Ethanol Report on 2020 RVO Proposal

Cindy Zimmerman

The Environmental Protection Agency on Friday issued proposed volume requirements under the Renewable Fuel Standard program for calendar year 2020, with a total renewable fuel volume of 20.04 billion gallons, of which 5.04 billion gallons are advanced biofuel, including 540 million gallons of cellulosic biofuel. That leaves the 15-billion-gallon requirement for conventional renewable fuels like corn ethanol unchanged from 2019.

Renewable Fuels Association (RFA) president and CEO Geoff Cooper says the proposal “completely betrays President Trump’s commitment” to uphold the integrity of the RFS by neglecting to prospectively reallocate small refinery exemptions and blatantly ignoring a court order to restore improperly waived gallons.

In this edition of The Ethanol Report podcast, Cooper explains why the industry is so dissatisfied with the proposal and how it undercuts President Trump’s support of ethanol.

Ethanol Report on 2020 RVO Proposal

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

NBB Highlights How Refinery Waivers Hurt Biodiesel Industry

Cindy Zimmerman

The National Biodiesel Board (NBB) has launched an ad campaign highlighting the economic damage to biodiesel and renewable diesel producers from the Environmental Protection Agency’s small refinery exemptions. The ads are currently scheduled to run for one week in Des Moines and Washington, DC.

“The president’s EPA is hurting farmers and eliminating jobs by giving special favors to big oil companies,” the ad states. “The EPA’s big oil bailout is destroying demand for biodiesel.”

An estimate from University of Illinois Professor Scott Irwin says the demand destruction could reach 2.45 billion gallons over the next few years causing a $7.7 billion economic loss for the biodiesel industry.

“Just one oil refinery waiver can put an entire biodiesel facility out of business, and that means fewer jobs for rural America,” the ad states.

NBB Vice President of Federal Affairs Kurt Kovarik notes that the biodiesel industry “does not benefit from approval of year-round E15 sales. While that approval was long overdue, it can’t make up for the damage from small refinery exemptions.” There are currently 38 more waiver applications pending at EPA.


Biodiesel, EPA, Ethanol, NBB, Video

Biofuels Groups Blast EPA for RFS Proposed Volumes

Cindy Zimmerman

The Environmental Protection Agency on Friday (EPA) issued proposed volume requirements under the Renewable Fuel Standard program for calendar year 2020, leaving them basically unchanged and not reallocating gallons lost due to small refinery exemptions.

Renewable Fuels Association (RFA) president and CEO Geoff Cooper says the proposal “completely betrays President Trump’s commitment” to uphold the integrity of the RFS by neglecting to prospectively reallocate small refinery exemptions and blatantly ignoring a court order to restore improperly waived gallons.

EPA has proposed a total renewable fuel volume of 20.04 billion gallons, of which 5.04 billion gallons are advanced biofuel, including 540 million gallons of cellulosic biofuel. That leaves, on paper, a 15-billion-gallon requirement for conventional renewable fuels like corn ethanol, unchanged from 2019.

Most notably, EPA failed to prospectively account for any expected small refinery exemptions in the 2020 proposal, even though it is almost a foregone conclusion at this point that the Agency will continue to grant more exemptions.

Cooper discusses the shortcomings of the proposal in this interview: RFA CEO Geoff Cooper interview on EPA RVO proposal

American Coalition for Ethanol (ACE) CEO Brian Jennings says the proposal “fails to restore a 500-million-gallon shortfall the D.C. Circuit Court ordered EPA to handle following the Americans for Clean Energy et al v. EPA lawsuit, which recently resigned EPA Assistant Administrator for Air and Radiation William Wehrum told ACE members EPA intended to address in the 2020 proposed rule at our D.C. fly-in in April.”

The National Biodiesel Board (NBB) criticized the proposed rule for both the 2020 advanced biofuel standards, which is 0.12 billion gallons higher than 2019, and 2021 Biomass-based Diesel Volume, saying it undermines market growth for biodiesel and renewable diesel.

