EPA Proposes Volume Standards and Waiver Rejections

Cindy Zimmerman

The Environmental Protection Agency (EPA) today proposed a package of actions setting biofuels volumes for years 2022, 2021, and 2020, and introducing regulatory changes intended to enhance the program’s objectives. In addition, EPA is seeking public comment on a proposed decision to deny petitions to exempt small refineries from their obligations under the RFS on the grounds that petitioners failed to show that EPA has a basis under the Clean Air Act (CAA) and recent federal case law to approve them.

For 2022, EPA is proposing the highest total volumes in history, putting the program on a stable trajectory that provides for significant growth. The proposed volumes for 2022 are over 3.5 billion gallons higher than the volume of renewable fuel used in 2020. The proposed volume of advanced biofuel for 2022 is over 1 billion gallons greater than the volume used in 2020. EPA is also proposing to add a 250-million-gallon “supplemental obligation” to the volumes proposed for 2022 and stating its intent to add another 250 million gallons in 2023. This would address the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA. Spreading this obligation over two years would provide the market time to respond to this supplemental obligation. The last Administration failed to act on the Agency’s outstanding obligation to address the court’s remand.

Industry reaction to the proposal is mixed, with objections to retroactively reducing previously finalized 2020 Renewable Fuel Standards (RFS) requirements. The Renewable Fuels Association called the package “a modest step in the right direction for the nation’s ethanol producers and farmers.”

Specifically, RFA welcomes EPA’s proposal to set the 2022 RFS conventional renewable fuel requirement at the statutory volume of 15 billion gallons (bg) and its move to deny all pending small refinery exemption (SRE) petitions based on the unappealed holdings of the Tenth Circuit Court’s decision in the Renewable Fuels Association et al. v. EPA. The agency also said it will follow the Court’s ruling when it considers future SRE petitions. EPA’s proposal to restore 500 million gallons of illegally waived RFS requirements from 2016 —with that volume being added in the form of supplemental requirements to the 2022 and 2023 RFS requirements—also drew praise from RFA.

Biodiesel, biofuels, Cellulosic, EPA, Ethanol, Ethanol News, Renewable Fuels Association, RFA, RFS

USDA Releases COVID Aid for Biofuels Producers

Cindy Zimmerman

Agriculture Secretary Tom Vilsack made good on the promise he made Friday and announced today that USDA will make up to $800 million available to support biofuel producers and infrastructure.

Today’s announcement includes $700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the pandemic. The Department will make the funds available through the new Biofuel Producer Program authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Additionally, in the coming months, the Department will make $100 million available to increase significantly the sales and use of higher blends of bioethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products. The Biden-Harris Administration is committed to further growth of the biofuels industry, and the House-passed Build Back Better Act commits additional funding that will provide better market access for farmers and more affordable and cleaner fuels for consumers.

“At the peak of the pandemic, more than half of our nation’s ethanol capacity was idled. To this day, many plants remain offline or are operating at reduced output rates and the pandemic has cost the industry well over $5 billion in lost revenue. We are grateful to USDA Sec. Vilsack and the Biden administration for finalizing this relief package to help our industry recover, as well as the additional infrastructure funding,” said Renewable Fuels Association (RFA) President and CEO Geoff Cooper.

The announcement came in conjunction today with the Environmental Protection Agency (EPA) proposing a package of actions setting biofuels volumes for years 2022, 2021, and 2020, and introducing regulatory changes intended to enhance the program’s objectives. In addition, EPA is asking for public comment on a proposed decision to deny petitions to exempt small refineries from RFS program requirements.

Ethanol, Ethanol News, USDA

Renewable Fuels in the Economic Outlook at #ASTACSS

Cindy Zimmerman

AgResource Company president Dan Basse was back in person with his annual update on the global agricultural market at the 2021 ASTA CSS & Seed Expo on Tuesday.

This is the ninth year Basse has presented at the event and, as always, he packed a lot of information into an hour. Among the trends he noted for the coming year – a commodity “super cycle” and peak farmland; the role of farming and biofuels in carbon reduction; hog hotels in China and renewable diesel driving demand for corn and soy; and skyrocketing food prices.

Basse sees rising demand for renewable diesel as especially disruptive for the agriculture industry. “The problem we have in every bushel of soybeans as you put it through processor you get 47 and a half pounds of soybean meal and 11.6 pounds of bean oil,” said Basse. “I need more bean oil. If U.S. seed breeders could give me more bean oil, you’re going to have a very glorified future.”

Listen to an interview with Basse, as well as some of his insights from the presentation:
ASTACSS - Interview with Dan Basse, AgResource (6:44)

ASTACSS - Dan Basse, AgResource, trends overview (5:34)

ASTACSS - Dan Basse, AgResource, China hog hotels and renewable diesel (8:16)

Audio, aviation biofuels, Biodiesel, Carbon, corn, Ethanol, Ethanol News

RFA Mourns Sen. Dole as Ethanol Champion

Cindy Zimmerman

Bob Dole at the 2008 World Food Prize

The Renewable Fuels Association paid tribute to former Sen. Robert Dole (R-KS), who passed away Sunday at the age of 98, as a great patriot, war hero, national statesman, friend of farmers, and a champion of America’s renewable fuels industry.

