Biofuel Politics, E15, SAF, GREET

ALTOONA, Iowa (DTN) -- Biofuel producers and farmers were caught between two storms at the Iowa Renewable Fuels Summit on Thursday.

Beyond literal snowstorms, every positive such as boosting E15 or Sustainable Aviation Fuels also is caught in a regulatory complication. Presidential contenders speaking at the summit explained that biofuels were part of their plan to unleash greater fossil fuel production nationally.

Here are a few of the key issues for biofuels:

1. USDA KEEPS BACKING BLENDER PUMPS

Agriculture Secretary Tom Vilsack announced $19 million in grants to 22 states to upgrade blender pumps and other infrastructure for retailers to offer higher blends. Vilsack said USDA would be releasing $50 million each quarter for the rest of the year to continue spurring those investments.

"So, you are going to continue to see literally hundreds, if not thousands, of dispensing systems," he said.

In Iowa, Vilsack pointed to a grant that would help the retailer Casey's upgrade pumps at 83 stations for E15 fuel.

Adding more biofuel dispensers broadens the ability for consumers to increase demand through lower prices for E15 or higher blends.

"All of us are sensitive to fuel costs, certainly consumers are," he said.

2. E15 STILL STUCK IN REGULATORY DOCKET

After roughly 500 days, an eight-state year-round E15 rule is finally at the White House Office of Budget and Management. The final rule moved EPA to the White House on Dec. 18, 2023. There are concerns whether that rule gets done in time to go into effect before the 2024 summer driving season.

"We need to see much faster progress on that rule that will be effective this year," said Emily Skor, CEO of the biofuels group Growth Energy.

Skor also stressed the industry wants a national E15 policy, not a regional rule just for the Midwest. That requires working with lawmakers to get a "permanent legislative solution," she said.

Also see "Biden Administration Sends E15 Rule to White House for Final Review" here: https://www.dtnpf.com/….

3. SAF ON THE HORIZON

The key to growth in the biofuels industry moving forward is expanding renewable fuels beyond trucks and cars. Vilsack touted a potential 36-billion-gallon Sustainable Aviation Fuel (SAF) market for biofuels, which he described as a "humongous" opportunity for the biofuels industry to grow.

"We're not going to have battery-powered planes, hydrogen-powered planes, at least not in the foreseeable future."

Vilsack said the play for SAF tax credits for biofuels was led by the biggest players in the airline industry -- United, Delta and American Airlines. "All made the case that it was important to include biofuels."

Monte Shaw, executive director for Iowa RFA, said the industry is ramping up for SAF production, but that is going to require policymakers to allow carbon pipelines for sequestration to open that potential.

"The only way to unlock the full value of the SAF market to rural America is to decarbonize our ethanol," Shaw said. "The best way for many ethanol plants to reduce their carbon score is by partnering with a carbon capture pipeline."

4. RISKS TO THE GREET MODEL

Biofuels appeared to score a major win in the move for the SAF market when the Treasury Department in December agreed to accept the GREET model -- Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation -- to capture key fuel tax credits for production.

The problem now is that an interagency task force is making changes to the GREET model. Skor, in an interview with DTN, said it is unclear just what kind of changes could occur in the modeling. Major changes to how "indirect land use" is factored into the model could dramatically influence the carbon scoring for tax credit.

"The carbon modeling needs to follow the best available science," Skor said.

Environmental groups continue pushing to change GREET to build in "inaccurate and outdated assumptions about land-use change," Skor said. The changes in modeling could "block the only viable source of clean renewable energy that is available at sufficient scale to decarbonize the skies," she added.

Vilsack said USDA's chief economist is the point man for the department on the GREET model. "We need to make sure that we have ethanol as an inclusive opportunity within the feedstock opportunities that will help us build this 36-billion-gallon market," he said.

He added, "Fortunately, the airline industry sees it the same way as we see it, which is that we have multiple opportunities to produce this."

Also see "Treasury Guidance on SAF Tax Credits Paves Future for Biofuels Producers" here:

https://www.dtnpf.com/….

5. DESANTIS ON BIOFUELS, AG

After a bruising debate on Wednesday night, Florida Gov. Ron DeSantis and former United Nations Ambassador Nikki Haley offered their views on biofuels and agriculture.

Catering to the crowd, each said they unleash biofuels better than the other.

The Florida governor highlighted that he had toured the entire state and met with "all facets of the agriculture industry, including the biofuels industry." Through that, DeSantis said,

"I have been able to learn a lot about the critical role that plays in small communities, bigger communities and how it impacts the economy, jobs and overall thinking from the perspective of somebody nationally that believes that America should be producing its own energy."

On energy policy, DeSantis said he backs an "all-of-the-above strategy that includes biofuels."

"I have checked all of the boxes they have been looking for.

Like others who challenged EPA on the slow, regional year-round E15 rule, DeSantis said his administration would implement E15 nationally, and possibly more.

"There is the possibility of people doing much higher blends, and there should be a waiver for that," DeSantis said.

The governor also criticized California's Proposition 12 law on the space requirements for hog producers, saying it, "basically now is regulating how you produce pork in other states, including here in Iowa."

"People are fleeing California because of its bad policies."

While touting biofuels, DeSantis also challenged ESG -- policies around environmental, social and governance. The governor said groups use issues such as climate change and are "putting their thumb" on energy policy and blaming agriculture for climate as well. He noted how he "knee-capped ESG" in Florida by banning ESG policies from becoming factors for decisions in pension funds or municipal bonds.

6. HALEY ENERGY, AG EXPORTS

Haley pointed to election ads attacking her because she polls better against President Joe Biden than does former President Donald Trump or DeSantis. She also noted DeSantis had spoken to the group before her. "Did he tell you he authored legislation to ban the Renewable Fuels Standard?" Haley said. She added, "Did he tell you that he co-sponsored five different bills to ban the Renewable Fuels Standard?"

Haley also said DeSantis banned fracking and offshore drilling in Florida.

On energy, Haley said permitting needs to be sped up and the U.S. needs to "open up the Keystone pipeline" as well as export more liquified natural gas.

"We need to focus in on biofuels, and not just enough; let's do enough we can export it out. Let's turn it into an economic powerhouse."

The U.S. right now exports more than 1 billion gallons of ethanol. Canada is the largest market, taking in more than 603 million gallons in the last market year.

Haley said she would support the Renewable Fuel Standard (RFS), but also "get our energy system in such a way" that the U.S. does not go to countries such as Saudi Arabia or Venezuela for oil.

On farmers, Haley said they cannot control prices, but "the last thing they need is government pushing down on them more" through EPA. Food security is national security, she said.

On China, Haley said, "Iowa is very tied to China, and China is our No. 1 national security threat." Haley called for diversifying U.S. exports to India, Japan, South Korea and Israel to reduce export reliance on China.

"Let's go and move that trade over," she said. "You all are already seeing it now. When China buys something, they place an order, then they cancel an order. And then they wait and buy it at cheaper prices. That's what China does."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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