EPA Ethanol Proposal Ignores Refinery Exemption Losses

IOWA  -- Agribusiness Reporter David Geiger speaks to Monte Shaw, the Executive Director of the Iowa Renewable Fuels Association about a newly released Renewable Volume Obligation (RVO) proposal from the Environmental Protection Agency.

David Geiger: The first question I want to hop into is the 2020 Renewable Volume Obligations was just released and I wanted to hear your thoughts on that new news.

Monte Shaw: "Um, not pleased at all. The proposal does set the conventional ethanol number at 15 billion gallons, which is what the law requires so you could argue that's good, but it does not address any of the refinery exemptions in the past, or in the future. So, that number really isn't worth the paper it's written on. What we know is it's going to be 15 billion gallons minus something. On biodiesel, it actually flatlines the number from last year in there, which is below what the market's already doing, it doesn't move cellulosic very much. So, basically, what you have is a rule that would memorialize what we're already doing when it's supposed to be moving the industry forward. So, it's really disappointing and really a let down based on what President Trump had talked about when he was recently in Iowa or over in Council Bluffs."

David Geiger: Now, as you mentioned, those Small Refinery Exemptions or SRE's were not included, and in 2017 and 2018 it's estimated 2.6 billion gallons of ethanol were lost because of that. Could you explain what impact that might have still in 2020 and 2021 without any knowledge of how that's going to be replaced?

Monte Shaw: "For farmers out there, think about that. That's a billion bushels of corn that are not going to be ground and be turned into ethanol and the distillers grains and other co products. That is devastating to our farm economy when we could use a little bit of good news right now. They're choosing not to do it, that is not fulfilling President Trump's promise to defend and protect the Renewable Fuel Standard using the tools to make sure that 15 equals 15. And in this rule, they're also defying a court order to give us back 500 million gallons that were illegally waived from the 2016 RVO through a different waiver mechanisms. If this stands, it is almost like they declared war on Iowa farmers."\

David Geiger: Now going back to the Renewable Volume Obligations, it wasn't just the Iowa Renewable Fuels Association, but many farm groups seemed displeased with the numbers exactly, which was 20.04 billion gallons of obligations for 2020 and 2021. Isn't that enough?

Monte Shaw: "Well, first of all, if the 15 billion gallons were 15 billion gallons that's what the law says, that's all we're asking for right. I mean we think we can do more. But that's what the law's asking. But it's not 20 billion gallons, it's 20 billion gallons on paper minus Lord only knows how many refinery exemptions that will lower that number. And the key here is all these numbers is what the market is already doing. We already sold and produced more biodiesel in this country than this rule, this proposed rule from two years from now would require. Does that move the market forward? No it does not."

David Geiger: Monte thank you so much for taking the time to talk to me.

Monte Shaw: "Well, I wish I had better news but this rule is not good for farmers and we're going to have to fight hard. It's just a draft. We do have time to fight and get some final rule to be better and I sure hope President Trump is listening."

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