WASHINGTON, D.C. — President Donald Trump’s decision to approve year-round sales of E15 ethanol without a Renewable Identification Number (RIN) cap was greeted with mixed reaction.
Praise came from farm groups that cheered the move expected to boost the demand for corn-derived biofuel, but criticism from the biofuel industry that the plan included a proposal to count ethanol exports in the Renewable Volume Obligation (RVO) under the federal Renewable Fuel Standard (RFS).
White House spokeswoman Lindsay Walters said by email: “President Trump is pleased to announce that a final decision has been made that allows E15 to be sold year-round, while providing relief to refiners. This outcome will protect our hard-working farmers and refinery workers. The President is satisfied with the attention and care that all parties devoted to this issue.”
The administration announced the deal on May 10 following a closed-door meeting with Trump, EPA Administrator Scott Pruitt, USDA Secretary Sonny Perdue and a group of Republican senators who have urged the White House to change its policy on RFS. The meeting included Iowa Sens. Chuck Grassley and Joni Ernst, Pennsylvania Sen. Pat Toomey and Texas Sen. Ted Cruz.
Grassley said the decision of year-round sales of E15 was the right move. “That’s good news for farmers and for consumer choice at the pump. Allowing higher blends of ethanol to be sold in the summer months fits in well with EPA’s de-regulatory agenda.”
Much gasoline contains 10 percent ethanol; E15 fuel is a blend of 15 percent ethanol and 85 percent gasoline. Currently, the EPA bans sales of E15 during the summer (June 1-Sept. 15) because of studies that show it contributes to smog on hot days. The ban doesn’t include use by flex-fuel vehicles.
The change to E15 won’t take effect until 2019 as the decision works its way through the federal rulemaking process, and it will take time for refiners to get E15 to the pumps to meet next summer’s goal, officials said.
The White House also agreed it would limit RFS “hardship waivers” to refiners and allow the possibility that RIN credits could be applied to exports of renewable fuel.
Grassley told Trump and others that granting EPA hardship waivers for billionaires is hurting biofuel and undermining the RFS. They also undermine the White House’s commitment to meet the annual 15 billion-gallon volume deal under the RFS set by Congress, he said.
The use of such waivers has been an issue for farm organizations, including the National Corn Growers Assoc. (NCGA).
“We have numerous questions about the potential plan now being developed by USDA Secretary Perdue and EPA Administrator Pruitt to address small refinery waivers by potentially offering biofuel credits on ethanol exports, an idea that would harm our ethanol export success,” said NCGA President Kevin Skunes.
“NCGA has opposed RIN credits on exports, an idea that EPA stated last fall that it would not pursue,” he said. “Offering RIN credits which are supposed to be derived from a domestic renewable fuel use, for ethanol exports, would threaten trade markets and impact corn farmers’ economic livelihoods.
“Pursuing a path that includes RIN credits would violate the letter and spirit of the RFS, serving the interests of oil refiners who have already benefited from Administrator Pruitt’s unprecedented RFS volume waivers at the further expense of America’s farmers.”
Kyle Gilley, POET senior vice president of external affairs and communications, said, “We are pleased President Trump has vowed to cut the unnecessary red tape holding back the rural economy and stop Mr. Pruitt’s rampant abuse of hardship waivers for refiners at the expense of American-made biofuels.
“It’s clear the President recognizes the many benefits of year-round sales of E15 for consumers and for farmers who are suffering and facing new threats from trade wars overseas.”
“While there are certainly positives coming out of this meeting, there are several major potential pitfalls that will need to be mitigated as the administration sets out to implement these polices,” National Farmers Union President Roger Johnson stated. “This agreement contains no offset for the dozens of ‘hardship waivers’ that the administration has handed out to oil refiners.”
He said the waivers given by the EPA have authorized up to 1.6 billion gallons in RFS volume requirements, “effectively destroying demand for the surplus corn that is keeping farm prices low for farmers.
“The administration must also avoid any plans that include RIN credits for biofuel exports and pursue actions that restore the demand for biofuels that was lost as a result of ‘hardship waiver’ handouts.”
Further, U.S. Grains Council President Tom Sleight said it is “concerned any move that would relate RINs to exporting ethanol could be severely detrimental to the competitiveness of ethanol exports and would harm the U.S. grains industry.
“We believe,” he said, “RINs for exported ethanol could be perceived as an export subsidy against our World Trade Organization obligations. They could put a target on our back globally.”
As part of the White House agreement, the EPA will examine how to reallocate RFS gallons lost by the special waivers granted during the past two years. Under the RFS, a small refinery may be granted a temporary exemption from its annual RVOs if it can demonstrate that compliance with the RVOs would cause the refinery to suffer disproportionate economic hardship.
The Renewable Fuels Assoc. noted it was pleased with the meeting’s results, favoring the White House decision to “put to rest the idea of a price cap on RINs,” saying it was “a big win for farmers and ethanol producers.”