Ethanol Blog

House Passes Biofuels Relief Measures, AGs Want RFS Waiver

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The U.S. House of Representatives passed legislation on Friday that would provide billions of dollars in relief to the biofuels industry. (DTN file photo)

Biofuels producers would receive direct relief payments as part of legislation passed by the U.S. House of Representatives late on Friday.

If the Senate takes up the measure and a final law is signed by President Donald Trump, biofuels producers could receive 45 cents per gallon for fuels produced between Jan. 1 and May 1, 2020, as outlined in the COVID-19 relief bill passed on Friday.

In addition, producers forced offline for one or more calendar months during this time would qualify for the same credit, based on half the volume produced during the corresponding month or months in 2019.

Based on data from the Energy Information Administration, about 4.6 billion gallons of ethanol have been produced since Jan. 1. This means ethanol producers would receive about $2.2 billion in relief.

Based on the generation of renewable identification numbers, or RINs, during the Jan. 1 to May 1 period for biodiesel and renewable diesel of about 675 million gallons, those industries would receive about $303.8 million.

"After the first phases of stimulus legislation overlooked the catastrophic economic fallout the COVID-19 pandemic is having on renewable fuel producers, this is incredibly good news," said Brian Jennings, chief executive officer of the American Coalition for Ethanol.

"There is still a long road ahead, so we will continue to work with our champions in Congress to ensure the phase four stimulus package includes this aid."

Growth Energy Chief Executive Officer Emily Skor said in a statement the economic decline has taken a "terrible toll" on rural America where farmers face an "uncertain future."

ATTORNEYS GENERAL WANT WAIVER

Also on Friday, attorneys general from Wyoming, Utah, Louisiana, Oklahoma, Texas, Arkansas and West Virginia, asked EPA Administrator Andrew Wheeler to grant a request from the governors of their states to waive the Renewable Fuel Standard in light of the COVID-19 economic slowdown.

In a letter to Wheeler from the AGs, they said other federal agencies have responded to the emergency by granting regulatory and other relief.

"Unfortunately, economic areas further removed from direct federal involvement still bear unnecessary regulatory burdens," the said in the letter.

"Chemical refiners are crucial to advanced economies and provide economic support for both states and workers' families alike. These hard-working Americans are named 'critical infrastructure workers' by the Cyber and Infrastructure Security Agency, meaning they fill an economic need vital to economic and national security.

"Utilizing your waiver authority 'by reducing the national quantity of renewable fuel required' would alleviate the regulatory cost of purchasing credits in the form of renewable identification numbers. Congress intended the renewable fuels program to be transformative, not destructive. If the program threatens the very economies it intends to modify, the administrator is empowered to take necessary steps to protect the regulated markets by waiving the program's requirements."

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

Follow me on Twitter @toddneeleyDTN

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