Make Biofuels Part of Paris Agreement Implementation

History was made this week with the signing of the Paris Agreement climate accord by 130 countries at the UN Headquarters in New York. The governments now have one year to ratify the accord. The Paris Agreement will enter into force on the 30th day after the Paris-Agreement_Logo_EN_sizedate on which at least 55 Parties to the Convention accounting in total for at least an estimated 55 percent of total global greenhouse gas emissions have finalized their adoption of the accord. In response, the global biofuels community is calling on these countries to include biofuels as part of their greenhouse gas reduction goals.

Nearly a third of global GHGs come from the transportation sector making it a key area of focus in efforts to reduce emissions. Studies have shown that biofuels, like ethanol, are proven to reduce harmful GHGs from 40 percent to 90 percent compared to fossil fuels according to the Global Renewable Fuels Alliance (GRFA).

GRFA logo“It is clear that the biofuels industry generally, and ethanol specifically, will continue to have a significant role to play in international efforts to transition away from carbon-intensive fossil fuels in the transport sector,” said Bliss Baker, GRFA spokesperson. “As countries look to take policy steps to reduce GHG emissions in their transport sectors, the GRFA will continue to provide technical support for the adoption of ethanol-supportive policies that will maximize the advantages of biofuel technologies.”

At the end of March, U.S. President Barack Obama and Chinese President Xi Jinping agreed to historic reductions in GHG emissions. President Obama pledged that the U.S. would cut its emissions by 26 percent by 2025 compared with 2005 levels. In turn, President Jinping promised that China’s emissions would peak by 2030 and fall after that, the first time China has agreed to any emission reduction targets.

However, as the Renewable Fuels Association (RFA) points out, the U.S. did not include the roll biofuels would play in its Intended Nationally Determined Contribution (INDCs), a plan submitted by each country outlining how it would meet emission reductions. So far 37 countries have included biofuels in these plans. Continue reading

#EarthDay, #Ethanol and the Global Climate

ethanol-report-adThe signing of the Paris Climate Agreement on Earth Day 2016 puts the focus on what countries are doing to make the world a better place, and some of the nearly 170 countries signing the accord are backing the use of renewable fuels like ethanol for cleaner air. In this Ethanol Report, Renewable Fuels Association president and CEO Bob Dinneen talks about the environmental benefits of ethanol and how the United States could have done more in the agreement to promote renewable fuels. He also shares his thoughts about what the oil industry costs American taxpayers on Tax Day.

Listen here: Ethanol Report on Earth Day

Iowa Senate Passes RFS Resolution

The Iowa Senate has passed a bipartisan resolution in support of the federal Renewable Fuel Standard (RFS) through 2022. The resolution calls on Congress, the Environmental Protection Agency (EPA), President Obama, and the next president to support the policy as passed by Congress in 2005.

dontmesswithRFS_logoSenate Resolution 118 names the RFS as one of the single most successful energy policies in our nation’s history and goes on to say, “Under the RFS, renewable fuels have access to a retail market in the face of a vertically integrated petroleum market; and whereas, the RFS represents a congressional promise to American biofuels producers, farmers, communities, and investors that the blend levels of the RFS will increase each year; and whereas, this congressional policy support the RFS will continue to build on the long-term capacity of the renewable fuels industry and will encourage the development of new types of clean fuels…”

The resolution serves as a reminder of the benefits of the RFS to the state of Iowa in terms of economic output and the preservation of Iowa’s agricultural way of life. “The RFS has been a tremendously successful bipartisan policy that’s worked to reduce our dependence on foreign oil by producing our own clean American fuel and in leading the innovation of 21st century solutions to our energy needs. We need to keep this momentum going and I commend the Iowa Senate for passing this resolution,” said Tom Buis, co-chair of Growth Energy.

EIA Reports Biodiesel Production on the Rise

According to a recent Today in Energy, published by the Energy Information Administration (EIA), biodiesel production is back on the growth track. In 2014 amid concerns over the Renewable Fuel Standard (RFS) and the expiration of the biodiesel blender’s tax credit, biodiesel production dropped after reaching record production levels in 2013. However, as biodiesel blends were increased for 2015 under the RFS, U.S. imports of biodiesel and renewable diesel increased by 61 percent in 2015 reaching 538 million gallons of production.

