Ethanol Report on EPA E15 Waiver

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The emergency fuel waiver issued by the Environmental Protection Agency to allow sales of E15 this summer will help American consumers save money at the pump, while also cutting greenhouse gas emissions and harmful tailpipe pollution, but the Renewable Fuels Association says a permanent legislative solution is still necessary. The emergency waiver issued Friday follows a concerted effort by RFA and its allies and will make the sixth year that some type of EPA action has allowed sales of 15% ethanol fuel in conventional gasoline areas during the summer.

In this edition of The Ethanol Report, RFA Senior VP for Government & Public Affairs Troy Bredenkamp and Chief Economist Scott Richman discuss the E15 waiver and why it was necessary, and why the Nationwide Consumer and Fuel Retailer Choice Act of 2023 is more important than ever.

Ethanol Report 4-19-24 28:13

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Ethanol Industry Pleased EPA Issues Summer E15 Waiver

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The Environmental Protection Agency today issued a waiver to allow E15 (15 percent ethanol fuel) to continue to be sold this summer. The temporary waiver under the Clean Air Act was issued “to address extreme and unusual fuel supply circumstances caused by a confluence of events, including the ongoing war in Ukraine and conflict in the Middle East, that are affecting all regions of the Nation.”

Ethanol organizations and stakeholders welcomed the action, which the Renewable Fuels Association says will help American consumers save money at the pump this summer, while also cutting greenhouse gas emissions and harmful tailpipe pollution. However, RFA Senior VP for Government & Public Affairs Troy Bredenkamp says the ultimate goal is to find a permanent solution to allow E15 sales in the summer. “We are certainly seeking some sort of legislative solution to solve this long term so we don’t have to keep begging and pleading to make sure that E15 does not disappear during the summer.”

RFA Summer E15 waiver reaction - Troy Bredenkamp (2:51)

American Coalition for Ethanol (ACE) CEO Brian Jennings said he was grateful to see the administration respond to the industry’s requests. “Earlier this year, the Biden administration finally confirmed E15 can permanently be offered in eight Midwest states, but postponed year-round access in those states until the summer of 2025. Today’s action is an important reminder that higher ethanol blends play a critical part in our nation’s energy security as well as contribute significant climate and air quality benefits. A permanent solution to year-round E15 will ensure these benefits aren’t left to the whim of ad hoc agency decision making in the future.”

Both ACE and RFA support the bipartisan Nationwide Consumer and Fuel Retailer Choice Act (S. 2707) sponsored by Sen. Deb Fischer (R-NE) to ensure continuous access to E15 nationwide.

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USTR Working on Brazil Market Access for U.S. Ethanol

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During a Senate Finance Committee hearing this week, Sen. Chuck Grassley (R-IA) asked U.S. Trade Representative (USTR) Ambassador Katherine Tai about the Biden administration’s “abdication of leadership on trade” and urged her to work on getting Brazil to lower tariffs on U.S. ethanol.

“The last time you appeared before this committee I urged you to negotiate lower tariffs on ethanol with Brazil,” said Grassley. “While I understand you are currently negotiating this matter, the results have been lackluster. Brazil increased its duties on ethanol this year from 16 to 18 percent and continues to enjoy importing its ethanol tariff-free. This ethanol competes with home grown ethanol in California’s low-carbon fuel standard, but also in sustainable aviation fuel.”

Tai said USTR coordinating with USDA and engaging with their counterparts in Brazil on market access barriers to U.S. ethanol. “Our objective is to ensure U.S. ethanol can, once again, compete on a level playing field with domestically produced ethanol in Brazil,” she said.

Senate Finance hearing Grassley-Tai (1:55)

Last week, the U.S. ethanol industry submitted comments within the Brazilian Chamber of Foreign Trade (CAMEX) urging the agency to “strongly consider the permanent reinstatement of the duty-free access for ethanol as a window of opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States.”

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Year-Round E15 Act Introduced in House

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Rep. Zach Nunn (IA-R)

The Year-Round E15 Act was introduced this week in the U.S. House by Rep. Zach Nunn (R-IA) together with colleagues Adrian Smith (R-NE), Nikki Budzinski (D-IL), Brad Finstad (R-MN), Eric Sorensen (D-IL), and Don Bacon (R-NE). The legislation would allow for retail sales of E15 this summer across eight Midwestern states which EPA has approved for the Reid Vapor Pressure (RVP) volatility waiver starting in 2025.

