US biofuel relief package draws fire from industry
October 21, 2019
The US biofuels industry has criticised a relief package announced by the Environmental Protection Agency (EPA) on 15 October that was meant to address the large number of small refineries exempted from having to blend biofuels.
Small refinery exemptions (SREs) allow small US refineries (producing less than 75,000 barrels/day) not to blend biofuels if they can prove they are in financial strife.
Since US President Donald Trump took office in January 2017, the EPA has more than quadrupled the number of SREs it has granted, exempting 85 small producers from blending 4bn gallons (18bn litres) of renewable fuel from 2016-2018.
According to the Des Moines Register the SREs had “killed demand for 1.4bn bushels of corn used to make ethanol, and wiped out demand for 825M bushels of soyabeans that go into biodiesel”.
Some of the small refineries granted SREs are also owned by large petrochemical companies like Exxon Mobil and Chevron Corp, according to Reuters.
The EPA had said on 4 October that its biofuel relief package plan would “ensure that more than 15bn gallons (68bn litres) of conventional ethanol are blended into the nation’s fuel supply beginning in 2020”.
It released details on how it planned to calculate future SREs on 15 October.
Biomass Magazine wrote that representatives of the biofuels industry had slammed the EPA’s proposal, stressing that it fell short of the relief package previously promised by Trump.
American Coalition for Ethanol CEO Brian Jennings said that in a 3 October phone call, Trump officials had indicated that the EPA would take the three-year average of SRE volumes for 2016-2018 (about 1.34bn gallons or 6.09bn litres), and reallocate the volume to the 2020 renewable volume obligation (RVO). However, the EPA’s 15 October announcement instead proposed to calculate the average based on partial SREs that the Department of Energy had previously advised but the EPA had rejected.
Jennings said the average of those “imaginary” partial SREs was only about 770M gallons (3,500M litres).
“The ongoing insanity over the EPA’s mismanagement of the Renewable Fuel Standard would be bizzarely humourous if not for the fact that it, along with the US-China trade war and weather-related disasters, has taken a terrible economic toll on growers and biofuel producers across rural America.”
The EPA proposal supplements its pending rule on 2020 RVOs and 2021 RVOs for biomass-based diesel, which is due on 30 November.