Small refinery waivers will continue to take a chunk out of the gallons of biofuel that should be blended into our nation’s transportation fuel supply under the Renewable Fuel Standard, thanks to the Environmental Protection Agency’s announcement late Friday that granted 31 more exemptions, representing 1.43 billion gallons of additional lost RFS demand. Only six of the requests for 2018 were denied by the agency, and this latest action brings the total number of waivers granted from 2016-2018 to 85. That compares to only 23 granted in the previous three years.
Renewable Fuels Association (RFA) President and CEO Geoff Cooper says they were shocked by the announcement after President Trump heard directly from farmers and ethanol plant workers about the disastrous economic impacts of these small refinery handouts during his visit to an Iowa ethanol plant two months ago. “At a time when ethanol plants in the Heartland are being mothballed and jobs are being lost, it is unfathomable and utterly reprehensible that the Trump Administration would dole out more unwarranted waivers to prosperous petroleum refiners,” said Cooper.
“Waivers reduce demand for ethanol, lower the value of our crop and undermine the President’s support for America’s farmers,” said National Corn Growers Association (NCGA) President Lynn Chrisp. “Farmers are facing a sixth consecutive year of depressed income and commodity prices, with farm income for 2019 projected to be half of what it was in 2013.”
American Coalition for Ethanol (ACE) CEO Brian Jennings says EPA’s action reinforces the need to challenge the agency in court to restore lost volumes of renewable fuel resulting from the unprecedented number of retroactive waivers. “The RFS is supposed to ensure the use of ethanol and biodiesel increases from one year to the next, but 85 Small Refinery Exemptions later and over 4 billion waived gallons represents an enormous step backwards,” said Jennings.
The biodiesel industry is being hit especially hard by the refinery waivers, according to the National Biodiesel Board (NBB).
“EPA and administration personnel are well aware that the ongoing spree of big oil exemptions destroy demand for biodiesel and render the RFS program meaningless,” said Kurt Kovarik, NBB’s Vice President of Federal Affairs, who adds that damage to the U.S. biodiesel and renewable diesel industry could reach $7.7 billion or 2.54 billion gallons.
House Agriculture Committee chair Collin Peterson (D-MN) also reacted to the news. “The Administration tried to bury bad news for rural America by quietly approving 31 more waivers this Friday afternoon that undermine the Renewable Fuel Standard (RFS) and the market for corn. On Wednesday, I hosted a packed forum at Farmfest with Secretary Perdue where farmers raised this issue again and again. Farmers are on the front lines of the tariff war and this announcement by the EPA will only make things worse.”