US biodiesel chartThe most influential drivers of the increase has been increasing RFS targets and the biodiesel tax credit, although it has lapsed and been reinstated several times. Another driver is California’s Low Carbon Fuel Standard (LCFS).  In addition, biomass-based diesel fuels have additional advantages over other renewable fuels due to their relatively high energy content and low carbon intensity, which allow them to qualify for higher credit values in both renewable fuel programs.

Today U.S. biodiesel and renewable diesel are primarily made from soybean oil, waste vegetable oils or animal fats. The blends range from B5, or five percent biodiesel, 95 percent diesel, to B20. The difference between biodiesel and renewable diesel is that renewable diesel meets specifications for use in existing infrastructure and diesel engines and not subject to blending limitations. However, it should be noted that all diesel engines can use biodiesel blends.

In terms of biodiesel imports, more than half the gallons came from Argentina (183 million gallons of 334 million gallons). In January of 2015, the EPA approved the RFS pathway for Argentinean biodiesel allowing the fuel purchased to quality for Renewable Identification Number (RIN) credits. The remaining gallons came from Indonesia and Canada. EIA reports that all U.S. renewable diesel imports in 2015 were sourced from Singapore and entered the country primarily through West Coast ports, likely destined for California LCFS compliance.

IRFA Testifies at Senate Ag Subcommittee Hearing

irfa-shaw-hearingIowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw recently testified before the Senate Agriculture Subcommittee on Rural Development and Energy. The hearing focused on USDA Rural Development Programs and their economic impact across the country. Shaw said during his testimony that properly supporting renewable fuels programs are vital to the well-being of rural America.

“I think it can be fairly stated that no other effort to improve rural economies made the impact that renewable fuels did,” Shaw testified. “Then, in late 2013, the Obama Administration proposed Renewable Fuel Standard levels far below statutory levels. The economic fallout was predictable and painful. The last two years have seen a dramatic downturn in the health of rural America. Corn prices plummeted, land values fell, farm income plunged, and agribusinesses laid off workers by the thousands.”

Shaw highlighted several Energy Title programs under the Farm Bill, including the Bioenergy Program for Advanced Biofuels, the Renewable Energy for America Program and others, that have provided strong returns on investment. “However, the effectiveness of these programs is reduced by a lack of consistent and timely funding.”

Shaw also asked the Senate leaders to support other programs outside the Farm Bill that can boost rural economies. “The Renewable Fuel Standard, the USDA’s Biofuels Infrastructure Partnership, and equalizing vapor pressure treatment for E10 and E15 are all additional programs you can support that are vital to the well-being of rural America.”

Push Poll Push Back

The American Petroleum Institute has unveiled yet another anti-biofuel poll. The latest released during a media call today was conducted by Harris Poll. According to the poll, 77 percent of registered voters are concerned that breaching the so-called  ethanol blend wall would drive up the cost of gasoline for consumers and reduce the nation’s fuel supply (85 percent Republicans, 75 percent of Democrats and 71 percent of independents).

“Across the political spectrum, voters are concerned about the significant damage the RFS mandate and higher ethanol blends could cause to automobiles, motorcycles and almost every type of gasoline powered engine,” said API Downstream Group Director Frank Macchiarola during the media call. “Regardless of their party affiliation, voters are concerned with mandates that try to force too much ethanol into our fuel supply.

Listen to the API media call here: API Media Call on Anti-Ethanol Push Poll

In response to the news, Renewable Fuels Association President and CEO Bob Dinneen said, “It’s no surprise that API, an organization which has made its top priority to get rid of the RFS, is trotting out a phony faux poll to support its antediluvian narrative about biofuels. This push poll, which uses opinionated statements to elicit a negative responIowa-RFA-logo-new1se to biofuels, is not reflective of reality. For example, the renewable fuel standard (RFS) has not raised food prices 25 percent, as API claims, but instead food prices have risen by an average of just 2.7 percent per year since 2005, the year RFS was adopted. In fact, only 17 cents of every dollar spent on food pays for the raw farm ingredients in the food item. The other 83 cents pay for processing, transportation, labor, packaging, advertising and other costs.

