Trump administration says plan would restore ethanol demand

DES MOINES, Iowa (AP) – The Trump administration says it plans to implement new rules that will increase demand for ethanol, reversing a decline caused by exemptions given to oil refineries.

Environmental Protection Agency (EPA) Administrator Andrew Wheelersaid President Trump's new plan on the Renewable Fuel Standard (RFS) would continue to promote domestic ethanol and biodiesel production, supporting the Nation’s farmers and providing greater energy security.

“Today’s agreement is the latest in a series of steps we have taken to expand domestic energy production and improve the RFS program that will result in sustained biofuel production to help American farmers," Wheeler said.

The proposal announced Friday, Oct. 4 follows months of complaints by Midwest farmers, politicians and the ethanol industry that the federal government's granting of waivers to refiners had violated federal law and forced some ethanol plants to close.

Roughly 40 percent of U.S. corn is used to produce ethanol, so declining demand for the fuel additive can depress prices for the grain.

"Building on the success of the year-round E15 rule, this forward-looking agreement makes improvements to the RFS program that will better harness the production of our farmers and ensure America remains energy dominant,” said U.S. Department of Agriculture (USDA) Secretary Sonny Perdue.

Under this agreement, the following actions will be undertaken by EPA and USDA:

• In a forthcoming supplemental notice building off the recently proposed 2020 Renewable Volume Standards and the Biomass-Based Diesel Volume for 2021, EPA will propose and request public comment on expanding biofuel requirements beginning in 2020.
• EPA will seek comment on actions to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020, and that the volume obligation for biomass-based diesel is met. This will include accounting for relief expected to be provided for small refineries.
• EPA intends to take final action on this front later this year.
• In the most recent compliance year, EPA granted 31 small refinery exemptions.
• Building on the President’s earlier decision to allow year-round sales of E15, EPA will initiate a rulemaking process to streamline labeling and remove other barriers to the sale of E15.
• EPA will continue to evaluate options for RIN market transparency and reform.
• USDA will seek opportunities through the budget process to consider infrastructure projects to facilitate higher biofuel blends.
• The Administration will continue to work to address ethanol and biodiesel trade issues.

While National Farmers Union officials were relieved that the administration intends to expand the market for biofuels in the coming years, NFU President Roger Johnson is concerned that it will not go far enough to compensate for all of the economic losses incurred by farmers and rural Americans.

“Family farmers have been waiting many months for this announcement. In the meantime, they have continued to lose millions of dollars of hard-earned income, upwards of 30 biofuels plants have halted production, and hundreds of rural Americans have lost their jobs," Johnson said in a news release. “The damage inflicted on rural communities by these waivers cannot be emphasized enough. While this plan will make important progress in making the biofuels industry whole, we worry that it may be too little, too late."

Iowa Senator Joni Ernst said her message on behalf of farmers has been clear: Uphold the RFS—15 billion means 15 billion.

"The president heard that message and has acted on it. The steps outlined today by the administration will help increase demand for our biofuels, provide certainty for farmers and producers for years to come, and ensure that EPA is implementing the RFS as it was written,” she said.

Although the proposal by the Environmental Protection Agency and Department of Agriculture wouldn't address the current loss of ethanol demand, it would ensure that beginning in 2020, the government would comply with a 15-billion-gallon standard already required under federal law.

Colleen Kottke of the Wisconsin State Farmer contributed to this report.