The agency’s proposed advanced biofuel volume of 5.04 billion gallons provides no additional market growth for biomass-based diesel. Similarly, the proposal to set the 2021 biomass-based diesel volume at 2.43 billion gallons — the same as the 2020 volume — flatlines growth for the industry. EPA’s proposal could actually reduce market space for biodiesel and renewable diesel compared to this year, because it does not account for small refinery exemptions.

Lynn Chrisp, President of the National Corn Growers Association (NCGA), said. “If the EPA continues to grant retroactive waivers, the RVO numbers are meaningless and the EPA is not following the law. Farmers are facing a very tough economic environment and the continued waiver abuse chips away at farmers’ bottom line.”

EPA Administrator Andrew Wheeler said the proposal release puts the agency on target to issue the final rule in the fall. “Unlike the previous administration, we have consistently issued the annual renewable volume obligations rule on time, which is critically important to America’s farmers and all stakeholders impacted by the Renewable Fuel Standard program,” Wheeler said. “We are on track to meet the deadline on time for the third year in a row and continue to provide greater regulatory certainty to farmers and refiners across the country.”

ACE, Biodiesel, corn, EPA, Ethanol, Ethanol News, NBB, RFA, RFS

CoBank Forecasts Weak Outlook for Ethanol

Cindy Zimmerman

According to a new report from CoBank’s Knowledge Exchange Division, operating margins for ethanol producers will likely remain weak for the rest of this year due to abundant production, while declining corn production this year will also “squeeze margins and some ethanol plants will be forced to shut down or idle their production due to high corn prices or insufficient supplies.”

Ethanol plants had expanded capacity after several years of positive margins. However, margins began sliding in the summer of 2018 and plants have struggled to remain profitable since then. With stocks expected to remain above 900 million gallons through the remainder of 2019, margins are expected remain low.

Exports are cited as one area of optimism for ethanol producers, but that is based on China’s plans to convert to E10 blend gasoline nationally by the end of 2020. In the meantime, the report says domestic U.S. ethanol demand will likely be flat over the next two years, but potential growth area is E15 sold year round.

Increased demand for ethanol due to E15 will be limited in the next three years as retailers make these investments and consumer acceptance builds. Longer-term, the E15 fuel market will be able to provide stronger support to ethanol plant margins.

Persistent, low margins will also drive ethanol plants to diversify their revenue streams becoming corn bio-refineries and expanding co-product lines.

Read the report.

Ethanol, Ethanol News

ACE Conference Agenda Highlights

Cindy Zimmerman

The agenda for the 2019 American Coalition for Ethanol (ACE) annual conference in Omaha, Nebraska, August 14-16 has what it takes to focus of the major issues facing the industry.

Newly appointed President and CEO of the U.S. Grains Council (USGC) Ryan LeGrand will start it off with a keynote address following a welcome from Nebraska Governor Pete Ricketts and an update from ACE leadership during the August 15 morning general session. He will discuss the efforts of the USGC and commitment to increasing the global use and trade of U.S. ethanol.

Next, the 32nd annual conference will present a discussion on how the ethanol industry can benefit from the emerging carbon economy and the new opportunities on the horizon during the “Capitalizing on Carbon” general session panel on August 15. The panel includes Pam Miller, Siouxland Ethanol LLC, sharing how they have benefited from selling low carbon ethanol in the California market; Ron Alverson, Dakota Ethanol, providing a breakdown of what the latest GREET [Greenhouse Gases Regulated Emissions and Energy use in Transportation] modeling reveals about corn ethanol; and Brendan Jordan, Great Plains Institute, discussing the opportunities for a Midwest Clean Fuel Standard.

Afternoon breakout sessions on Thursday will cover the latest in technology innovations, strategic planning advice, and ways to make ethanol plants more profitable.

Randy Gard of Bosselman Enterprises, owner of the Nebraska-based Pump & Pantry convenience store chain, will take part in a fuel retailer panel during the August 16 general session. Following up on his remarks about the company’s E15 growth on stage with President Trump during his recent visit to Southwest Iowa Renewable Energy, Gard will share Bosselman’s next steps with year-round E15 finalized.

