The EPA is responsible for issuing annual regulations to ensure fuel sold in the United States contains the correct volume of renewable fuel. Also, the EPA is obligated to set the annual renewable volume obligation (RVO) for the upcoming year by Nov. 30. The EPA’s recently released 2018 RFS proposal calls on refiners to blend 15 billion gallons of conventional renewable fuels like corn ethanol in 2018, adhering to the statutory requirement and unchanged from the final 2017 RVO rule. A hearing was held on Aug. 1 by the EPA to hear testimonies from those who wanted to speak on the matter.
John Heisdorffer, vice-president of the ASA and an Iowa farmer, called on the EPS to increase the RFS volumes for biomass-based diesel to at least 2.75 billion gallons for 2019 and to increase total advanced biofuels volumes to 5.25 billion gallons in 2018.
During the hearing, Heisdorffer noted that the biodiesel industry has expanded markets for farmers and livestock producers and created new jobs and economic growth, particularly in the rural United States. Biodiesel production creates a value-added market for the co-product soybean oil generated by the growing global demand for protein meal.
“The biodiesel industry has provided these benefits without any significant disruption or adverse impacts to consumers,” Heisdorffer testified. “Our industry has always advocated for RFS volumes that are modest and achievable and we have met or exceeded the targets each and every year that the program has been in place.”
Also at the hearing, Keith Alverson, NCGA board member, spoke about the benefits of a local ethanol plant in his community helping him move back to producing corn.
“My local ethanol plant was constructed one year prior to my college graduation,” Alverson said. “That plant and the economic opportunity it created is a large part of what enabled me, as well as other young farmers, to return to the farm. Because ethanol production is a vital market for corn farmers, we are pleased EPA proposed an implied volume of 15 billion gallons for conventional renewable fuel.”
While commending the EPA’s proposed volume for conventional renewable fuels, Alverson expressed concern that EPA proposed an overall volume of renewable fuels that is 40 million gallons below 2017 figures, and a cellulosic biofuel volume that is 73 million gallons lower.
“Corn farmers recognize the strong link between first- and second-generation biofuels and the role corn fills in producing the next generation of homegrown fuel that increases our energy security and lowers costs for consumers,” Alverson said. “We ask the EPA to maintain the proposed conventional fuel requirement in the final rule… (but) set higher final volumes for cellulosic, advanced and total biofuels in order to draw the continued investment and innovation needed to maintain the expansion of cellulosic and advanced fuel production.”
The EPA noted that it will initiate a separate re-set rule, since a reduction in both the cellulosic ethanol and advanced biofuel requirements have triggered this authority.
“We respect the agency’s obligation to reset the advanced and cellulosic biofuel targets to provide greater long-term stability and certainty in these markets,” said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association (RFA) during the hearing. “But we caution the agency that reset does not mean repeal, and the agency must be faithful to the spirit and intent of the RFS, which is to maximize the nation’s use of these fuels, to drive marketplace innovation and investment in these new technologies, and to make the U.S. more energy diverse and lower carbon emissions from transportation fuels. Congress entrusted EPA with the ability to reset the RFS, not to gut the RFS.”
Dinneen also told the EPA about continued concerns with RIN market manipulation and suggested the EPA continue to allow imported biofuels to help comply with the RFS.
“The RFS is not the platform to address trade concerns,” he testified. “The RFS has been an incredible success story – lowering consumer gasoline costs, creating jobs, reducing carbon, stimulating investment in new technologies, providing energy and economic security, and assuring a more sustainable energy future.”
A strong RFS will continue to help drive investment and ensure the future growth of ethanol, the cleanest, lowest cost and highest source of octane on the planet, he added.