The Environmental Protection Agency finalized the Renewable Fuel Standard (RFS) for next year, reaching the target of 15 billion gallons for ethanol, much higher than the proposal.
Though, that may not immediately help out corn prices according to the Iowa Renewable Fuels Association.
Executive Director of IRFA Monte Shaw says there's a lot of corn this year, "But it definitely puts an upward pressure on corn demand and corn prices, which is good for farmers. It sends a signal to retailers saying hey we are going to get these higher blends out there and I think it gets the RFS back on track for the handoff to the next administration and so we are very excited about that."
Biodiesel is also part of the RFS final numbers. The Iowa Biodiesel Board reports right now there are 12 plants in the state of Iowa with the capacity to produce more than 320 million gallons of biobased fuel, which is about $345 million in GDP to the state of Iowa.
Grant Kimberley, Executive Director of the Iowa Biodiesel Board says, "It means 63-70 cents a bushel price of soybeans to farmers, it means lower soybean meal prices to livestock producers for lower feed costs, so it's a win-win-win all the way around for the entire Iowa economy."
Shaw says he's disappointed the EPA did not set the biobased diesel number higher, they ended up at 2.1 billion gallons for 2018. This year, the biobased diesel industry will produce close to 2.5 gallons, which is what the industry asked the EPA for.
He says the RFS was intended to push the industry forward, "It was not intended to maintain the status quo, or to lag what was going on in the marketplace, so we think the EPA really did miss the boat in not pushing further forward with the biodiesel specific number.
Kimberley says the advanced biofuel category is a bright spot for biodiesel in the RFS. They were only expecting 4 billion gallons and the EPA raised that to 4.28 billion. Iowa's biodiesel counts as some of those advanced biofuels, but it has to compete with sugarcane ethanol for that target.
Kimberley says, "So we think biodiesel volumes are going grow even more so than what people have initially proposed because of the advanced biofuel category."