Biofuel organizations are hopeful that legislation introduced last week by Sens. Deb Fischer (R-NE) and Tammy Duckworth (D-IL) will help stem the tide of Small Refinery Exemptions that have caused demand destruction for both ethanol and biodiesel.
The RFS Integrity Act of 2019 aims to provide “more certainty for rural America by bringing transparency and predictability to EPA’s small refinery exemption process. The bill would require small refineries to petition for Renewable Fuel Standard (RFS) hardship exemptions by June 1st of each year. This change would ensure that EPA properly accounts for exempted gallons in the annual Renewable Volume Obligations it sets each November.”
Renewable Fuels Association (RFA) president and CEO Geoff Cooper praised the legislation introduced on the heels of President Trump’s visit to an Iowa ethanol plant to celebrate EPA’s final rule allowing year-round sales of E15. “Refiner exemptions have had a devastating impact on the ethanol industry, erasing 2.6 billion gallons of RFS demand over the past two years,” said Cooper. “Any additional small refiner exemptions granted by EPA would totally undermine the demand gains we expect to see from year-round E15, hitting the rural economy hard.”
“The uptick of waivers without reallocation as required by law also means the Congressional intent of the RFS is undermined,” added American Coalition for Ethanol (ACE) CEO Brian Jennings. “This legislation would help ensure EPA’s abuse of small refinery exemptions is put to a stop by requiring timely reallocation of any granted waiver and ensuring the statutory RFS volumes are enforced.”
The legislation would also require the Environmental Protection Agency (EPA) to properly account for exempted gallons in the annual Renewable Volume Obligations (RVOs) it sets each November.
“The legislation highlights the fact that EPA’s actions on small refinery exemptions is inconsistent with President Donald Trump’s support for the RFS,” said National Biodiesel Board Vice President of Federal Affairs Kurt Kovarik. “The exemptions handed out last year for 2015, 2016 and 2017 destroyed demand for more than 360 million gallons of biodiesel and renewable diesel.”
EPA’s retroactive exemptions for 2015, 2016, and 2017 reduced compliance with the RFS volumes for those years. NBB conservatively estimates the demand destruction at 364 million gallons of biomass-based diesel.