July 31, 2019 – In oral testimony presented at a public hearing today in Ypsilanti, Mich., the Renewable Fuels Association urged the Environmental Protection Agency to ensure that its 2020 Renewable Fuel Standard final rule prospectively accounts for expected small refinery exemptions and properly addresses a 2017 court order to restore 500 million gallons of blending requirements that were illegally waived by EPA in 2016.
The agency’s proposed rule, published in Monday’s Federal Register, failed to adequately address small refiner exemptions or the court order, stoking fears across the renewable fuels industry that EPA-induced demand destruction could continue in 2020.
“Unfortunately, the market has no faith that the proposed 2020 renewable volume obligations will result in biofuel blending volumes consistent with the RFS standards set by law, including the 15-billion-gallon conventional renewable fuel requirement,” RFA Chief Economist Scott Richman said. “It is a misnomer to call the numbers in the proposal ‘obligations’ as long as small refinery exemptions (SREs) continue to transform the RFS into a voluntary program for roughly one-third of the nation’s refineries.”
Saying that EPA’s proposed rule betrays President Trump’s commitment to uphold the RFS, Richman noted that EPA approved 54 SREs retroactively for compliance years 2016 and 2017, which caused ethanol consumption and the ethanol blend rate to fall in 2018 for the first time in 20 years. Not a single exemption request has been denied by EPA since 2015, he said, and 38 petitions for compliance year 2018 are still pending.
Making matters worse, Richman said, EPA’s proposal incomprehensibly ignores the D.C. Circuit Court’s 2017 order requiring the Agency to restore 500 million gallons it illegally waived from the 2016 RVO. “EPA’s claim that ‘there are very limited opportunities to use biofuels beyond the volumes we are proposing for 2020’ echoes the Agency’s reasoning in its 2016 rule that was specifically rejected by the court.”
“Congress gave EPA the direction and tools necessary to enforce the statutory RFS volumes,” Richman concluded. “That includes prospectively redistributing volumes from SREs to non-exempt parties. It also includes complying with a court order to restore illegally waived volumes from 2016. We urge EPA to do both in the final rule.”