“This bill wouldn’t be necessary if the Administration had just done the right thing to begin with, but this is a critical step to provide certainty for farmers, producers, and families who will benefit from less expensive fuel,” said Rep. Nunn.

“I was glad to see the Environmental Protection Agency take evidence-based action to allow the permanent sale of E15 in Illinois and across the Midwest, but this long-awaited action doesn’t take effect until 2025,” said Rep. Budzinski. “I’m proud to introduce bipartisan legislation with my friend, Congressman Zach Nunn, that will address this gap and allow for the sale of cheaper, cleaner fuel for Heartland consumers this summer.”

“The ethanol industry greatly appreciates Representative Nunn’s efforts to ensure Midwest drivers have continued access to lower-cost, cleaner-burning E15 this summer driving season,” said Renewable Fuels Association President and CEO Geoff Cooper.

The bipartisan Year-Round E15 Act would allow for the year-round sale of E15 in Iowa, Illinois, Missouri, Minnesota, Nebraska, Ohio, South Dakota, and Wisconsin for the summer of 2024.

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Iowa Ag Secretary Urges EPA to Approve Summer E15

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Iowa Secretary of Agriculture Mike Naig this week sent a letter to Environmental Protection Agency (EPA) Administrator Michael Regan urging him to immediately sign an “emergency waiver” to allow summer sales of E15 (15% ethanol fuel) this year.

In February, the EPA approved a request by Governor Reynolds and seven other Midwest governors to allow the sale of E15 fuel year-round beginning in 2025. While the news was generally welcomed, the decision was more than a year late as required by law, Attorney General Brenna Bird had to file a lawsuit to force EPA to act, and the rule inexplicably did not apply to 2024.

Now, as the summer driving season quickly approaches, everyone from drivers to gas station owners are stuck in a state of limbo awaiting news if an “emergency waiver” will be put in place for this summer.

“With the summer driving season just weeks away, the Biden Administration must take immediate action to ensure that Iowa drivers do not lose access to lower cost E15,” said Secretary Naig. “At a time when inflation is running hot, oil prices are rising and global events are producing turmoil, year-round E15 would provide significant savings to consumers, help America be more energy independent and reduce emissions.”

Read the full letter to EPA Administrator Michael Regan.

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U.S.-Japan Alliance Includes Ethanol as Carbon Reducer

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President Biden and Japan Prime Minister Kishida

President Joe Biden and Japanese Prime Minister Fumio Kishida last week announced several new strategic initiatives to further advance the U.S.-Japan Alliance, including the importance of ethanol as a decarbonization solution within the transportation sector.

A Joint Leaders’ Statement issued by the White House stated, “We intend to advance widespread adoption of innovative new clean energy technologies, and seek to increase the globally available supply of sustainable aviation fuel or feedstock, including those that are ethanol-based, that show promise in reducing emissions.”

The U.S. ethanol industry, including the Renewable Fuels Association, U.S. Grains Council (USGC) and Growth Energy, expressed appreciation for the words of support and the work of government agencies advocating for grain-based ethanol in their international discussions.

“We thank the Biden Administration for its ongoing assistance in promoting U.S. ethanol abroad. Through our continued joint efforts to showcase U.S. ethanol benefits to the global community, we are collectively leading the transition to a low-carbon economy and supporting international climate commitments for a net-zero future.”

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RFA Concerned About Loss of USDA Reports

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The Renewable Fuels Association (RFA) is urging USDA’s National Agricultural Statistics Service (NASS) to reconsider its plan announced last week to discontinue all County Estimates for Crops and Livestock beginning with the 2024 production year.

“With the rapid emergence of state and federal climate policies that will compel ethanol producers to carefully track certain feedstock characteristics, the availability of robust county-level data has never been more important,” said RFA President and CEO Geoff Cooper in a letter to NASS Acting Administrator Joseph Parsons.

In particular, with several federal agencies working to develop a version of the GREET life cycle analysis model that will be used to estimate sustainable aviation fuel emissions, the availability of granular, county-level data is crucial. Cooper writes, “It is anticipated that climate-smart farming practices will be recognized in this version of GREET. Moreover, some expect that county-level, or even farm-specific, carbon intensity scoring could be allowed under the IRA tax credit programs at some point in the future. For the USDA to discontinue reporting of high-resolution, annual crop yield data at a time when those data are needed for incorporation into the GREET model array and/or for use in the verification of farm-specific estimates would be regrettable.”

