Today's SRE Denials and RFS Proposals a "Modest Step in the Right Direction"
Aside from an unprecedented proposal to retroactively reduce already-finalized 2020 Renewable Fuel Standards (RFS) requirements, the package of RFS proposals released today by the U.S. Environmental Protection Agency represents a modest step in the right direction for the nation’s ethanol producers and farmers, according to the Renewable Fuels Association.
Specifically, RFA welcomes EPA’s proposal to set the 2022 RFS conventional renewable fuel requirement at the statutory volume of 15 billion gallons (bg) and its move to deny all pending small refinery exemption (SRE) petitions based on the unappealed holdings of the Tenth Circuit Court’s decision in the Renewable Fuels Association et al. v. EPA. The agency also said it will follow the Court’s ruling when it considers future SRE petitions. EPA’s proposal to restore 500 million gallons of illegally waived RFS requirements from 2016 —with that volume being added in the form of supplemental requirements to the 2022 and 2023 RFS requirements—also drew praise from RFA.
“Over the past four years, RFA has led the charge to stop the previous EPA’s illegal abuse of the small refinery waiver provision,” RFA President and CEO Geoff Cooper said. “We commend EPA Administrator Michael Regan and the Biden administration for denying all pending small refinery exemptions, and we are extremely pleased to see the Agency shutting the floodgates on these destructive waivers. Under the previous administration, these exemptions destroyed demand for more than 4 billion gallons of renewable fuel, resulting in higher fuel prices for the consumer, increased GHG emissions, and lower farm income. Today’s announcement should finally put an end to the rampant abuse of the exemption program that we experienced under the last administration.”
RFA was also pleased to see EPA’s proposal to bring more transparency to the SRE process by requiring public disclosure of certain information that has previously been treated as confidential business information—something for which the association has been advocating for many years.
Unfortunately, today’s package also seeks to cut the 2021 conventional renewable fuel requirement to just 13.32 bg, representing EPA’s view of actual consumption. In addition, EPA is proposing to reopen the already-finalized 2020 RVO and reduce the requirement from the original volume of 15 bg to just 12.5 bg, again reflecting EPA’s estimate of actual consumption. During the public comment period on these proposals, RFA will provide data and analysis to demonstrate why these proposed volumes are far too low.
“While we are pleased to see that EPA’s proposal for 2022 is consistent with Congressional intent to require 15 billion gallons of conventional renewable fuels like corn ethanol, it would be completely unprecedented—and contrary to EPA’s past policies and practices—for the agency to go back in time and revise the 2020 RFS requirements. We don’t believe a retroactive reduction of this nature is legally permissible,” Cooper said. “The 2020 volumes were finalized nearly two years ago. Revising them now would undermine investment, create uncertainty, and go against EPA’s long-standing position that it does not have the authority to change RVOs once they are finalized.”
“We recognize that the previous administration left the RFS program in total disarray when it departed Washington, and today’s package from EPA marks an important step toward finally putting the RFS back on track,” Cooper said. “However, today’s proposals do not quite get us all the way there, and more work is needed to ensure the RFS drives maximum growth in the production and use of low-carbon renewable fuels. RFA and our allies in the farm community will engage with EPA and actively pursue improvements to these proposals during the public comment period.”
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