Ethanol Report 8-28-20

Cindy Zimmerman

As the presidential election nears, the ethanol industry is watching closely to see which candidate will be more supportive of the Renewable Fuel Standard.

As Democratic candidate Joe Biden released a strong statement of support for the industry this week, the Trump Administration’s Environmental Protection Agency continues to drag its feet on important decisions like the 2021 Renewable Volume Obligations and so-called gap year refinery waiver requests.

In this edition of the Ethanol Report, Renewable Fuels Association (RFA) president and CEO Geoff Cooper comments on what they would like to see EPA do before the election, as well as Brazilian ethanol tariffs, if Congress will pass another coronavirus relief package this year, and derecho damage.

Ethanol Report 8-28-20 (20:37)

The Ethanol Report is a podcast about the latest news and information in the ethanol industry that has been sponsored by the Renewable Fuels Association since 2008.

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Audio, EPA, Ethanol, Ethanol News, Ethanol Report, RFA, RFS

Senate Democrats’ Climate Plan Includes Renewable Fuels

Cindy Zimmerman

The Senate Democrats’ Special Committee on the Climate Crisis released a plan this week to achieve 100 percent global net-zero emissions no later than 2050, which includes proper implementation of the Renewable Fuel Standard (RFS).

According to the report, “If implemented properly, the RFS gives farmers revenue stability, allowing U.S. agriculture to play an important role in reducing U.S. oil usage and further supporting rural economies.”

In addition, the report suggests the potential for a federal Low Carbon Fuel Standard which “sets a maximum carbon intensity level for fuels that must be met each year, with the goal of increasing the range of commercially available low-carbon and renewable fuel alternatives.” Groundwork for that has already been set with a report released in January of this year “A Clean Fuels Policy for the Midwest,” developed by a broad coalition of biofuels and rural stakeholders.

“We are glad to see Senate Democrats recognize that renewable fuels like ethanol have an important part to play in our nation’s low-carbon future,” said Renewable Fuels Association President and CEO Geoff Cooper. “We are pleased to see the Committee acknowledge the role the Renewable Fuel Standard has already played in reducing emissions and we welcome the report’s discussion of a potential national Low Carbon Fuel Standard (LCFS). This report complements the House Select Committee’s recommendations in June, and it is clear that consensus is building around the need to further reduce GHG emissions from the transportation sector.”

“ACE has been laying the strategic groundwork necessary to leverage ethanol’s low carbon value in the market through new clean fuel policy solutions at the state and federal level,” said American Coalition for Ethanol (ACE) CEO Brian Jennings. “Our engagement with Congress led the House Select Committee on the Climate Crisis to include a page from our Midwest Clean Fuel Policy blueprint in its June 30 report by recommending Congress develop a technology-neutral LCFS that would provide meaningful economic benefits to farmers and biofuel producers.”

The senate report also endorses the value of carbon sequestration, noting that it can help sustainable farmers survive and thrive, and cites the important growth of bio-based products as smarter and healthier alternatives to those derived from fossil fuels – using corn ethanol as a prime example.

Read the full report

ACE, Ethanol, Ethanol News, RFA

EPA Working on 2021 RVO, Waiver Requests

Cindy Zimmerman

Environmental Protection Agency Administrator Andrew Wheeler says they are working to get the 2021 Renewable Volume Obligations “done as quickly as possible” and promises they will not be as late as the previous administration.

“I remember there in the Obama-Biden administration they were actually two years late on setting the RVOs,” said Wheeler during a press call on Wednesday. “So we certainly aren’t going to break their record.”

The current administration has met the deadline on time for the past three years but since EPA is supposed to release the final RVOs for the coming year at the end of November and they have yet to be proposed, that will not happen this year. Wheeler says they have a lot more data points to consider this year with the impact COVID restrictions have had on all parts of the industry.

In addition, Wheeler says EPA is also being very diligent in its review of retroactive small refinery waiver petitions, which now total 67 with some going back to 2011. “We have to weigh all the issues very carefully because there’s a lot of litigation around this issue,” said Wheeler. “So any decision we make will be litigated so we have to be very thorough in our reviews.”

