President Trump, who campaigned for election as a friend of corn ethanol, ought to stop the EPA from issuing “hardship” waivers that free refineries from complying with the so-called ethanol mandate, said ethanol and farm groups. The EPA approved 31 waivers for small-volume refineries on Friday without comment.
“Farmers are on the front lines of the tariff war and this announcement by the EPA will only make things worse,” said House Agriculture chairman Collin Peterson. The National Corn Growers Association pointed to the long-running slump in farm income and said, “It’s time for this administration to act in the best interest of farmers.” Trade group Growth Energy said “Trump must move quickly if there is any hope of repairing the damage” to the ethanol industry and rural America.
On its website, the EPA said it approved 31 of 40 requests for waivers from the Renewable Fuel Standard (RFS) in 2018, compared to 35 waivers for 2017. Since Trump took office, the agency has approved far more waivers than during the Obama years. The law that created the RFS included a provision for waivers to small refineries that face high costs to blend ethanol into gasoline or to buy credits to bring themselves into compliance.
Trump has acted repeatedly as referee between the ethanol sector and the oil industry. He approved year-round sales of E15, a richer blend of ethanol than the traditional 10 percent mix, potentially expanding ethanol sales. At the same time, he supported reforms to reduce speculation in the price of the credits, officially Renewable Identification Numbers, that refiners must buy if they fall short of targets for ethanol use. The oil industry says the credits are important because the fuel market is becoming saturated with E10.
The Renewable Fuels Association trade group said the EPA decisions on waivers are “cloaked in secrecy and bias” in favor of oil refiners. The RFA said 13 ethanol plants have closed recently “due in large part to the demand loss” created by the waivers. The ethanol industry says the waivers erode the market for biofuels. Industry leaders say EPA should re-allocate the obligations among other refiners.
“The decision to grant small refinery hardship is a legal decision, not a political one, and we’re pleased that USDA’s influence didn’t cause EPA to depart from the rule of law,” said LeAnn Johnson of the Small Refiners Coalition.
A month ago, the EPA proposed a no-growth RFS of 20.04 billion gallons for 2020. Corn ethanol’s share of the gasoline market would hold steady at 15 billion gallons while the share going to cleaner-burning cellulosic ethanol, made from grass and woody plants, would rise by 120 million gallons.
Agricultural lender CoBank forecasts flat domestic demand for ethanol over the next two years, with exports as an area of optimism. “Some ethanol plants will be forced to shut down or idle their production,” said CoBank in a recent report.
The EPA coupled word of its impending decisions on RFS waivers with an announcement that it intends to expedite a review of atrazine, a widely used weedkiller. “EPA is committed to an expeditious and transparent process to ensure America’s corn growers have the tools they need,” said the agency.