Advanced BioFuels USA

by Jeff Barber (Opis Biofuels News) The U.S. ethanol industry, which spent most of 2018 dealing with the fallout from EPA’s decision to allow a record number of small refineries to escape their Renewable Fuel Standard (RFS) compliance obligations, believes the agency will take a more measured approach to exemption requests this year.

“We are hopeful and we are expecting that [acting EPA Administrator Andrew] Wheeler will be a little more restrained and judicious” in granting small-refinery exemptions (SREs), Geoff Cooper, president and CEO of the Renewable Fuels Association (RFA), said in an interview last week.

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EPA last year launched a web-based dashboard that provides, among other things, exempted volumes of gasoline and diesel for each compliance year, the number of SRE petitions received, granted and denied.

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And he highlighted EPA’s promise to make public any decision to grant a small-refinery waiver at the same time the applicant is notified, giving them knowledge that others trading in the Renewable Identification Number (RIN) market did not have.

“I think that’s crucially important because under Pruitt, refiners receiving exemptions were notified before any other market participants had that knowledge. In any other market, I think we’d call that insider trading and I think EPA realized that practice was problematic and left it vulnerable.”

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 “Other market participants and the public need to know exactly who is receiving these exemptions and why. If refiners feel that the exemptions are justified, then they should have no problems with public disclosure. And if they have nothing to be ashamed of, then they should be okay with the public knowing they got an exemption.”

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“If high RIN prices were the justification for the surge in SREs, then that justification is long gone.  …”

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“We faced a number of significant trade barriers and restrictions that are keeping our product out of several key markets and China would be at the top of that list,” Cooper said.

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“Everything we hear and learn is that China really does want to increase its use of ethanol and it remains committed” to moving to a national E10 blend. Will that happen by 2020 as originally intended? I don’t think so, but they do remain focused on that objective.”

To achieve the E10 blend rate, Cooper said, China would need 3.5 billion gallons of ethanol each year. The country “seems to understand that ethanol can definitely help with their air quality concerns, provide a boost to their ag sector and help them manage surpluses of grain commodities.”

And while Cooper said China wants to meet much of the expected additional demand for ethanol with domestic production, he said officials “seem to understand that some imports would be necessary and beneficial.

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2018 also marked the first full year that U.S. ethanol exports to Brazil were subject to a 20% tariff on sales above an annual quota of 600 million liters (158.5 million gal).  READ MORE

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