Facing a court-ordered deadline for action, the Environmental Protection Agency denied on Thursday 36 requests by small refiners for "hardship" exemptions from the U.S. ethanol mandate. Biofuel and farm groups lamented the decision "fails to remedy the economic harms" of reduced demand for corn ethanol.
The Renewable Fuel Standard, which guarantees corn ethanol and other biofuels a share of the U.S. gasoline market, results in the release of at least as much carbon "and likely at least 24 percent higher" greenhouse gas emissions than the petroleum it displaced, say scientists who studied the program's first eight years.
The Biden administration said it would set the ethanol mandate at its highest level ever in 2022 and reject 65 requests from small refineries for exemptions from the Renewable Fuel Standard (RFS). Both were welcome steps for biofuel backers, but they rebelled at companion proposals to retroactively set the RFS for 2020 and this year below the maximum possible — "a betrayal" of rural America, said a Nebraska senator.
Agriculture Secretary Tom Vilsack said the administration appeared "very close" to releasing a long-promised $700 million in pandemic aid to biofuel producers. The aid was announced in March as part of a remodeling of coronavirus relief programs by the incoming administration.
Biofuels could play an important role in helping the nation reduce greenhouse gas emissions and mitigate the impact of global warming, said an ethanol trade group on Tuesday, with an eye on upcoming infrastructure legislation. Growth Energy suggested the government pay retailers to lower the price of E15 to entice motorists to buy the higher-blend renewable fuel.
The Trump administration proposed a Renewable Fuel Standard of 20.04 billion gallons for 2020, meaning no change in corn ethanol's share of the gasoline market for cars and light trucks, while the share of that market going to cleaner-burning cellulosic ethanol, made from grass and woody plants, will increase by 120 million gallons. Farm groups and biofuel makers, who opened the summer with a celebration that higher-blend E15 was approved for year-round sale, said the EPA bowed to Big Oil.
In a letter to President Trump, five Corn Belt senators said on Monday the EPA "is currently undermining your commitment of a 15 billion-gallon RFS." The Republican senators sent the letter on the same day White House officials were scheduled to discuss possible revisions to the ethanol mandate, which requires oil refiners to blend in the corn-based fuel.
Last October, EPA administrator Scott Pruitt said the agency would investigate whether it has the authority to allow year-round sales of E15, a goal of the ethanol industry. It's still doing the research five months later and may find the answer soon, Pruitt told AgDay TV, when asked about possible changes to the Renewable Fuel Standard.
Oil-state Sen. Ted Cruz captured President Trump's attention two weeks ago with his dramatic proposal to ease the cost of the ethanol mandate on refiners: A price cap on RINs, the credits that refiners buy if they don't blend enough biofuel into gasoline. Farm groups and ethanol makers say Cruz's idea would be a disaster for them, and now some alternative ideas are getting a hearing.
Nearly three months ago, President Trump told oil-state and farm-state senators to find a mutually acceptable resolution to their fight over the Renewable Fuel Standard — the requirement that oil refiners mix biofuel, usually corn-based ethanol, into gasoline and diesel. Now the squabble is back in the president’s hands with a familiar set of proposals on the table for a group of senators who found them unpalatable in the past.
The holding company Icahn Enterprises was subpoenaed for information about its founder’s attempts to change U.S. biofuel policy while he was an informal White House advisor, reported Bloomberg.
President Trump will meet oil industry leaders and their congressional allies for a discussion of the biofuels mandate, reported Reuters, based on two sources. The meeting "could set the stage for negotiations to overhaul the U.S. Renewable Fuel Standard," said the wire service; the industry has pressed for years to eliminate the mandate or revise its requirement to blend biofuels into gasoline and diesel fuel.
China's plan to move to a 10 percent blend of ethanol into its gasoline supply will be a boon for U.S. ethanol exports, said ADM chief executive Juan Luciano. Agrimoney says that Luciano told investors that China could need imports of 8 million tons a year by 2020 to satisfy the E10 target because of the nation's longer-term fuel strategy.
EPA administrator Scott Pruitt quelled midwestern protests over a potential change in course by the Trump administration, saying there would be no additional cuts in the biofuels mandate proposed for 2018. But two groups, the National Biodiesel Board and the Iowa Renewable Fuels Association, said the government ought to raise the target for biodiesel.
Iowa Gov. Kim Reynolds says President Trump affirmed his commitment to biofuels during a telephone conversation amid Midwestern fears of a weaker Renewable Fuels Standard in 2018. Despite encouraging words from Trump and the EPA, the head of an Iowa group said biofuel backers won't rest until the EPA announces its final decision, due by Nov. 30.
Iowa Sen. Charles Grassley, chairman of one of the committees investigating Russian meddling in U.S. elections, said on Twitter that President Trump called him and "he assured me he's pro-ethanol ... he knows that ethanol is good, good, good." The phone call came on the same day the Senate Judiciary Committee said it would interview Trump's son, Donald Jr., in coming weeks as part of the Russia investigation.
Researchers at the University of Southern California are in the early stages of an experiment to farm seaweed for biofuel in the Pacific Ocean. Kelp can grow two to three feet a day without fertilizer, pesticides, fresh water, or arable land — making it an ideal product for the biofuel industry.
The federal mandate to mix corn ethanol into gasoline has plateaued at 15 billion gallons a year, so ethanol distillers are looking for other markets and throttling back on production, says Reuters. Three companies — ethanol industry leader Archer-Daniels-Midland, Green Plains Inc. and Pacific Ethanol — are turning to industrial and beverage alcohol production, an avenue open to them because ethanol is grain alcohol.
The EPA erred when it set the target for biofuels use in 2016 below the levels specified by Congress, said the U.S. Court of Appeals for the D.C. Circuit in a decision that vacated the regulation and ordered EPA to try again. The three-judge panel said EPA improperly interpreted the "inadequate supply provision" that allows it to waive the statutory targets for renewable fuel use.