AFBF Welcomes Boost to Biofuels Volumes, but Cautions Against Overuse of Small Refinery Waivers

Though pleased with EPA’s proposal to increase renewable fuel volumes, the American Farm Bureau Federation warned that the agency’s excessive use of small refinery waivers diminishes the likelihood that volume targets will be met.

“EPA’s excessive use [of small refinery waivers] will undermine the goals that were set by Congress to create a more robust renewable fuels industry and greater energy independence,” AFBF said in recent comments to EPA. The organization said EPA’s actions could result in an estimated 1.5 billion gallons of lost demand for renewable fuels.

EPA’s proposed renewable fuels volume standards for 2019 would maintain the statutory requirement for conventional renewable fuel at 15 billion gallons, increase cellulosic fuels to 381 million gallons and bump up total advanced biofuels to 4.88 billion gallons. It would also increase the biomass-based diesel volume to 2.43 billion gallons for 2020.

Farm Bureau touted the Renewable Fuel Standard’s many successes, including the growth it spurred within the agriculture sector as corn and soybean farmers expanded their crop production to meet growing demand for corn- and soybean-based biofuels.

Beyond the boost to the agricultural economy, the RFS2 is intended to spur investment in cleaner, domestic fuels; give consumers more choices at the pump; lower gas prices; and boost the country’s energy security. But EPA has allowed dozens of oil refineries off the hook from their legal obligations to blend renewable fuels with gasoline and diesel fuel, which is jeopardizing this progress, according to Farm Bureau.

“Given the accomplishments of the RFS program to date, EPA’s excessive and unreasonable use of the small refinery waiver dampens the prospects for reduced emissions and increased energy security,” the organization cautioned.

Farm Bureau also addressed the RIN market as it relates to the current RFS2 program, noting that RINS are functioning properly and providing incentives for refiners to offer higher blends of ethanol in the market at prices that are increasingly competitive with conventional gasoline. A RIN is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use and trading.

In addition, the organization emphasized that the petroleum industry’s unwillingness to offer higher blends of biofuels should not be taken as evidence that the RFS2 is unworkable.

“Rather, it is evidence that they are unwilling to adapt to policies enunciated by Congress. But making space in the market for alternative fuels that contribute to energy independence, environmental improvement, and economic development is exactly the point of RFS2.”

Farm Bureau noted its appreciation for the administration’s consistently strong support for renewable fuels, particularly corn-based ethanol, and the importance of maintaining the country’s energy independence.