Listen to Gard’s comments on stage with President Trump.
Randy Gard, Bosselman Enterprises, remarks with President Trump

More details and registration information are available at ethanol.org/events/conference.

ACE, ACE Ethanol Conference, Audio, Ethanol, Ethanol News

NBB Challenges Argentina Biodiesel Duty Rate Change

Cindy Zimmerman

The National Biodiesel Board‘s (NBB) Fair Trade Coalition is criticizing a preliminary decision from the Department of Commerce in a “changed circumstances” review of countervailing duties on biodiesel imports from Argentina. According to NBB, the department determined that “Argentina’s recent changes to its export tax regime eliminated certain government subsidies provided to Argentina’s biodiesel producers” which, if finalized, would reduce the existing countervailing duty rates on Argentine biodiesel from 72% to 10%.

In a companion review of the antidumping duty order, Commerce did not propose to change the antidumping duty rates that are currently in effect, which average 75%. The reduced countervailing duty rates would be applied in addition to the existing antidumping rates, resulting in a total average rate of 85%.

Kurt Kovarik, NBB’s Vice President of Federal Affairs, stated, “NBB and the Fair Trade Coalition strongly disagree with Commerce’s proposal to virtually eliminate countervailing duty rates on Argentine biodiesel. This appears to be an unprecedented and unjustified accommodation to Argentinian producers that threatens to harm U.S. biodiesel producers and soybean farmers. Throughout this review, NBB has made the case that Argentina continues to massively subsidize its domestic biodiesel producers. Commerce’s proposal to eliminate trade protections for U.S. biodiesel producers and soybean farmers is difficult to understand at a time when the Trump administration is asking them to bear huge economic costs from trade disruptions.”

Learn more from NBB.

Biodiesel, Exports, NBB, Trade

Global Ethanol Summit Announced

Cindy Zimmerman

Three global ethanol export organizations are teaming up this year to host the first-ever Global Ethanol Summit (GES), scheduled for Oct. 13-15, 2019, in Washington, D.C.

The U.S. Grains Council (USGC), Growth Energy and the Renewable Fuels Association (RFA) are working together with the goal of engaging a broad array of global ethanol leaders about the benefits of expanding global ethanol use.

The GES follows two previous regional ethanol summits – the Ethanol Summit of the Americas held in October 2017 and the Ethanol Summit of the Asia-Pacific held in May 2018. Additional funding from the U.S. Department of Agriculture’s Agricultural Trade Promotion (ATP) program and other sponsors will support the expanded focus of the GES.

With informative general sessions, networking and dedicated business-to-business meetings over two days, the GES will provide attendees direct access to thought leaders on the future of global ethanol use and the opportunity to build partnerships with industry leaders.

More than 250 ministerial-level officials and senior-level industry leaders, ethanol producers and refiners from more than 40 countries have been invited to attend the summit and interested domestic ethanol industry leaders and other members of the ethanol value chain can register for the event at www.grains.org/event/ges.

Ethanol, Ethanol News, Exports, Growth Energy, RFA, USGC

REG Updates Website with Cleaner Fuels Resources

Cindy Zimmerman

The new and improved Renewable Energy Group website features resources about cleaner fuels like biodiesel and renewable diesel.

The website is intended to serve a wide variety of visitors, including the general public, customers, investors and potential employees. They can learn the basics of different fuels, get technical information about REG products, make purchase inquiries, search for jobs and more.

The website also features a resource center that is full of white papers, case studies, tips, articles and information for the news media. This library serves as a centralized location for visitors to learn about the environmental, performance, and financial benefits of biodiesel, renewable diesel, and other fuels from an authoritative source in the industry.

Renewable Energy Group, based in Ames, Iowa, is North America’s largest producer of biodiesel.

Biodiesel, renewable diesel, Renewable Electricty Standard (RES)

USDA Corn Acreage Report Surprises

With all the weather-related planting delays we’ve had, USDA’s Acreage report out Friday was a big surprise to the trade with corn acres estimated to be three percent higher than last year. At the same time, soybean acres are estimated to be the lowest in six years.

Corn planted area for all purposes in 2019 is estimated at 91.7 million acres, up 3 percent from last year. Compared with last year, planted acres are up or unchanged in 40 of the 48 estimating States. Area harvested for grain, at 83.6 million acres, is up 2 percent from last year.

Soybean planted area for 2019 is estimated at 80.0 million acres, down 10 percent from last year. This represents the lowest soybean planted acreage in the United States since 2013. Compared with last year, planted acreage is down in all 29 estimating States.

USDA also estimates all wheat planted area for 2019 at 45.6 million acres, down five percent from last year and the lowest all wheat planted area on record since records began in 1919. All cotton planted area for 2019 is estimated at 13.7 million acres, three percent below last year.

NASS will be doing a recount in July to collect updated information on 2019 acres planted to corn, cotton, sorghum, and soybeans in 14 states. The planted acreage information released Friday was collected during the first two weeks of June. Excessive rainfall had prevented planting at the time of the survey, leaving a portion of acres still to be planted for corn in Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, North Dakota, Ohio, South Dakota, and Wisconsin; cotton in Arkansas; sorghum in Kansas; and soybeans in Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, North Dakota, Ohio, South Dakota, and Wisconsin. If the newly collected data justify any changes, NASS will publish updated acreage estimates in the Crop Production report to be released at noon ET on Monday, Aug. 12.

The MGEX Crop Report conference call featured commentary from Brian Hoops of Midwest Market Solutions.
MGEX call commentary, Brian Hoops, Midwest Market Solutions

AgWired Animal, AgWired Energy, AgWired Precision, Audio, corn, Soybean, USDA

Senators Urge EPA To Update Ethanol Science To Improve Trade

Cindy Zimmerman

Sens. Chuck Grassley (R-IA) and Dick Durbin (D-IL), with a bipartisan group of senators sent a letter this week urging the EPA to update an outdated environmental analysis on ethanol in order to improve foreign sales opportunities.

Peer-reviewed science conducted by the U.S. Department of Agriculture (USDA) has affirmed U.S. ethanol lowers greenhouse gas emissions between 39 to 43 percent better than gasoline. EPA has rejected all calls to update these calculations, instead using data that is nearly 10 years old, which ignores the technological advancements in ethanol production.

Along with Durbin and Grassley, the letter was also signed by Sens. Joni Ernst (R-IA), Tina Smith (D-MN), John Thune (R-SD), Tammy Baldwin (D-WI), Roy Blunt (R-MO), Amy Klobuchar (D-MN), Tammy Duckworth (D-IL), Deb Fischer (R-NE) and Josh Hawley (R-MO).

The senators urged EPA to adopt the scientific model, “Greenhouse gas and Regulated Emissions and Energy Use in Transportation,” or GREET, developed by Argonne National Laboratory. American Coalition for Ethanol (ACE) CEO Brian Jennings says current data from the GREET model indicate that corn ethanol’s carbon intensity is almost 50 percent less than petroleum gasoline providing significantly more GHG reduction benefits than when the RFS was enacted a decade ago.

“Last year, ACE published “The Case for Properly Valuing the Low Carbon Benefits of Corn Ethanol” recommending, as is stated in the Senators’ letter, that EPA refer to the latest U.S. Department of Energy GREET model for life cycle analysis of corn ethanol,” said Jennings. “One of the most direct ways to capitalize on agriculture’s ability to mitigate GHG emissions is to properly acknowledge the role U.S. farmers and ethanol producers are playing to dramatically reduce life cycle GHG emissions from corn ethanol by improving efficiencies, investing in technologies, and adopting sustainable agricultural practices.”

Read the ACE White Paper and learn more about it in this interview with former ACE President Ron Alverson, Dakota Ethanol, one of the primary authors of the report –
Interview with Ron Alverson, Dakota Ethanol

ACE, Audio, corn, Energy, Ethanol, Ethanol News