New Year, new RFS pushback

Source: BY MATTHEW CHOI, Politico • Posted: Thursday, January 13, 2022

The ethanol industry was on the defensive Wednesday after Reuters reported the Biden administration is considering lowering the 2022 ethanol blending mandate below the proposed 15 billion gallons as part of its final rule. ME readers will recall the administration proposed retroactively reducing 2020 biofuel blending requirements and setting the 2021 volume near the actual demand level, but called for ramping the levels up for 2022 in what was seen as an attempt by the administration to walk the fine line between farming and refining interests.

But Reuters reported Wednesday that the administration is seeing strong backlash from the refining lobby and unions over the 2022 proposal, which argue that the U.S. ethanol industry can’t support the target. Unions and refiner groups repeatedly pushed back against the proposed 2022 levels during a virtual public hearing last week, arguing the proposal was too high and would negate the benefits of the 2020 and 2021 proposals.

Asked about the report during Wednesday’s House Agriculture hearing on EVs, Renewable Fuels Association President and CEO Geoff Cooper said the group “would be greatly concerned” if EPA is backtracking on the 2022 proposal. “We’re going to try and get to the bottom of those rumors and will be absolutely insisting that EPA and this administration follow through on their commitment to restore that 15-billion-gallon commitment for 2022 and beyond,” he said.

Grain of salt: Asked about the report, one person in the refining industry told Kelsey there’s “some nervousness” given the extensive union pushback, as well as concerns over gas prices and jobs, but the person cautioned there haven’t been any definitive signals one way or another on whether the administration will act.

In the meantime, union leaders continue to press their case.There was a call earlier this week during which several union leaders from the Philadelphia area voiced their concerns about the proposal to EPA and White House officials, a person with knowledge of the call told Kelsey. EPA later confirmed there were two calls — one with national unions and a second call with unions and companies — but the agency did not provide any readouts or confirm any details.

“EPA remains committed to the growth of biofuels in America,” EPA spokesperson Nick Conger said. “We look forward to reviewing the robust comments that we receive from all stakeholders before finalizing our rulemaking later this year.” Comments on the proposal are due Feb. 4.