Biofuels, Ag Push EPA to Enforce RFS

LINCOLN, Neb. (DTN) -- With rumors swirling EPA will cut Renewable Fuel Standard volumes perhaps in the coming days, biofuels and agriculture groups on Friday pressed the agency to get the law back on track during a public hearing on a proposal to extend 2019-2021 compliance deadlines for refiners.

EPA missed the statutory deadline to finalize volumes for 2022 on Tuesday and is more than one year overdue on finalizing 2021 volumes.

Biofuels and agriculture groups expressed frustration to EPA officials about the tardiness of the RFS program.

When it comes to the latest proposal, those groups said they believe the agency would open up the program for continued delays.

That is because EPA's proposal would move future compliance deadlines to after RFS volumes are finalized each year. This would automatically extend reporting deadlines when RFS volume obligations are delayed.

On Thursday, Reuters reported the Biden administration may soon release an RFS proposal that includes retroactive cuts to 2020 volumes, as well as reductions for both 2021 and 2022.

"There's a growing sense of frustration among ACE members that we once again find ourselves testifying at another EPA hearing when we merely need the agency to follow the law when it comes to the Renewable Fuel Standard," said Ron Lamberty, senior vice president of the American Coalition for Ethanol, or ACE.

"We need to be very clear even if these proposed compliance extensions go into effect that should no way be viewed as an implicit acceptance of EPA's failure to do its job and establish RVOs by Nov. 30 of each year for the following year."

Lamberty told agency officials during the Zoom hearing that EPA expects the RVO deadline to be "missed regularly and that needs to continue to be the exception."

EPA argues for deadline extensions because the agency has yet to decide on more than 50 pending small-refinery exemption petitions for 2019 and 2020, and because 2021 volume requirements have not been set.

Geoff Cooper, president and CEO of the Renewable Fuels Association, asked the agency to "immediately" decide the pending SRE petitions and require refiners to comply with 2019 and 2020 obligations, as well as to release volume proposals for 2021 and 2022. He also asked EPA to resist calls from the refining industry to reopen and slash 2020 volumes.

"EPA's RVO is a percentage-based standard that already accommodates fluctuations in the actual consumption of gasoline and diesel fuel," he said.

"No further adjustment to the 2020 RVO is necessary or legally permissible. RFA fully understands that the previous administration left the RFS program in disarray and failed to meet its deadlines for deciding SRE petitions and issuing RVOs. Extending the compliance deadlines again would only exacerbate the uncertainty and instability created by the past administration."

Chris Bliley, senior vice president of regulatory affairs for Growth Energy, said agency inaction on the RFS is harming Biden administration efforts to cut greenhouse gas emissions in transportation.

Growth Energy asked the EPA to update greenhouse gas models that show corn ethanol has 46% lower GHG emissions than gasoline, to restore year-round E15 sales, to follow a 2017 court order to restore 500 million gallons waived from the RFS, and to set volumes for 2021 and 2022.

"Not only will this proposal stall environmental progress it will cause further uncertainty for farm families and biofuel workers across the country while extending our dependence on fossil fuels," he said.

"The intent of the RFS is to blend more biofuels into our nation's transportation fuel supply. Period. It is not meant to reward oil companies for suing to prevent higher blends and then demand that the agency further delay compliance."

National Corn Growers Association President John Linder said EPA's handling of the law is creating uncertainty in the countryside.

"The EPA proposal offers more uncertainty, extending defined deadlines rather than setting compliance requirements and setting waiver petitions erodes the RFS integrity," he said.

"Rather than prolonged uncertainty, we urge EPA to follow the law by issuing RFS volumes that continue to provide for 15 billion gallons of ethanol. Corn farmers are posed to produce that feedstock."

Patrick Kelly, senior fuels policy advisor at the American Petroleum Institute, told the agency the delay was needed because EPA has fallen behind.

"These changes are necessary due to the continued delays in issuing timely annual RFS volume obligations," he said.

"And EPA's inaction on pending small-refinery exemptions petitions, as EPA correctly notes in the proposal establishing compliance deadlines after the subsequent years' RVOs are finalized, will allow obligated parties to better plan their compliance for a given calendar year."

Kate Shenk, director of regulatory affairs at the National Biodiesel Board, said EPA's proposal would weaken the RFS by allowing obligated parties to assume they don't need to necessarily comply.

"What is also concerning about this proposal is that EPA is attempting to sneak in an automatic delay in the compliance reporting for future years," she said.

"However, what we see is an admission that EPA will miss the statutory deadlines going forward and making it easier to do so. With EPA's current non-actions on issuing the RVO coupled with this proposal, EPA is acting as if there's no statutory deadline for promulgating annual rules."

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

Follow him on Twitter @DTNeeley

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