“Throughout his distinguished career in public service, Senator Dole always put his country first and worked tirelessly to improve the lives of all Americans,” said RFA President and CEO Geoff Cooper. “He was one of the first elected officials in Congress to vocally champion ethanol as a value-added market opportunity for America’s farmers.”

Cooper notes that Sen. Dole worked across the aisle in the 1990s with Democratic Leader Tom Daschle to push legislation that ultimately resulted in the successful passage several years later of the Renewable Fuel Standard. Dole and Daschle would also go on to found the Bipartisan Policy Center, which focused on fostering bipartisanship and bridging political divides.

In 2008, Dole was honored with the World Food Prize, along with the late Democrat Sen. George McGovern, for their work in creating the McGovern-Dole international school feeding program.

Both of the senators took questions from the media at the World Food Prize on a variety of topics, including the production of biofuels, since food versus fuel was a trending topic and the 2008 presidential election was just weeks away.

Dole noted the importance of new energy sources in the election that year and the issues that the ethanol industry was facing and stressed the all of the above approach to energy. “There’s switchgrass and other biofuels, and there’s nuclear energy and drilling off-shore,” Dole said. “We gotta do everything we can, it’s not all going to be ethanol.”

Listen to McGovern and Dole comment on food versus fuel in 2008:
2008 World Food Prize press conf - biofuels

Audio, Ethanol, Ethanol News, food and fuel, politics, Renewable Fuels Association, RFA

EPA Holds Hearing on Proposed RFS Compliance Deadlines

Cindy Zimmerman

Biofuels groups had the opportunity to sound off to the Environmental Protection Agency (EPA) on its proposed extension of Renewable Fuel Standard (RFS) compliance deadlines during a virtual hearing Friday.

The Renewable Fuels Association voiced strong opposition to again delay annual RFS compliance deadlines. “EPA has had ample time to decide pending 2019 and 2020 SRE petitions following the Supreme Court’s June 2021 decision in the HollyFrontier v. RFA case, which left intact two important holdings from the Tenth Circuit Court’s January 2020 decision in the RFA v. EPA case,” said RFA President and CEO Geoff Cooper in prepared testimony. “We strongly encourage EPA to immediately decide the remaining 2019 and 2020 SRE petitions in a manner consistent with the unappealed holdings of the Tenth Circuit decision. And immediately upon deciding those petitions, EPA should require compliance with the final 2019 and 2020 standards.”

American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty pointed out that if EPA would have finalized the 2021 Renewable Volume Obligations (RVOs) on time last November and predicted gas volumes would return to 2019 levels, the 2021 percentage would have assured refiners their renewable fuel requirements would again fall or rise as petroleum volumes remained flat or grew.

“Instead, the reason EPA has to propose delaying compliance reporting and attest engagements for 2021 and 2022 is EPA’s own failure to establish annual Renewable Volume Obligations when they are supposed to be established,” Lamberty said in his testimony.

EPA argues that the compliance deadline extensions are necessary because dozens of 2019 and 2020 small refinery exemption petitions have not yet been decided, and proposed standards for 2021 have not yet been published.

ACE, EPA, Ethanol, Ethanol News, RFA

Vilsack Expects RVOs and COVID Payments Soon

Cindy Zimmerman

USDA Secretary Tom Vilsack was in Pennsylvania Friday to announce $633 million in investments to reduce the impacts of climate change on rural communities.

Vilsack highlighted 791 investments that USDA is making in five programs specifically designed to help people and businesses in rural areas, including the Higher Blends Infrastructure Incentive Program.

Vilsack also answered questions from reporters, several focused on the biofuels sector and delayed action from the Environmental Protection Agency on Renewable Fuel Standard obligations, as well as COVID aid for producers. “I fully expect in the very near future EPA will announce those standards,” said Vilsack. Regarding the COVID assistance, Vilsack indicated that was tied to the RFS obligations. “We look forward, when those announcements are made, to also be able to provide more details on the distribution of 700 million dollars of assistance and help that we have already identified for the biofuel industry.”

While Vilsack made much the same prediction for COVID aid back in September, he reiterated that the holdup is coming from the Office of Management and Budget, which must approve the payments. “Sometimes it can be a bit frustrating to negotiate with our friends at OMB but that is the process and we have to follow that process,” he said.

USDA Sec. Vilsack presser 12-3-21 (19:27)

Audio, Biodiesel, biofuels, Ethanol, Ethanol News, USDA

ACE Participates in OPIS LCFS and Carbon Markets Workshop

Cindy Zimmerman

American Coalition for Ethanol (ACE) consultant Jonathon Lehman was on a panel entitled “Reducing Carbon Intensity in Renewable Fuels with Climate Smart Farming Practices” with representatives from Gevo and the American Society of Agronomy at the OPIS LCFS and Carbon Markets Workshop this week in California.

