- DTN Headline News
EPA Denies All Gap-Year RFS Waivers
By Todd Neeley
Wednesday, September 16, 2020 1:24PM CDT

OMAHA (DTN) -- The Trump administration made it official on Monday, announcing in an EPA news release that the agency will deny all pending gap-year small-refinery exemptions to the Renewable Fuel Standard for 2011-2018.

"This decision follows President (Donald) Trump's promise to promote domestic biofuel production, support our nation's farmers, and in turn strengthen our energy independence," EPA Administrator Andrew Wheeler said in a statement.

"At the EPA, we are delivering on that promise by following the rule-of-law and ensuring 15 billion gallons are blended into the nation's fuel supply."

The EPA has yet to decide the fate of 31 pending waiver requests for 2019 and 2020, but the announcement ends what has been an agonizing period for the ethanol and agriculture industries. The ethanol industry stood to lose billions of gallons of fuel demand had the waivers been granted.

"Time and time again, EPA has demonstrated through action its commitment to our nation's farmers," EPA said in a news release.

"As promised, EPA is ensuring a net of 15 billion gallons of conventional biofuel are blended into the nation's fuel supply. EPA renewable fuel volume mandates have continued to rise in EPA's annual rulemakings, and, with it, renewable transportation fuel use in the U.S. From 2016 to 2019, domestic ethanol production increased by 2%."

In addition, the agency said in the news release it is taking steps to update E15 labels to "ensure consumers have informed choices" at the pump when it comes to expanded E15 use.

"However, much of the responsibility regarding labels falls to state agencies. EPA encourages they update them as well and stands ready to support them," EPA said. "EPA continues to actively engage with stakeholders to expand the number of approved fuel pathways, adding diversity to the biofuel mix in the United States."

Republican Iowa Gov. Kim Reynolds, who is the chief executive officer of the nation's largest ethanol-producing state, said in a statement the administration's decision comes at a good time for farmers.

"As Iowa farmers grapple with trade disruption, a global pandemic, and the aftermath of a devastating derecho, it's critical that we take action to help our ag economy," she said.

"Today's decision by the Trump administration eliminates much of the uncertainty surrounding small-refinery exemptions that undercut demand for biofuels. It's a significant step forward for Iowa's renewable fuel industry and another example of President Trump honoring his commitment to Iowa farmers."

Ernst and Sen. Charles Grassley, R-Iowa, have been calling for the administration to reject the waiver requests.

"Today's announcements will help provide more certainty to our biofuel producers, who have for too long been yanked around by the EPA, and help increase access to E15, which drives up demand for corn and ethanol," Ernst said in a statement. "The fight for Iowa's renewable fuel industry, and our farmers, is not over."

Growth Energy CEO Emily Skor said the waiver requests have weighed on the industry.

"Today's action lifts a cloud of uncertainty that has been hanging over America's farmers and biofuel producers since June," she said.

"We're grateful to farm state champions like Sen. (Joni) Ernst, (R-Iowa) who has led a bipartisan coalition of lawmakers in the House and Senate and governors across the heartland in speaking out against oil-backed efforts to dodge the law, circumvent the courts and upend markets."

American Coalition for Ethanol CEO Brian Jennings said in a statement the EPA made the right decision based on a January court ruling by the U.S. Court of Appeals for the 10th Circuit in Denver.

"Simply put, these retroactive waivers ignored the RFS statute and the 10th Circuit Court decision," he said, "so rejection of the gap-year requests is what the law and court precedent required of EPA."

RFA President and CEO Geoff Cooper said the waiver requests were an "absurd and bizarre attempt" to circumvent the court's decision.

"We wholeheartedly agree with EPA's conclusion that 'these small refineries did not demonstrate then or now that they experienced a disproportionate economic hardship from compliance with the RFS,' as such a demonstration would be impossible for these refineries to make," Cooper said.

According to recent media reports, the Trump administration may be considering providing cash payments to small refiners.

On Saturday, Trump announced in a tweet the EPA would be allowing E15 to be sold in existing E10 pump infrastructure. The agency has not yet made an official announcement.

Based on agency numbers, just seven small refineries qualified for small-refinery exemptions.

On Jan. 24, the U.S. Court of Appeals for the 10th Circuit in Denver ruled EPA didn't have the authority to issue small-refinery exemption extensions to three companies that were not originally granted waivers in 2017 and 2018.

The court also found EPA "abused its discretion" by not explaining its conclusion that a small refinery could suffer disproportionate economic hardship while also maintaining refiners passed on RFS compliance costs to consumers at the pump.

Congress allowed EPA to extend some small-refinery exemptions temporarily.

From 2007 through 2010, 59 small refineries received waivers. The U.S. Department of Energy then examined the 59 waivers and determined that 24 of them could be extended for another two years.

In 2011 and 2012, the number of exemptions was whittled down to eight, then down to seven in 2015. Then, from 2016 to 2018, the agency granted 85 exemptions.

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

Follow him on Twitter @toddneeleyDTN

blog iconDTN Blogs & Forums
DTN Market Matters Blog
Editorial Staff
Friday, September 18, 2020 11:24AM CDT
Thursday, September 17, 2020 3:22PM CDT
Monday, September 14, 2020 12:12PM CDT
Technically Speaking
Editorial Staff
Monday, September 14, 2020 11:21AM CDT
Tuesday, September 8, 2020 8:58AM CDT
Monday, August 31, 2020 10:58AM CDT
Fundamentally Speaking
Joel Karlin
DTN Contributing Analyst
Thursday, September 17, 2020 10:24AM CDT
Friday, September 4, 2020 8:58AM CDT
Tuesday, September 1, 2020 10:20AM CDT
DTN Ag Policy Blog
Chris Clayton
DTN Ag Policy Editor
Friday, September 18, 2020 3:03PM CDT
Thursday, September 17, 2020 10:21PM CDT
Thursday, September 17, 2020 7:06AM CDT
Minding Ag's Business
Katie Behlinger
Farm Business Editor
Thursday, August 27, 2020 9:04AM CDT
Tuesday, May 19, 2020 8:02PM CDT
Thursday, March 19, 2020 12:08PM CDT
DTN Ag Weather Forum
Bryce Anderson
DTN Ag Meteorologist and DTN Analyst
Friday, September 18, 2020 2:25PM CDT
Tuesday, September 15, 2020 11:46AM CDT
Monday, September 14, 2020 1:21PM CDT
DTN Production Blog
Pam Smith
Crops Technology Editor
Friday, September 18, 2020 1:52PM CDT
Friday, September 11, 2020 11:41AM CDT
Friday, September 4, 2020 4:35PM CDT
Harrington's Sort & Cull
John Harrington
DTN Livestock Analyst
Monday, September 14, 2020 10:25AM CDT
Wednesday, September 2, 2020 4:01PM CDT
Tuesday, September 1, 2020 9:12AM CDT
South America Calling
Editorial Staff
Tuesday, September 15, 2020 3:19PM CDT
Wednesday, September 9, 2020 2:04PM CDT
Thursday, August 27, 2020 11:54AM CDT
An Urban’s Rural View
Urban Lehner
Editor Emeritus
Thursday, September 10, 2020 2:43PM CDT
Tuesday, September 1, 2020 3:53PM CDT
Wednesday, August 19, 2020 10:49AM CDT
Machinery Chatter
Dan Miller
Progressive Farmer Senior Editor
Thursday, September 17, 2020 3:19PM CDT
Friday, September 11, 2020 12:26PM CDT
Thursday, September 3, 2020 2:10PM CDT
Canadian Markets
Cliff Jamieson
Canadian Grains Analyst
Friday, September 18, 2020 2:59PM CDT
Thursday, September 17, 2020 2:57PM CDT
Wednesday, September 16, 2020 3:27PM CDT
Editor’s Notebook
Greg D. Horstmeier
DTN Editor-in-Chief
Friday, September 4, 2020 3:48PM CDT
Thursday, August 13, 2020 11:42AM CDT
Monday, June 29, 2020 1:35PM CDT
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN