Oil report

FACTBOX-Ethanol, oil groups criticize U.S. biofuels plan; biodiesel industry cheers

NEW YORK, June 26 (Reuters) - The U.S. Environmental Protection Agency (EPA) on Tuesday proposed a 3 percent increase in total renewable fuel volume requirements for next year, sparking criticism from some ethanol and oil groups and cheers from U.S. biodiesel producers.

Below are comments on the proposal, which the EPA is required to finalize by Nov. 30. ADVANCED BIOFUELS BUSINESS COUNCIL

“On its face, the EPA proposal is promising. It reverses last year’s roll back of cellulosic biofuels, and it opens growth opportunities for advanced producers who are establishing new revenue streams for rural America. But until there is some check on the EPA’s abuse of waivers, regulatory uncertainty will continue to threaten investments in advanced biofuels,” said Brooke Coleman, executive director.


“EPA made the right call in not reallocating the waived small refiner exemption volumes, however the agency’s latest proposal for 2019 is yet another example – in fact it’s an annual example of a broken government program that needs a comprehensive legislative solution that includes the sunset of the program,” said Downstream Group Director Frank Macchiarola.

“The RFS is a backward-looking policy that doesn’t reflect today’s energy market realities of strong domestic energy production.”


“We welcome EPA’s decision to raise the advanced and cellulosic biofuel volumes in its proposal, which will help propel the industry forward in 2019. However, the advanced biofuels industry is still suffering the effects of the Agency’s decision to arbitrarily limit growth for low carbon biofuels in 2018, by setting a backward looking RFS requirement. The 2019 volumes should be higher, to correct from last year and also spur growth for the coming year,” said Executive Vice President Brent Erickson. JONI ERNST, REPUBLICAN SENATOR FROM IOWA

“As the state that leads the nation in renewable fuels production, Iowa farmers deserve honesty and transparency from the EPA on the Renewable Fuel Standard (RFS). The proposed uptick in the amount of renewable fuel that refiners blend into transportation fuel is encouraging, but does not make up for about 1.5 billion gallons lost by Administrator Pruitt’s decision to hand out an unprecedented number of small refinery waivers.” GROWTH ENERGY

“The EPA proposed 15 billion gallons for conventional biofuels, but that still isn’t a real number we can count on. This plan fails to ensure those gallons will, in fact, be blended. By neglecting to reallocate gallons lost to waivers, the EPA is doubling down on another year of an estimated 1.5 billion gallons in demand destruction,” said Chief Executive Officer Emily Skor. IOWA RENEWABLE FUELS ASSOCIATION

“This is a status quo proposal for ethanol and the status quo is bad,” said Executive Director Monte Shaw. “The ethanol number isn’t worth the paper it’s written on so long as Scott Pruitt is granting small refinery exemptions left and right – even beyond what the Department of Energy recommends.” NATIONAL BIODIESEL BOARD

“We welcome the administration’s proposal to grow the biodiesel volumes, following two flatlined years. This is a positive signal for our industry and we’re pleased the EPA has acknowledged our ability to produce higher volumes. We’ve consistently demonstrated that we can do much more,” said Kurt Kovarik, vice president of federal affairs.


“It is promising that the EPA is planning to increase the volume of American grown and produced fuels in our transportation sector. However, the proposal does not do enough to account for the demand destruction of over a billion gallons of renewable fuels,” said Rob Larew, senior vice president of public policy and communications.


“It would seem a hollow and cynical exercise to praise or thank EPA Administrator Pruitt for appearing to follow the statute with this proposed RVO,” said President and CEO Bob Dinneen.

“While we acknowledge that the implied 15 billion-gallon requirement for conventional biofuels like corn ethanol should, in theory, send a positive signal to the market, it comes with the backdrop of 1.6 billion gallons of demand destructed by illegal waivers to small refineries and no commitment that EPA is changing its approach to granting these exemptions.”

Reporting by Chris Prentice; Editing by Lisa Shumaker