The Environmental Protection Agency’s decision to deny attempts to change Renewable Fuel Standard rules is good news for the ethanol industry and fuel retailers who would have had to assume responsibility for blending ethanol with gasoline, according Iowa officials who opposed the changes.
“This is the right policy conclusion and I’m glad to see it happening,” Sen. Chuck Grassley said about the EPA decision announced Wednesday. “This decision puts the issue to bed, and certainty is so important. It’s a decision from the EPA that sides with the integrity of the RFS.”
Moving the point of obligation to blend ethanol with gasoline “from a handful of refiners to hundreds or thousands of small fuel retailers would undermine the integrity and viability” of the Renewable Fuel Standard, Grassley said. Refiners would have little incentive to produce the necessary fuel blends, which would make it difficult for fuel retailers to comply, he said.
Sen. Joni Ernst called it a “win for Iowans” that the administration is keeping President Donald Trump’s “pledge to rural America to advance the full potential of the RFS.”
However, the EPA ruling is not the final word on changes, according to Grassley’s office. A decision on proposed changes in the renewable volume requirements for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel renewable volume requirements is to be announced Nov. 30, the EPA said.
In rejecting a petition to shift the responsibility for blending renewable fuels to distributors, the EPA concluded that the change sought by oil interests would not benefit the program and could significantly reduce renewable volume obligations for ethanol and other renewable fuels under the fuel standard, which was implemented in 2005 as a way to support farmers, reduce imports and combat climate change.
That “ensures stability in the biofuels market,” said Gov. Kim Reynolds’ spokeswoman, Brenna Smith. “Gov. Reynolds expressed that to (EPA) Administrator (Scott) Pruitt on multiple occasions, and he genuinely listened to her concerns.”
The change sought by refiners was widely opposed by fuel marketers, retailers, truck stop operators, petroleum producers and renewable fuel producers because of the added complexity and the undermining of investments that businesses have made to comply, Grassley, Ernst and other senators from corn-producing states wrote to Trump.
“The overwhelming majority of transportation fuel market participants oppose any change to the point of obligation because it would cause massive disruptions and could lead to higher prices for consumers,” the letter states.
Changing the standard’s point of obligation would have rewarded “those who haven’t lifted a finger to help the implementation of the RFS and to punish those who have worked hard to make it the most successful energy policy in U.S. history,” Iowa Renewable Fuels Association Executive Director Monte Shaw said.
An administration official said that in the judgment of the EPA, changing the point of obligation would not result in a net benefit and would be disruptive to the program. Also, it would undermine “long-settled expectations, and the program stability” that are critical to success of the program.
Growth Energy, which represents producers and supporters of ethanol, called the proposed changes a “one-sided handout (that) would have added regulatory red tape, created havoc in the marketplace, and denied consumers access to more affordable fuels with higher blends of biofuels like E15.”
The RFS is America’s “single most successful energy policy,” saving consumers money, protecting the environment and improving U.S. energy independence, Growth Energy said.