WASHINGTON, D.C., U.S. — Major ethanol producers and trade organizations warned of negative impacts should a leaked U.S. Environmental Protection Agency (EPA) proposal to change the Renewable Fuels Standard (RFS) come to fruition.
According to news reports, the EPA proposal would cut the mandated level of ethanol blended into U.S. gasoline from 14.4 billion gallons to 13 billion gallons.
Leading advanced biofuel trade organizations and companies noted that EPA must continue to follow the data-driven approach it has used to date in order to open the market to competition and achieve the goals of the program.
“The RFS is engineered to address challenges like the oil industry’s historic and current refusal to blend more renewable fuels. Investors in next generation biofuels understand how the RFS and RIN values work to introduce market access for advanced biofuels. As such, any perceived unwillingness on the part of RFS administrators to allow the program to work would send a clear signal to the advanced biofuel marketplace that the RFS may not be allowed to change market behavior as promised. This mere possibility increases investment risk, which in turn decreases the effective deployment of advanced biofuels,” said the Advanced Ethanol Council (AEC), the Biotechnology Industry Organization (BIO), and 37 of their member companies in a letter to the White House.
“On the legal side, we believe that any reliance on the blend wall to provide effective waiver of the program presents the same problem. The legal standard for a waiver is narrow by design.”
Separately, Archer Daniels Midland (ADM) said a reform in the RFS would change the rules which encouraged it to make hefty investments in the sector.
"We have invested based on the policy, and we invested for the long-term," John Luciano, ADM chief operating officer, told investors.
Valero, which mixes ethanol into gasoline and also produces ethanol, called the proposal “poor.”
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