Ethanol groups pleased with RFS volumes, biodiesel disappointed | TheFencePost.com

Ethanol groups pleased with RFS volumes, biodiesel disappointed

-The Hagstrom Report

The Environmental Protection Agency on Nov. 30 finalized a rule that establishes the required renewable fuel volumes under the Renewable Fuels Standard program for 2018, and biomass-based diesel for 2019.

The final standards for 2018, and for biomass-based diesel for 2019, are only slightly changed from the proposed standards that EPA issued earlier this year, the agency noted in a news release.

The agency set a total renewable fuel blending obligation of 19.29 billion gallons next year, maintaining the statutory requirement of 15 billion gallons of conventional biofuel such as corn-based ethanol and 4.29 billion gallons of advanced biofuel, including 288 million gallons of cellulosic biofuel, a slight increase from earlier proposals.

The 2019 biodiesel amount is set for 2.1 billion gallons.

The volumetric requirements were released following major conflicts between renewable energy groups and legislators from renewable fuels-producing states who encouraged President Donald Trump to put pressure on EPA Administrator Scott Pruitt, a former Oklahoma attorney general and renewable fuels skeptic, to maintain the program.

"Maintaining the renewable fuel standard at current levels ensures stability in the marketplace and follows through with my commitment to meet the statutory deadlines and lead the agency by upholding the rule of law," Pruitt said in the announcement.

Recommended Stories For You

The Clean Air Act requires EPA to set the RFS volume requirements annually and to finalize the standards by Nov. 30 for the following year.

Emily Skor, CEO of Growth Energy, which represents ethanol plant builders and managers, said, "We applaud the administration for standing up against efforts to destabilize the Renewable Fuel Standard."

"The EPA's on-time announcement upholds the statutory targets for conventional biofuels, which will provide much-needed certainty for hard-pressed rural communities." Skor said.

"We would like to have seen a boost to the target blending levels for cellulosic biofuels, and we will continue to work with the administration to advance the RFS goal of further stimulating growth and showing U.S. leadership in 21st century fuels."

Renewable Fuels Association President Bob Dinneen said, "The final rule is a marked improvement, increasing both total renewable fuel and cellulosic biofuel volumes by 50 million gallons over the proposed levels."

"Still, we would encourage EPA to closely monitor the commercialization of new cellulosic technologies, particularly regarding corn kernel fiber conversion, because we believe greater cellulosic production is likely," Dineen said. "The RFS needs to remain a forward-looking program, driving investment in these new technologies."

"The biofuels industry will rise or fall together, and thus we are disappointed the final rule is not more aggressive with regard to other advanced biofuels such as biodiesel, which has become a major market for the corn distillers oil co-product made by dry mill ethanol plants," Dinneen said.

American Coalition for Ethanol CEO Brian Jennings said "ACE members are very pleased that the statutory 15-billion-gallon volume for conventional biofuel will be maintained in 2018 and that EPA is increasing the advanced biofuel volume to 4.29 billion gallons."

"While the 288 million gallons of cellulosic biofuel EPA is calling for in 2018 is a small increase from the volume proposed earlier this year, it is disappointing the 2018 volume represents a decrease from the 2017 cellulosic biofuel level of 311 million gallons," Jennings said. "We firmly believe the technology exists to increase cellulosic biofuel targets."

The National Biodiesel Board noted that the July proposal recommended only 4.24 billion gallons of advanced biofuels and 2.1 billion gallons of biomass-based diesel — a reduction and a flatline, respectively, from last year's standards and that the announcement today requires 4.29 billion gallons of advanced biofuels for 2018 and 2.1 billion gallons of biomass-based diesel again for 2019.

Doug Whitehead, the NBB chief operating officer, said, "EPA Administrator Pruitt has disappointed the biodiesel industry for failing to respond to our repeated calls for growth."

"These flat volumes will harm Americans across several job-creating sectors — be they farmers, grease collectors, crushers, biodiesel producers or truckers — as well as consumers," Whitehead said.

"Nevertheless, we can't thank our members and our biodiesel champions at the state and federal levels enough for their tireless advocacy and education efforts. We'll continue to work with the administration to right this wrong for future volumes."

The American Soybean Association, whose members produce a key ingredient for biodiesel, said the volumes are "another example of a missed opportunity to capture the full potential and value of biodiesel."

ASA President Ron Moore said, "We're disappointed today, as we had originally pushed for a level of 2.5 billion gallons for biomass-based diesel in 2019 and 4.75 billion gallons of total advanced biofuels for 2018, but we'll continue in our work to develop even greater capacity within our industry, and we urge EPA and the administration to take another look at biodiesel and the value U.S. soybean farmers bring to the domestic energy discussion."

The RFS program was created under the 2005 Energy Policy Act and expanded by the 2007 Energy Independence and Security Act. The RFS program is a national policy that requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel.