President Trump announces plan to restore ethanol demand

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WASHINGTON (KTIV) – As farmers and ethanol producers struggle with decreased demands for biofuels, the Trump administration announces a new agreement meant to promote domestic ethanol and biodiesel production.

The proposal was announced Friday, October 4, and follows months of complaints by Midwest farmers, politicians and ethanol producers.

“The President recognizes that American farmers are the most productive in the world, and he has found a way to pursue policy that promotes economic growth and supports our producers,” said USDA Secretary Sonny Perdue. “Building on the success of the year-round E15 rule, this forward-looking agreement makes improvements to the RFS program that will better harness the production of our farmers and ensure America remains energy dominant.”

According to a press release by the U.S. Department of Agriculture, under the agreement, the following actions will be undertaken by the EPA and USDA.

  • In a forthcoming supplemental notice building off the recently proposed 2020 Renewable Volume Standards and the Biomass-Based Diesel Volume for 2021, EPA will propose and request public comment on expanding biofuel requirements beginning in 2020.
    • EPA will seek comment on actions to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020 and that the volume obligation for biomass-based diesel is met. This will include accounting for relief expected to be provided for small refineries.
    • EPA intends to take final action on this front later this year.
  • Building on the President’s earlier decision to allow year-round sales of E15, EPA will initiate a rulemaking process to streamline labeling and remove other barriers to the sale of E15.
  • EPA will continue to evaluate options for RIN market transparency and reform.
  • USDA will seek opportunities through the budget process to consider infrastructure projects to facilitate higher biofuel blends.
  • The Administration will continue to work to address ethanol and biodiesel trade issues.

In August, the EPA granted 31 Small Refinery Waivers for 2018.

The waivers freed refineries from the Renewable Fuels Standard to blend biofuels, like ethanol, into their gasoline.

According to the Board of Siouxland Energy Cooperative, the exemptions have helped to reduce ethanol demand by 4 billion gallons.

While the Renewable Fuels Association reports U.S. production of ethanol has fallen below 1 million barrels a day.

The Trump administration’s new ethanol deal seeks to replace the lost biofuel from the small oil refinery exemption waivers and expand ethanol blending beginning in 2020.

“A robust renewable fuel standard is critical to a healthy ag economy and across the nation,” said Iowa Gov. Kim Reynolds. “We are grateful to President Trump for honoring the federal statute to blend 15 billion gallons of ethanol annually and allowing existing E10 pumps to deliver E15 fuel, helping drive domestic demand for biofuels. By protecting the RFS, President Trump demonstrated his commitment to rural America and the American farmer.”

Congress passed the Renewable Fuel Standard to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector while reducing reliance on imported oil.

In addition to the goals of increasing production of home-grown renewable fuels, the program supports domestic demand for farm commodities, increases farm income, and creates rural jobs.

“Ensuring Renewable Volume Obligations do not go below 15 billion gallons and expanding access to E15 will bolster the RFS and ethanol production at a critical time for our nation’s rural economy, which has been suffering from low commodity prices,” said Nebraska Gov. Pete Ricketts. “Thank you to President Trump for taking these important steps for ethanol and our great farm families!”

In May South Dakota Representative Dusty Johnson and Agriculture Committee Chairman Rep. Collin Peterson introduced the Renewable Fuels Standard Integrity Act of 2019. 

The bill would reallocate gallons lost through Small Refinery Exemptions that undermine the integrity of the RFS, ensuring lost gallons are included in any final Renewable Volume Obligations.

Friday’s announcement follows that intent and restores the integrity of the RFS by reallocating gallons on a three-year rolling average of waived gallons.

“Today’s announcement is a win for South Dakota farmers, ethanol producers and anyone that cares about a strong rural economy and job growth,” said Rep. Johnson. “I’m proud of the coalition of farm-state members that made it clear that we must maintain the integrity of the RFS as Congress intended.”

To learn more about the Trump administration’s agreement click here. 

Dean Welte

Dean Welte

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