Listen to Wheeler’s answers to reporters’ questions:
EPA Admin Andrew Wheeler (2:48)

The Renewable Fuels Association sent a letter to Wheeler this week asking him to immediately address a number of unresolved issues related to the Renewable Fuel Standard.

“By disregarding statutory deadlines, flouting court decisions, and failing to make timely decisions, the Environmental Protection Agency is undermining predictability and confidence in the renewable fuels market and abetting longtime opponents of the RFS who perpetually seek the destabilize the program,” wrote RFA President and CEO Geoff Cooper. “Consequently, I write today imploring EPA to swiftly resolve a litany of unsettled RFS matters in a manner that is consistent with both the purpose of the Clean Air Act and the spirit of President Trump’s commitments.”

RFA called on Wheeler to adopt the Tenth Circuit Court decision on small refinery exemptions nationwide and decide all 2019-20 SREs accordingly, deny all 67 pending retroactive refinery waiver petitions, publish the proposed rule for 2021 renewable volume obligations, and comply with the court order to restore gallons illegally waived from the 2016 RFS requirements.

Read the letter here.

Audio, EPA, Ethanol, Ethanol News, RFA, RFS

New Research Tool to Improve Ethanol Testing Data

Cindy Zimmerman

Future Fuel Strategies has published a new Fuel Blending Guide for Ethanol for researchers conducting fuel and emission testing.

“This guide presents a step by step approach to designing a comparative market fuel emission study. This should matter greatly to the affected industries, auto, oil, ethanol- because it is these studies that are being used to design fuel/emissions regulations that directly impact the industry,” said Future Fuel Strategies Principal Consultant Tammy Klein.

The guide on Identifying Sound Practices for Acquiring or Blending Fuels for Studies of Emissions Changes was commissioned by the Urban Air Initiative (UAI) due to the fact that the way test fuels are blended dictate emission results.

Urban Air’s Technical Director Steve Vander Griend found that if there was a standardized way test fuels were blended, a lot of studies would have very different outcomes. “Having a uniform approach to blending test fuels will mean we will get accurate results. This fuel blending guide encourages using test fuels that represent real-world fuels. By doing this, emissions testing will show that ethanol reduces toxic aromatics in gasoline, reducing tailpipe emissions and improving air quality,” said Vander Griend.

The Fuel Blending Guide is intended for researchers to use as an educational tool and for third party organizations like the Society of Automotive Engineers to consider when conducting peer review on fuel studies. It also provides the opportunity to look back at past studies and identify flaws within the fuel testing to ensure more accurate results in the future.

Ethanol, Ethanol News, Urban Air Initiative

Biden Attacks Trump on RFS Support

Cindy Zimmerman

Democratic president candidate Joe Biden released a statement this week attacking President Donald Trump over his record on renewable fuels.

“Instead of standing with those who till our land and sow our fields, we have a president who has sold out our farmers by undercutting the Renewable Fuel Standard with the granting of waivers to Big Oil,” said Biden in the statement. “Those waivers severely cut ethanol production, costing farmers income and ethanol plant workers their jobs. Now, President Trump refuses to announce the 2021 renewable fuel production levels until after the election, leaving farmers concerned of further cuts to production. The Renewable Fuel Standard marks our bond with our farmers and our commitment to a thriving rural economy.”

Biden added that his Administration “will promote and advance renewable energy, ethanol, and other biofuels to help rural America and our nation’s farmers, and will honor the critical role the renewable fuel industry plays in supporting the rural economy and the leadership role American agriculture will play in our fight against climate change.”

Biodiesel, biofuels, Ethanol, Ethanol News, politics, RFS

Biodiesel Ads Urge President to Reject “Gap” SRE Petitions

Cindy Zimmerman

The National Biodiesel Board has launched a radio advertising campaign in six Midwestern states, urging President Donald Trump to keep his promise on the Renewable Fuel Standard. The ads will run for two weeks in Iowa, Illinois, Kansas, Minnesota, Nebraska, and Wisconsin.

The 30-second ads say, “EPA is threatening to grant more big oil handouts this year that reduce biodiesel demand and take away another market for soybean farmers. Tell President Trump and Administrator Wheeler to reject oil refiner exemptions and keep their promise to farmers.”

Kurt Kovarik, NBB’s VP of Federal Affairs, states, “Over the past three years, EPA has handed out 85 small refinery exemptions that destroyed demand for more than a half-billion gallons of biodiesel and hundreds of millions of bushels of soybeans. Now, EPA is considering nearly 100 new exemption petitions, threatening to double the damage to the biodiesel industry and farmers. Last week, President Trump promised to speak directly to EPA about the pending exemption petitions. Biodiesel producers and soybean farmers are counting on him to keep that promise.”

The ads urge farmers, biodiesel producers, and others to visit NBB’s Fueling Action Center and send email messages directly to President Trump and EPA Administrator Andrew Wheeler, asking them to limit small refinery exemptions.

Listen to one of the ads here:
NBB RFS ad

Audio, Biodiesel, biofuels, EPA, NBB, RFS

Farmers and Ethanol Producers Defend Year Round E15

Cindy Zimmerman

Ethanol producers and corn growers have provided support against the oil industry’s latest effort to undermine the expansion of E15 (gasoline containing 15% ethanol).

The Renewable Fuels Association, Growth Energy and National Corn Growers Association on Friday filed a brief in the U.S. Court of Appeals for the D.C. Circuit supporting and defending EPA’s 2019 regulation allowing year-round availability of E15.

As intervenors in the oil industry’s lawsuit against EPA’s regulation allowing year-round E15, RFA, Growth Energy and NCGA are vigorously protecting the agency’s final rule, which finally extended the Reid Vapor Pressure (RVP) volatility waiver for E10 blends to E15 as well. The intervenors’ brief provides strong support for EPA’s position that parity in RVP regulations for E10 and E15 is consistent with the provisions of the Clean Air Act and the congressional intent behind those provisions. The organizations further point out that extending the volatility waiver from E10 to E15 is appropriate because the volatility of the fuel actually decreases as more ethanol is added into gasoline beyond E10.

“This disparate treatment of E10 and E15 made little sense,” the intervenors argue. “The volatility restrictions are intended to limit evaporative emissions, and the 1-psi allowance promotes the sale of ethanol-blended fuels. Yet adding 5% more ethanol to E10 uses more ethanol and lowers volatility and evaporative emissions. … The Final Rule removes a volatility restriction for E15 that EPA long ago removed for E10—enhancing consumer choice while reducing volatility and evaporative emissions. This Court should not allow the petroleum industry and its allies to stymie competition in this comparatively small but important portion of the U.S. transportation fuel supply.”

Read complete intervenor filing.

corn, EPA, Ethanol, Ethanol News, NCGA, RFA

Iowa Governor Allocates $100 Million for Agriculture Relief

Cindy Zimmerman

Iowa Gov. Kim Reynolds has allocated approximately $100 million of federal CARES Act relief funds for a range of agricultural programs to offset the impact of COVID-19 on farmers, producers and agricultural industries.

“Iowa is at the foundation of our global food supply chain and the epicenter of the renewable fuels industry,” said Gov. Reynolds. “COVID-19 and a devastating derecho dealt a major blow to everything from the demand for ethanol to the supply of meat on grocery store shelves. But just as important are the livelihoods of thousands of Iowa farm families, agricultural industries and the communities they support. Today’s investment reflects the critical role Iowa’s ag industry has in our state’s overall economic recovery.”

For renewable fuel producers, $15.5 million will go to the State Biofuel Grant Program. Since biofuels producers were excluded from receiving aid under other parts of the CARES Act, this program will provide relief to those Iowa ethanol and biodiesel producers based on gallons produced. Grants will also be awarded through an existing small business relief program and are capped at a maximum grant of $750,000 per producer.

In addition, $7 million is being allocated to the Renewable Fuel Retail Recovery Program. Announced previously, this funding supports a program that helps expand retail fueling infrastructure for higher blend renewable fuels, including E15 or higher & B11 or higher.

