Governors in several states asked the EPA in August to waive the standard, which requires mandatory blending of renewable fuels in gasoline to a certain level. Several groups argued that given this year’s drought, ethanol was driving up the price of corn. This year, the RFS calls for blending of 15.2 billion gallons of renewable fuels.
The EPA said it found that suspending the RFS would reduce corn prices by only 1%.
"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, EPA's air chief said in a statement. "But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact."
Ethanol producers and industry groups applauded the decision.
Brent Erickson, executive vice-president of the Biotechnology Industry Organization’s (BIO) Industrial & Environmental Section, said the EPA made the right decision, and thanked the agency for making a careful and fully considered analysis.
“Earlier studies by researchers at Purdue University, Iowa State University and the University of Missouri’s Food and Agricultural Policy Research Institute showed clearly that a waiver of the RFS would not undo the economic harm caused by the drought,” he said. “However, a waiver of the RFS could have undercut ongoing investments in advanced biofuels. Renewable fuels are a significant contributor to our nation's economy and energy security, creating jobs and directly reducing reliance on imported oil. This decision allows BIO member companies to continue to deliver innovative technologies to the market to expand our domestic production of biofuels, including fuels from agricultural residues, municipal solid waste, algae and purpose grown energy crops.”
POET Chief Executive Officer Jeff Lautt said the EPA made a sound decision in denying the waiver. “As studies have shown, a waiver would have likely had little to no impact on commodities prices in the aftermath of the recent drought. This effort was nothing more than the latest attempt by renewable fuel opponents to undermine policy that has helped make America stronger,” he said. “Today’s decision means the Renewable Fuel Standard remains strong and stable policy, and our industry can move forward with greater confidence, continuing to invest in new technology to make biofuels production even more efficient and commercializing fuel production from cellulosic feedstocks such as crop residue and other plant material.”