahead with EPA,” she said.

“We’ve been building out the data to remake the case for ethanol for actually several years now,” Skor said. “And we’ll have to remake the case. But we start with the premise that the RFS of tomorrow has to be stronger than the RFS today. So, there should be — and we need to make sure there are opportunities for — continued growth.

“I think we also have to manage our expectations. It is not going to necessarily deliver kind of the seismic step change in demand that we would see with some other mechanisms. But it’s going to be really, really important for the industry. And it’s something that we can’t take for granted this year.”

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

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