EPA Denies Gap Year RFS Waiver Requests

September 14, 2020

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by John Herath (Farm Journal Ag/Web) Applications for oil refiners to be exempted from the Renewable Fuels Standard (RFS) have been a contentious election for President Donald Trump in Iowa. His administration took a step to alleviate those political pressures Monday by denying so-called “gap year” waiver requests.

The 10th Circuit Court ruled that the requests, or small refinery exemptions, could only serve as extensions of previous requests dating back to 2011, not new requests. Consequently, refiners filed 68 new petitions for RFS waivers to fill those gap years where they did not seek exemptions.

EPA’s order says any application where the Department of Energy (DOE) determined a refiner should receive no relief or 50% relief would be denied. According to industry association Growth Energy, the denial covers 54 gap year waiver requests where the DOE had rendered an opinion. There are 14 additional gap year requests still awaiting a DOE evaluation.

“Today’s action lifts a cloud of uncertainty that has been hanging over America’s farmers and biofuel producers since June,” said Growth Energy CEO Emily Skor. “We’re grateful to farm state champions like Senator Joni Ernst (R-IA), 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.”

“We are pleased to see EPA is officially denying 54 so-called ‘gap-year’ small refinery exemption petitions, and we look forward to EPA similarly denying the remaining 14 petitions once they are received from DOE," added Renewable Fuels Association President and CEO Goeff Cooper. "Rejecting the petitions is simply the right thing to do, and today’s decision marks a big step forward toward fully restoring integrity to the Renewable Fuel Standard. This should serve as the final nail in the coffin of these gap-year petitions, and we are eager to put this dark and sordid chapter in the history of the RFS behind us once and for all." READ MORE

RFA Pleased with EPA’s Official Denial of ‘Gap Year’ Waiver Petitions (Renewable Fuels Association) Link to audio sound bite 1:20

SREs hurt biodiesel as much as ethanol (KRVN)

IN DENIAL: (Politico's Morning Energy)

EPA Takes Action to Protect Integrity of the Renewable Fuel Standard Program, Support American Farmers (Environmental Protection Agency)

Trump Considers Cash Aid for Refineries Denied Biofuel Waivers (MSN Money/Bloomberg)

EPA delivers win for ethanol industry angered by waivers to refiners (The Hill)

EPA rejects quota reductions in victory for corn farmers, ethanol producers (Star Tribune)

EPA Denies All 67 Gap-Year RFS Waivers -- Trump Administration Rejects Retroactive Small-Refinery Exemption Requests (DTN Progressive Farmer)

EPA denies 54 gap year waivers (RFD TV)

RFD-TV Interview on Brazil, Gap-Year Waivers (Renewable Fuels Association; includes VIDEO)

Some praise EPA ethanol waiver denials, others wary (Everything Lubbock; includes VIDEO)

Ethanol Blog: Grassley: 'Trump Takes RFS Exemptions Issue Off Political Table' (DTN Progressive Farmer)

Good news for biofuels: EPA takes action to deny waiver requests by oil refiners who want to avoid RFS blending requirements. (Wallace's Farmer)

MORE WORK TO BE DONE IN BIOFUEL INDUSTRY (Brownfield Ag News)

With rural voters' support at risk, Trump administration backs most ethanol mandates (The Hawk Eye)

EPA provides welcome news to Iowa corn growers: Denial of waivers is expected to increase demand for the crop (The Messenger)

Excerpt from Politico's Morning Energy: In his denial letter, Administrator Andrew Wheeler said he rejected the 54 petitions largely on the advice of the Energy Department, which determined that the refineries did not suffer much hardship in the years in question. While the letter did mention a U.S. Court of Appeals for the 10th Circuit ruling from January that voided three refinery exemptions from the biofuel blending rules, Wheeler did not cite the court's opinion as part of his reasoning.

The Trump administration's handling of the biofuels waivers has become a major flashpoint in GOP Sen. Joni Ernst's reelection race in Iowa. "I've been calling for these 'gap year' waivers to be thrown out since they were announced," Ernst said in a statement Monday. "Now, the administration has listened to our calls for action." A spokesperson for Ernst's opponent Theresa Greenfield, who has called for Wheeler's resignation, said the announcement "does nothing to erase the massive economic damage in Iowa caused by Senator Ernst's vote for a fossil fuel lobbyist to run the EPA."

Elsewhere, oil-state Sen. Ted Cruz (R-Texas) said the decision, on top of the Justice Department's decision not to appeal the 10th Circuit ruling, "all but sounded the death knell on the small refinery exemption program and the thousands of blue collar jobs it helped protect." READ MORE

Excerpt from Environmental Protection Agency: Today (September 14, 2020), the Trump Administration reaffirmed its commitment to support America’s farmers by moving forward to review and adjudicate petitions for small refinery exemptions under the Renewable Fuel Standard (RFS) Program. The U.S. Environmental Protection Agency (EPA) is denying petitions for small refinery exemptions for past compliance years, the so-called “gap-filling” petitions for the 2011-18 compliance years.

“This decision follows President Trump’s promise to promote domestic biofuel production, support our nation’s farmers, and in turn strengthen our energy independence,” said EPA Administrator Andrew Wheeler. “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.”

Time and time again, EPA has demonstrated through action its commitment to our nation’s farmers. 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 in increased by 2 percent. Additionally, as promised, EPA eliminated a significant barrier to E15 market access, and E15 is now used in 30 states at over 2,000 stations. As a next step, EPA is moving to update E15 labels to ensure consumers have informed choices at the pump and clarify the ability of existing fuel infrastructure to support 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 continues to actively engage with stakeholders to expand the number of approved fuel pathways, adding diversity to the biofuel mix in the United States.

Background

The Clean Air Act requires EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic, and biomass-based diesel. EPA implements the RFS program in consultation with the U.S. Department of Agriculture, the U.S. Department of Energy, and consistent with the Clean Air Act. EPA’s longstanding interpretation of the Clean Air Act allows for the granting of a petition for exemption from blending requirements under the RFS program for the reason of demonstrated, disproportionate economic hardship. READ MORE