“NASS data will be relied upon in new and important ways as climate-smart farming practices are adopted,” said Cooper.

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More Voices Push for Summer E15 Waivers

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This week, 46 members of Congress and 15 Iowa fuel retailers added their voices to those urging the Biden administration to issue waivers to permit the sale of E15 for the 2024 summer driving season.

Representative Dusty Johnson (R-SD) and two dozen other members of the U.S. House sent a letter calling on President Biden to direct EPA to allow the sale of E15 fuel during the summer months (June 1-September 15, 2024). While the year-round sale of E15 will be permissible in some states beginning in 2025, it will still be prohibited this year beginning on June 1, unless EPA takes action.

On the Senate side, John Thune (R-SD) and Dick Durbin (D-IL) led an effort that included 18 other colleagues in a similar letter sent to the president.

“We thank these lawmakers, working across the aisle in both the House and Senate, for calling on the Biden administration to quickly take action to allow the nationwide sale of E15 through the coming summer,” said Renewable Fuels Association President and CEO Geoff Cooper. “These senators and representatives understand that, with current fuel supplies lower than the last two summer driving seasons and the market pressures of ongoing geopolitical conflicts, it is imperative that consumers have access to this American-made supply of lower-cost, cleaner fuel.”

Meanwhile, 15 Iowa retailers sent their own letter to President Biden asking for the summer waivers.

“Now more than ever, we want to keep selling E15, and our customers want to keep buying E15 to save money. While we support the solution for 2025 and beyond, we are encouraging the administration to use its waiver authority to permit the sale of E15 fuel for the 2024 summer driving season and extend the Reid Vapor Pressure (RVP) waiver from June 1 through September 15,” stated the letter.

The retailers who signed the letter were: Maverick/Kum & Go, Growmark FS, New Century FS, New Cooperative, Five Star Cooperative, Sundstop LLC, Zubs Shop, Cresco Fast Stop, Cubby’s, RocStop, RAM Inc., The Corner Store, Linn Coop Oil Co., Thomson’s Filling Station, and Farmers Mutual Town & Country.

Nearly 1,000 farmers and ethanol industry workers signed a letter last week to President Biden also urging immediate action on E15.

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WASDE Increases Corn for Ethanol Use

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USDA’s April World Agricultural Supply and Demand Estimates (WASDE) released Thursday forecasts greater corn used for ethanol and feed and residual use and smaller ending stocks.

Corn used for ethanol is raised 25 million bushels to 5.4 billion based on data through February from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of March. Feed and residual use is increased 25 million to 5.7 billion based on indicated disappearance.

U.S. corn exports remain unchanged at 2.1 billion bushels. Global coarse grain production for 2023/24 is forecast 2.3 million metric tons lower to 1,505 million with declines in production, trade, and ending stocks. Foreign corn production is forecast lower as cuts for South Africa, Argentina, Mexico, and Moldova are partially offset by increases for the EU and the Philippines.

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Grassley Hearing GREET Model Update Rumors

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Iowa Sen. Chuck Grassley is unhappy with what he has been hearing about the GREET model updates for sustainable aviation fuel expected soon from the Biden Administration.

“We understand that this model might say that you can use (corn as a) feedstock but it will have to be grown in one of three conditions – minimum tillage, cover crops, or these new corn planters where you have very precise application of chemicals or fertilizer,” said Grassley in his weekly call with agricultural reporters on Tuesday.

The problem with that, he says, “we commingle our grain when it gets to the local elevator. And you can’t tell one kind of corn from another kind of corn” making it easy to violate the formula. As a result, Grassley says, one of two things will happen. “Either we get all of our corn into the formula or you’re not going to get any corn into the formula.”

Since USDA is one of the agencies involved in the GREET model updates, Grassley said he hopes they make it “very clear to the other three departments that are involved in this decision making, because this is a stupid approach. From the standpoint of both the need for new aviation fuel to fight global warming and the ability to produce that amount of fuel is going to be impeded.”

Listen to Grassley’s comments below:
Sen. Grassley press call 4-9-24 16:58

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