Renewable Fuels Association President and CEO Geoff Cooper Wednesday morning told the U.S. Environmental Protection Agency that its weak proposal to counter the damaging effects of small refinery exemptions from the obligations of the Renewable Fuel Standard would simply not do the job it has been promised to do.
“This proposal fails to reflect the letter and spirit of the president’s commitment to restore integrity to the RFS, fails to assure that the statutorily-required 15-billion-gallon level for conventional biofuels will be met, and fails to restore stability in the marketplace by definitively ending the practice of allowing small refinery exemptions from eroding RFS biofuel demand,” Cooper said in testimony at an EPA field hearing in Ypsilanti, Michigan.
In his testimony, Cooper recounted the impact of the waiver, with lost demand leading to the closure or idling of 19 ethanol plants and the decimation of RIN prices – blending credits that measure the success of the RFS program and the ethanol industry.
“RFA does not oppose the granting of small refiner waivers to any company that can demonstrate it is being harmed by the RFS,” Cooper said. “We do believe this is a high bar, however, particularly as RIN prices have fallen precipitously and EPA itself has concluded the cost of RIN compliance is recovered in the market. Indeed, we believe it highly unlikely any company is being negatively impacted by the RFS today.”
Cooper also explained why the new supplemental proposal won’t succeed. EPA bases on the average of what the Department of Energy has recommended for waivers, not the waivers actually granted—and the formers is significantly less than the latter.
“The problem with this proposal is that EPA has seldom followed DOE’s recommendations in deciding SRE petitions,” he said. “For the 2016-2018 compliance years, DOE on average recommended that 7.3 billion gallons of gasoline and diesel be exempted from RFS obligations, but EPA actually exempted an average of 12.8 billion gallons–75% more.”
EPA will be accepting public comment on the supplemental proposal until Nov. 29. For more information on the proposal and how to comment, click here.