Ethanol Blog

A group of 70 mayors from towns and cities across ethanol-production country have asked EPA Administrator Andrew Wheeler to reject requests by states and others to waive the Renewable Fuel Standard requirements because of COVID-19, in a letter sent to the agency on Monday.

The mayors from South Dakota, Nebraska, Wisconsin, Missouri, Minnesota, Iowa, Illinois, Indiana, Kansas and Colorado, said the closure of local ethanol plants has hurt their rural economies.

"Some of us have already seen our local ethanol plant shutter its doors while others have witnessed their local ethanol plant reduce operations," the letter said.

"This is having devastating ripple effects throughout our economy. Such waivers would further damage our communities and the farmers, workers, and families who depend on a vibrant biofuels industry. The unprecedented, nationwide COVID-19 pandemic is keeping drivers off the road and crashing demand for gasoline and ethanol alike. Conditions for motor fuel are hurting us all as virtually every gallon of gasoline contains at least 10% ethanol."

At this point, more than 70 plants have idled and another 70 have "significantly cut production, and we expect this to worsen," the mayors said.

In April, Archer Daniels Midland announced it was temporarily idling two of the largest ethanol plants in the country for up to four months, including the company's plants in Columbus, Nebraska, and Cedar Rapids, Iowa, taking offline about 613 million gallons in production capacity.

"The biofuels industry is reeling," the mayors write.

"The request for these waivers is unjustified under the law. Such waivers from RFS requirements may only be granted if there is a demonstration that the RFS causes severe economic harm to the economy as a whole. In reality, refiner market conditions are a result of plummeting demand for gasoline across the country, not compliance with the RFS. Further, the RFS already considers demand reduction by adjusting annual blending volumes to reflect actual motor fuel demand."

The mayors said claims by refiners that rising Renewable Identification Numbers, or RINs, prices hurt refiners is inaccurate.

"According to EPA's own RIN market analysis study released in 2015, the agency found that merchant refiners are not disadvantaged by higher RIN prices as costs are recovered in the sale of their product," the letter said.

"Our communities depend on the RFS to support commodity prices for our farmers, high-skilled job opportunities for our workers, and reduce harmful air pollutants in our air. We ask that EPA reject unjustifiable RFS waiver requests and protect rural communities."

Read the letter here: https://growthenergy.org/…

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

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