The competing interests of Big Oil and agriculture are not new. Big Oil has opposed growth of the ethanol industry in the U.S. for decades because it impacts their bottom line. But the stakes for biofuels’ success and increasing the domestic market for corn is growing, when trade and weather have impacted farms and farmers across the Midwest.
The biofuels industry purchases about 40 percent of the nation’s corn annually. The recent approval of year-round E15 — a fuel blend with 15 percent ethanol, as opposed to the previous standard of 10 percent — is expected to boost the agricultural industry and drive increased demand of up to 2 billion additional bushels of corn; but the impact relies on new infrastructure and partnerships with retailers.
A key, near-term opportunity to protect the future of biofuels and rural America is supporting the Renewable Fuel Standard (RFS), which means being informed and engaged in the political process. As a farmer or biofuels supporter, your voice is critical in helping to secure the future of the industries.
Here’s an overview of what you need to know about biofuels policy today:
RENEWABLE FUEL STANDARD
The Renewable Fuel Standard (RFS) is a bipartisan, American energy policy that was signed into law in 2005 and expanded in 2007 to reduce America’s dependence on foreign oil by using more biofuels. Using more renewable fuel improves the rural economy, helps curb greenhouse gas emissions, and lowers the price for consumers at the pump.
RENEWABLE VOLUME OBLIGATIONS
As part of the RFS, the Environmental Protection Agency (EPA) sets annual blending targets, known as Renewable Volume Obligations (RVOs), for how many gallons of biofuel must be blended into the U.S. fuel supply in the year ahead. RVOs are supposed to set the annual pace to reach 36 billion gallons by 2022, but we need to hold the EPA accountable for maintaining the progression.
SMALL REFINERY EXEMPTIONS
Under the RFS, the EPA may allow certain small refiners — those with a throughput of less than 75,000 barrels per day — to petition for a temporary exemption from the RVO requirements for a given year if they can show that compliance would impose a “disproportionate economic impact.” In recent years, the EPA has undermined the intent of the RFS, choosing oil profits over farmers, by granting a record number of exemptions to some of the largest, wealthiest companies in the world. To date, EPA’s actions have caused an estimated loss of 4 billion gallons of biofuels and 1.4 billion bushels of corn demand.
Under the terms of the RFS, the EPA can reevaluate the overall biofuels blending targets if the industry doesn’t meet these targets for two consecutive years. Cellulosic production didn’t meet the targets in 2018 or 2019, so the EPA is reevaluating the targets, taking into account job creation, rural economic development, environmental benefits and other issues in the coming months.
REID VAPOR PRESSURE
This past summer, the Trump Administration announced a new rule that allowed year-round sales of E15. A change was needed to address a previous limit on evaporative emissions that was fixed for E10 but not E15. With that approval, consumers have year-round access to the clean, lower-cost fuel, and agriculture stands to benefit from an increase in ethanol demand.
The 2020 proposed RVOs do not address the gallons that have been waived through SREs. The ag and biofuels industries have been actively working with the EPA, Congress and the Administration to address these issues and turn around rural economic hardship. POET team members submitted comments to the EPA during the 2020 RVO comment period over the summer. POET and other members of the biofuel industry testified at a July 31 EPA hearing to voice concern over the proposal. We pushed for higher blending levels and asked that the EPA adjust the blending targets to account for the demand lost from previous SREs.
In recent weeks, since the announcement of 31 new SREs, POET and industry partners have been active in meeting with Members of Congress and the Administration to bring our message directly to decision makers. The Trump Administration is expected to issue a biofuel reform package soon.
In the meantime, we’re also focused on accelerating the year-round E15 rollout nationwide. POET is working on bipartisan efforts with policymakers at the state and federal level to expand blending infrastructure and incentivize more retailers to offer E15 to their customers. One initiative is working to update fuel regulations in New York, one of the few remaining states that currently prohibits sales of E15.
WE NEED YOUR HELP
Your voice matters. Elected officials want to hear from you about your everday experiences and how their policy proposals and decisions are impacting you.
Here are some ways to get involved and share your story:
1. Respond to requests for comments during annual comment periods. Follow POET’s Facebook and Twitter accounts and poet.com/policy for details on comment opportunities and how to submit.
2. Write to your congressional delegation and share the importance of biofuels. Find contact information for Representatives and Senators.
3. Share a letter to the editor with your local newspaper. Find general talking points about the benefits of biofuels at growthenergy.org in the Resources section.
4. Share the benefits of E15 with your friends and neighbors. You can visit getbiofuels.com to find E15 and higher blends at a station near you.
5. Get involved in POET PAC, POET’s political action committee. POET PAC builds strategic relationships with and educates policy leaders on issues that are important to the biofuel industry and supports candidates who will be bold champions for the biofuel and agricultural industries in Washington.