“If you want to know what the American public really thinks, with direct questions and no spin, look no further than a Morning Consult poll conducted April 1–3, on behalf of RFA, in which nearly six in 10 registered voters (57 percent) support the RFS. Conversely, only 19 percent oppose the RFS. Additionally, 64 percent of those polled have a favorable opinion of biofuels and two-thirds (66 percent) have a favorable opinion of corn-based ethanol. This data is consistent with the findings from the approximately 18,000 registered voters we have polled over the past year.

“With these growing levels of support for biofuels, it’s no wonder that API President Jack Gerard told Politico’s Morning Energy last month that the organization was pivoting its strategy toward reforming, rather than repealing, the RFS. API can’t continue to support repeal because Americans want more fuel choice, not less,” Dinneen concluded.

The Morning Consult poll included results from 2,004 registered voters, with a margin of error of +/-2 percent. To view a copy of the poll results, click here.

USDA Reports Positive for #Corn Supplies

USDAThe 2016 Prospective Plantings report out today from USDA’s National Agricultural Statistics Service (NASS) shows farmers expect to plant more corn than expected this year.

U.S. corn growers expect to plant 93.6 million acres to corn this year, the first increase in corn planted acreage since 2012 and, if realized, will be the third largest corn acreage since 1944. Farmers in 41 out of the 48 states expect to either maintain or increase the number of acres they plant to corn. Growers in Illinois, Iowa, Kansas, and North Dakota expect to increase their corn acreage by 400,000 or more acres in 2016. Assuming the five-year average 91.3 percent harvest rate and the projected 25-year trend yield of 165.4 bushels per acre is achieved, farmers will harvest 14.13 billion bushels, nearing the production record of 14.2 billion bushels set in 2014, according to the National Corn Growers Association (NCGA).

In addition, the new grain stocks report increases corn stocks in all positions as of March 1 by one percent compared to this time last year. Stocks totaled 7.81 billion bushels and of the that, 4.34 billion bushels were stored on farms, down 1 percent from a year earlier. Off-farm stocks, at 3.47 billion bushels, are up 3 percent from a year ago.

“U.S. farmers produced an abundant crop in 2015. Given the strong carryover entering this growing season, we may see quite a large corn supply at harvest should weather prove favorable in 2016,” said NCGA President Chip Bowling. “While many factors may change the reality on the ground as planting progresses, American corn supplies should remain ample for the year to come. Given the impact this continues to have on prices, the work being done at NCGA to grow demand will prove even more important as we work to find markets for our product and remain profitable into the future.”

Renewable Fuels Association (RFA) president and CEO Bob Dinneen says the planting intentions show that American farmers are continuing to hold up their end of the deal when it comes to the Renewable Fuel Standard (RFS). “They’ve made the investments and planting decisions necessary to provide adequate supplies of grain to meet all demands, including the feedstock needed to produce the 15 billion gallons of ethanol required in 2016 under the RFS statute,” commented Dinneen. “But by slashing the RFS requirements for 2016 below statutory levels, the Administration isn’t honoring its commitment to our nation’s farmers and is contributing to great economic uncertainty in the agriculture sector.”

Dinneen adds that the report underscores the importance of getting the RFS back on track and growing corn demand.

Senators Call for Increased RFS RVOs

This week Senators Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.) and 17 others sent a letter to the Environmental Protection Agency (EPA) calling for them to follow the congressional intent of the Renewable Fuel Standard (RFS) by increasing blending targets (Renewable Volume Obligations/RVO) for 2017. The biofuels industry praised the senators for their call to action and released a joint statement.

epa-150“We want to thank all 19 senators for highlighting the biofuel industry’s concerns with EPA incorrectly citing distribution infrastructure as a factor in setting the 2014–2016 blending targets, and urging the agency to reverse course for the 2017 rule by simply following congressional intent. That is the very heart of why we and other biofuel groups filed a lawsuit in January against EPA.

Getting the RFS back to the statutory levels congress intended is critical in moving our nation forward to energy independence by using cleaner burning, homegrown biofuels, like ethanol, which reduce harmful emissions and our reliance on foreign oil imports. As important, returning to the statutory levels intended by Congress will provide the necessary certainty producers need to move forward with critical business decisions.

Back in the fall of 2015, Administrator McCarthy addressed biofuels stakeholders, saying, ‘EPA is working hard to make sure that the Renewable Fuel Standard program is actually moving towards the levels that Congress intended.’ We are hopeful that the EPA will follow through on their commitment, releasing a rule that reflects this and eliminates the possibility of any distribution waivers.”

We appreciate the steadfast commitment of these senators to ensure the RFS is enacted as originally envisioned and encourage the EPA to heed the recommendations of these senators, to indeed get the RFS ‘back on track’ as the agency has promised.”

EPA, CFTC to Share RFS& RIN Data, Analysis

The U.S. Commodity Futures Trading Commission along with the Environmental Protection Agency (EPA) have entered into a Memorandum of Understanding that allows the agencies to share data and analysis on the Renewable Fuel Standard (RFS). As part of the deal, the agencies will cooperate and coordinate on topics relevant to the RFS and the market for Renewable Identification Numbers (RINS).

CFTC logoMore specifically, the MOU states, with the partnership the Commission can, “advise EPA on techniques that could be employed to minimize fraud, market abuses or other violations, and to conduct appropriate oversight in RIN and renewable fuels markets to aid EPA in successfully fulfilling the EPA’s statutory functions…” Sharing of the information will “…increase the CFTC’s understanding of the operation of and participants in those markets.” CFTC is an independent federal agency that regulates U.S. futures and options markets.

In response to the news, the Renewable Fuels Association (RFA), RFA President and CEO Bob Dinneen stated, “We are encouraged to see that EPA is coordinating and cooperating with CFTC to identify methods for improving the transparency and efficiency of the RIN market. For several years, RFA, members of Congress, and other stakeholders with an interest in the success of the RFS have been requesting that EPA coordinate with CFTC to take steps to prevent manipulation and increase transparency in the RIN market. Through this agreement, we believe CFTC will provide valuable expertise and insight that will improve the functionality and clarity of the RIN system for all market participants and the public.”

House Hearing Attacks #RFS

The House Oversight Subcommittees on Interior and Healthcare, Benefits and Administrative Rules held a joint hearing Wednesday to ostensibly examine the Renewable Fuel Standard but was basically an attack on the law.

hearing-grundlerEPA Office of Transportation and Air Quality Director Chris Grundler provided testimony at the hearing and attempted to explain the purpose and intent of the RFS, including what the agency can and cannot do under the law, to obviously unfriendly lawmakers who used the forum to bring up every argument against renewable fuels, from food versus fuel to the blend wall. Grundler repeatedly noted that the job of the EPA was to implement the law as Congress intended. “Introducing new fuels into the marketplace, especially cellulosic biofuels, is not an easy task,” said Grundler. “But that is the challenge Congress took on with the RFS program and we are committed to implementing the program … as Congress intended.”

hearing-tynerPurdue economics professor Dr. Wally Tyner was the lone voice on the panel supporting the benefits of the RFS, calling it one of the “appropriate and effective ways to move our economy towards lower GHG emissions.”

No one from the U.S. biofuels industry was invited to testify, which was distressing to the ethanol industry. “Unfortunately, the committee has stacked the witness list with oil company apologists intent upon undermining public support for this important program,” said Renewable Fuels Association (RFA) president and CEO Bob Dinneen. “Why is the committee afraid to hear all sides of the debate?”

“Holding a hearing on the RFS without any biofuels stakeholders is unacceptable and defeats the very purpose of what this congressional committee is tasked to accomplish,” added Growth Energy CEO Tom Buis. “The lack of diversity of opinions on this panel exemplifies political theater designed to drive a false narrative and discredit the success of the RFS. Furthermore, one of the most vocal RFS critics on the witness list was a professor who has been funded by the American Petroleum Institute (API).” He was referring to John DeCicco, a research professor with the University of Michigan Energy Institute, who conducted an unfavorable study on the RFS last year funded by the American Petroleum Institute.

The subcommittees also heard anti-RFS testimony from ActionAid USA and The Heritage Foundation.