“USDA estimates U.S. farmers currently store 20 million metric tons of carbon per year and could store an additional 180 million metric tons annually, representing 12 to 14 percent of U.S. carbon emissions through the adoption of conservation practices,” Lehman said. “Despite this potential, state and federal low carbon fuel programs do not count on-farm carbon benefits toward greenhouse gas emissions reduction targets.”

“Regulators, such as those in California’s LCFS program, do not yet credit GHG reductions achieved through carbon sequestering conservation practices in ethanol feedstock production, in part, because they want better, localized quantification, verification and modeling protocols to grant access to these markets,” Lehman added. “The ACE-led RCPP project will provide a prototype for how clean fuel policies can reward farmers for climate-smart practices that reduce the overall carbon intensity of corn ethanol, while also serving as a practical application to gain regulators’ acceptance and build farmer interest by demonstrating the economic value of clean fuel policies.”

Lehman’s company Cultivating Conservation helps leverage USDA conservation programs to address critical environmental challenges to benefit farmers and natural resources and is an expert in the ACE-led Regional Conservation Partnership Program (RCPP) project.

ACE, Carbon, Ethanol, Ethanol News

Membership News from RFA

Cindy Zimmerman

The Renewable Fuels Association has announced the selection of Mark Gouthro to lead the association’s Technical Committee. Gouthro has worked as lab manager at E Energy Adams in Nebraska since 2016.

The Technical Committee is one of RFA’s four member committees on important ethanol industry topics, and focuses heavily on fuel specifications and standards such as ASTM International, National Conference of Weights and Measures, ISO, Canadian General Standards Board, and other international fuel requirements. RFA’s three other committees focus on Co-Products, New Uses, and Environmental Health & Safety. Participation in committees is an exclusive RFA member benefit.

Speaking of RFA members, the organization gained two new ones this week.

Heron Lake BioEnergy has joined RFA as its newest producer member. The Minnesota-based biorefinery produces approximately 59 million gallons annually, using about 21 million bushels of corn. The facility was recently acquired by Granite Falls Energy, and CEO Jeff Oestmann will represent both plants on the RFA Board of Directors.

RFA also welcomed StepOne Tech America as its newest associate member. Founded 10 years ago in Finland, the company develops and sells eFlexFuel E85 flex fuel conversion kits for the US market.

Ethanol, Ethanol News, Renewable Fuels Association, RFA

MN Ag Commissioner Visits Granite Falls Energy

Cindy Zimmerman

Minnesota Agriculture Commissioner Thom Petersen, front left, visits Granite Falls Energy

Minnesota Department of Agriculture Commissioner Thom Petersen visited the Granite Falls Energy plant last week to gain a better understanding of the ethanol industry’s efforts in lowering its carbon footprint and its role in helping the state achieve its emission reduction goals.

“Our industry plays a vital role in strengthening Minnesota’s economy and reducing harmful greenhouse gas emissions. During the commissioners tour of our plant, we briefed him on our efforts to achieving a net-zero carbon footprint, providing high-tech jobs and continuing our commitment to Minnesota’s agriculture industry,” said Jeff Oestmann, CEO of Granite Falls Energy.

He said Peterson was briefed on measures that can be taken to increase ethanol usage in Minnesota such as utilizing federal funding to increase biofuel infrastructure, require state fleet vehicles to use E15 or E85 (in the case of flex-fuel vehicles) and advance a clean fuel standard that would provide ethanol with a proper carbon credit using the GREET model.

Additionally, Oestmann said the commissioner was briefed on some of the challenges facing Minnesota’s ethanol industry such as a potential reid vapor pressure (RVP) ban on E15 in the summer months of 2022.

Granite Falls Energy began operations in 2005 and currently produces 70 million gallons of ethanol a year.

Ethanol, Ethanol News

Sen. Grassley Sounds Off on RFS Deadline

Cindy Zimmerman

Yesterday, November 30th, was the deadline for the Environmental Protection Agency to release blending obligations for the coming year under the Renewable Fuel Standard (RFS) and Sen. Chuck Grassley (R-IA) says missing it is bad news for the biofuels industry.

“The fact that this deadline is being missed is very unfortunate for farmers and biofuel producers because they’re facing uncertainty at the volume levels that have not even been proposed,” said Grassley during opening remarks of his regular weekly press call with agricultural reporters on Tuesday. “Even worse are the reports that EPA is planning to lower these RFS requirements, which would very much weaken the incentive to produce and blend biofuels.”

Last week, Sen. Grassley sent a letter urging President Biden to support his bipartisan No Oil Producing and Exporting Cartels (NOPEC) Act to hold the foreign oil producing cartel accountable for its anticompetitive behavior that elevates global oil prices.

Listen to some of Sen. Grassley’s comments here:
Sen. Grassley comments on late RVOs (7:11)

Audio, Biodiesel, biofuels, Ethanol, Ethanol News