“Governor Reynolds has provided a much-needed lifeline for Iowa’s renewable fuels producers,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “At its peak, the COVID-19 pandemic led to the idling of roughly 50 percent of Iowa’s biofuels production capacity. Even today fuel use has not returned to normal and biofuels producers are struggling to simply breakeven. IRFA members from across the state are deeply grateful for Governor Reynold’s leadership as they work to recover from the financial blow wrought by the pandemic.”

Biodiesel, biofuels, Ethanol, Ethanol News, Iowa RFA

Nebraska Ethanol Industry to Benefit from Tax Reform

Cindy Zimmerman

Gov. Ricketts and Nebraska Renewable Fuels Executive Director Troy Bredenkamp

The Nebraska Ethanol Board and Renewable Fuels Nebraska were pleased last week to take part in Governor Pete Ricketts’ final approval of state legislation that will provide benefits for the struggling industry.

Dubbed the great compromise, LB 1107 combined many of the business incentives of LB 720, otherwise known as the ImagiNE Act, with elements of property tax reform for all property owners including ethanol facilities. Critical to the ethanol industry were business tax incentives targeted toward renewable chemical operations which utilize ethanol and byproducts of the ethanol production process to create chemicals that are renewable-based.

Other elements of LB 1107 will allow for tax credits based on future investments and job creation and potentially substantial property tax relief for ethanol facilities, according to Troy Bredenkamp, Executive Director for Renewable Fuels Nebraska. “Ethanol producers have been through some challenging times lately,” said Bredenkamp. “As ethanol producers look to retool and reinvest in their plants, business incentives and property tax relief will influence future investments and upgrades in the Nebraska plant fleet.”

Both the Nebraska Ethanol Board and Renewable Fuels Nebraska now turn their attention to LR 373, which will be the first comprehensive study of state policy impacting Nebraska’s ethanol in many years. Several policy-related issues will be researched and assessed with potential legislation during next year’s session to address policy impediments to Nebraska’s ethanol industry. “As the state agency representing the ethanol industry, we look forward to assisting the Nebraska Legislation with this study process,” said Roger Berry, Administrator of the Nebraska Ethanol Board. “Ethanol and biofuel production is as important as ever as we take a serious look at air pollution and its harrowing effects on public health, especially those experiencing respiratory issues.”

Ethanol, Ethanol News

EPA Small Refinery Waiver Requests Nearing 100

Cindy Zimmerman

The Environmental Protection Agency now has 98 requests for RFS Small Refinery Exemptions parked in its online dashboard for consideration.

The agency has received another nine new small refinery exemption requests for previous years, along with three new current waiver petitions for 2019-2020. The prior year petitions include one each for 2011 and 2012, two each for the years 2013 through 2015, and a new one for 2016. That brings the total requests for so-called “gap year” waivers to 67 – all of which have been filed since the 10th Circuit Court decision in January which struck down a set of waivers granted because they were not direct extensions of ones previously granted, as required by law.

Renewable Fuels Association (RFA) president and CEO Geoff Cooper says it is past time for President Trump to intervene. “As more and more waiver requests pile up, we are again asking the President to ensure EPA immediately adopts the recent Tenth Circuit court decision nationwide and rejects these nonsensical gap-year petitions, Cooper said. “The Saudi-Russia oil price war, COVID pandemic, ongoing trade war, and now a historic derecho have already taken a devastating toll on our markets, and faithful enforcement of the Renewable Fuel Standard is more important now than ever before.”

“This week in Iowa, President Trump promised to personally speak with EPA about these absurd gap-year waivers and the impact they are having on ethanol producers and the farm economy. That conversation can’t happen soon enough, as pending petitions are now closing in on the century mark,” said Cooper.

It was during a briefing in Iowa on Tuesday that Sen. Joni Ernst asked President Trump to talk with EPA about the issue and request they follow the intent of the law with the Renewable Fuel Standard. “We’ll speak to them,” said the president. “I’ll do it myself.”

EPA, Ethanol, Ethanol News, RFA, RFS