Ethanol Leaders: Upcoming RFS Critical

OMAHA (DTN) -- A new Renewable Fuel Standard volumes proposal is expected to be released at any time, after the Office of Management and Budget this week removed the RFS proposal from its website -- meaning the release of the proposal could come any day.

With rumors flying on social media about how the upcoming proposal may or may not account for 169 pending small-refinery exemption requests, leaders of the three major ethanol groups expressed concern this week about the upcoming proposal.

During a keynote address at the Fuel Ethanol Workshop in Omaha this week, the head of the Renewable Fuels Association said the Trump administration must make sure RFS volumes proposed already include room for whatever number of SREs are granted by the U.S. Environmental Protection Agency.

Renewable Fuels Association CEO and President Geoff Cooper said the "volumes need to be real" and "cannot be undermined" by SREs. The 169 requests for exemptions cover a 10-year period and collectively would amount to 8.5 billion gallons of biofuels.

"If that volume is exempted it would have devastating consequences for our industry," Cooper said during his speech on June 10.

Cooper suggested the administration should reallocate exempted volumes to other obligated parties if SREs are granted.

"We absolutely cannot afford to experience the same sort of exemption-induced demand destruction that occurred during the first few years of the last Trump administration," Cooper said.

"To say EPA's decision on these petitions will have important and long-lasting implications for the ethanol industry would be an enormous understatement. That's why RFA has been regularly reminding EPA that if it approves any SRE petitions, it has a legal obligation to reallocate the exempted renewable fuel volumes to other non-exempt refineries."

ADMINISTRATION RFS STAMP

Brian Jennings, CEO of the American Coalition for Ethanol, said the upcoming proposal is the Trump administration's chance to "put their stamp, their fingerprints" on the future of the RFS.

"We obviously have concerns about the small-refinery exemptions; the discussions and the engagement with the Trump administration. They recognize there's significant authority in the RFS. In this post-2022 world EPA has a lot more authority to take that RFS out for a spin and try it out."

Jennings said his group has made the case to the administration that, considering Trump's push to produce and buy American products, expanded ethanol production makes sense.

Recognizing "the possibility that some of our exports could be damaged in some sort of trade war," he said, it is the responsibility of the administration to get the RFS volumes right.

Chris Bliley, senior vice president regulatory affairs at Growth Energy, said any small-refinery exemptions being granted must be accounted for in a volumes proposal.

"If you go back to Trump one, they came up with a system to basically account for small-refinery exemptions," he said.

"Our main message in this is, if you set robust volumes that a number of stakeholders can agree to, those have to be the numbers. You can't come in and undercut that by dozens of small-refinery exemptions. You can't take that out of biofuels and agriculture."

Though questions remain about how the Trump administration will approach the RFS and all things biofuels, ethanol leaders said this week they believe there's a lot to be excited about.

All signs point to California allowing E15 sales in the coming months -- a potential 600- to 800-million-gallon market -- as well as urgency in Congress to pass a permanent fix to allowing year-round E15 nationally.

The 45Z Clean Fuels Production tax credit appears to have bipartisan support in Washington and the Trump administration has put ethanol front and center in ongoing trade negotiations around the world.

Perhaps at the top of the list of things needing resolved is year-round E15.

Troy Bredenkamp, senior vice president government and public affairs, Renewable Fuels Association, said during a panel discussion this week that he was both disappointed and encouraged by the December 2024 effort in Congress that nearly resulted in the passage of year-round E15 in a must-pass bill.

"Well, we are still recovering from the disappointment in December," he said.

"In our line of work, it's good to have a short memory but in December we were this close and unfortunately at the end of it the last minute it was pulled from the continuing resolution. We're still working collectively in a large coalition to find the best vehicle that is going to be available for us to attach to E15. It's tricky."

Bredenkamp said the industry has "assurance" from Speaker of the House Rep. Mike Johnson, R-La., and Senate Majority Leader Sen. John Thune. R-S.D., that E15 will be attached to the next available legislation.

Bliley said the E15 push is not solely coming from ethanol interests.

"I think the important thing is there is a strong bipartisan chorus with us," he said.

"And they're looking for any vehicle to get this done. We (see) support on the Democratic side. This is not something that just Congress wants or the industry wants, this is something we've been working with a coalition."

Todd Neeley can be reached at todd.neeley@dtn.com

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