Biofuel groups ask Trump to continue to grow the RFS

By Erin Voegele | October 03, 2017

On Oct. 3, a group of biofuel supporters sent a letter to President Trump expressing concern over the U.S. EPA’s recent proposal that could reduce 2018 and 2019 blending obligations under the Renewable Fuel Standard.

In late September, the agency published a notice of data availability (NODA) seeking comments on potential reductions in 2018 and 2019 RFS renewable volume obligations (RVOs). The potential reductions primarily target biomass-based diesel, but would potentially result in corresponding reductions in RVOs for advanced biofuels and total renewable fuel. Release of the NODA followed the July release of EPA’s proposed rule to set 2018 RVOs under the RFS, along with the 2019 RVO for biomass-based diesel.

In the letter, the biofuel supporters stressed that the EPAs actions “would undercut investment in the production of American-made biofuels such as ethanol and biodiesel.” The letter also states that the “proposed changes are inconsistent with the law and threaten the growth and prosperity of the U.S. biofuels industry.”

According to the groups, the EPA’s proposed changes are inconsistent with assurances made by EPA Administrator Scott Pruitt to uphold the law and Trump’s long-standing support of ethanol and the RFS. “If the proposed changes are finalized, EPA’s actions would cause severe harm to our industry, undermining your efforts to drive economic growth and secure America’s status as the global leader in biofuel production,” wrote the groups. “We urge you to act quickly to continue to grow the RFS, and we would look forward to working with you and your staff to do so.”

Within the letter, the groups clarify where the biofuels industry stands on four key RFS issues. First, they indicated that the final 2018 RVOs must require 15 billion gallons of conventional biofuels, as proposed. “We oppose any weakening of the conventional biofuel standard,” they said in the letter.

Second, the letter notes EPA’s proposed rule flat-lines the 2019 RVO for biomass-based diesel while cutting the cellulosic biofuel RVO by approximately 25 percent when compared to 2017 levels. “The volumetric cuts are unwarranted, and we have serious procedural concerns about how EPA reached its conclusions,” said the letter, noting that public records show the EPA sent a stronger, pro-growth proposal to the White House Office of Management and Budget, but that EPA leadership intervened to make drastic changes to the proposal following OMB review. According to the biofuel groups, EPA leadership inserted a modified methodology to the proposal that discounts projected advanced biofuel volumes based on actual production for 2016. The letter calls the new approach a “major policy shift long sought by the oil industry.” The biofuel groups argue this new methodology should be dropped. “The final proposal must be forward looking and continue to grow advanced biofuel volumes,” they said in the letter.

Third, the letter notes that the NODA proposes making biofuel imports ineligible for the RFS and indicates that the EPA is also reportedly exploring the prospect of making biofuel exports eligible for RFS compliance. “These proposals originate from the same small group of petroleum refiners seeking to avoid the law by moving the RFS point of obligation, and would serve no purpose other than to paralyze growth in the U.S. biofuel markets, slow investment in blending infrastructure, strand investment in advanced biofuels, and export innovation overseas,” wrote the groups in the letter, noting the creation of an “export subsidy RIN” may violate statute and will almost certainly provoke a trade backlash.

Finally, the letter points out that the EPAs RFS proposal aims to exclude new cellulosic biofuel gallons from facilities unable to secure registration from the EPA the year before the actual compliance year. “While we would not expect EPA to allow non-registered fuels to be eligible for compliance credits, there is no harm in receiving registration early in the compliance year and selling fuel thereafter,” said the groups in the letter, noting the approach would slow down, rather than accelerate, the commercialization of cellulosic fuels.

The letter is signed by the Advanced Biofuels Business Council, American Biogas Council, American Coalition for Ethanol, American Equipment Manufacturers, Biotechnology Innovation Organization, Growth Energy, Iowa Renewable Fuels Association, National Biodiesel Board, National Corn Growers Association, National Farmers Union, and the Renewable Fuels Association. A full copy of the letter can be downloaded from the ACE website.