Over the weekend, more good news has emerged for the agricultural industry. The EPA announced that the biomass-based diesel and advanced biofuels volumes will be increased above previous year levels. The increase, however, is mitigated by the absence of reallocation of the significant gallons that were waived under exemptions issued previously by EPA to refineries.
The final rule sets the 2020 requirement for biomass-based biodiesel (BBD) volumes at 2.43 billion gallons, a 330-million-gallon increase over the 2018 and 2019 levels. Total advanced biofuel volumes, which are largely filled by biodiesel, are increased to 4.92 billion gallons.
American Soybean Association President John Heisdorffer, a soybean producer from Keota, Iowa, acknowledged the progress, saying, “We welcome this increase, as it helps a growing market for soybean oil. We are glad to see EPA acknowledge that biodiesel can play a larger role in our nation’s fuel supply.”
While ASA appreciates the increased biomass-based diesel volumes for 2020, Heisdorffer reiterated the ability and capacity for additional growth. “As ASA communicated to EPA during the rulemaking process, soybean farmers and our biodiesel industry partners can meet these targets, and we have the production capacity and feedstock to reasonably achieve even further growth.”
ASA and its biodiesel industry partners also remain concerned that EPA has not reallocated the previous year volumes that have been waived through exemptions granted to refineries by EPA. The agency’s data shows that the retroactive small refinery exemptions reduced demand for biodiesel by more than 300 million gallons in 2018.
“The biodiesel industry supports agriculture by creating jobs, diversifying fuel sources, and reducing America’s dependence on foreign oil. EPA is moving in a better direction, but we urge the Administration to address the waived volumes and support the full potential of U.S. soybean farmers and biodiesel producers.”
The National Corn Growers Association said the EPA moves renewable fuels and energy security forward in 2019, but the growth will only be realized if EPA does not grant refiners further Renewable Fuel Standards exemptions.
“We are pleased the Environmental Protection Agency maintained the implied conventional ethanol volume of 15 billion gallons and increased the total 2019 renewable fuel volume as intended by the RFS. However, EPA granted refineries 2.25 billion gallons in RFS waivers over the past year but did nothing to account for those lost volumes. If EPA continues to grant large amounts of waivers in this manner, the volumes set in this final rule cannot be met,” said NCGA President Lynn Chrisp.
In comments on the rule, NCGA and its grower members urged EPA to take steps to maintain the integrity of the RFS, including projecting 2019 waivers and accounting for those gallons to keep the RFS volumes whole. By failing to account for waivers in this final rule, EPA ensures that any 2019 exemptions will reduce the volumes the agency sets today.
“Ethanol has been and continues to be a strong market for U.S. corn farmers, especially during these tough times in the farm economy. When the EPA continues to grant waivers and does not account for those volumes in this rule, domestic demand for our crop is lost, impacting farmers’ livelihood and the economy of rural America,” Chrisp said.
NCGA will continue to work with EPA to ensure the full energy and environmental benefits of the RFS are achieved. As EPA implements this volume rule, as well as considers pending petitions for RFS exemptions, NCGA urges the agency to prevent further demand destruction and support a strong RFS that will benefit America’s farmers and rural communities, provide cleaner air, and boost our nation’s energy security.
