Klobuchar, Colleagues Urge Schumer, Pelosi to Support Homegrown Renewable Fuels in Reconciliation Package

September 03, 2021

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(Office of Amy Klobuchar (D-MN)) U.S. Senators Amy Klobuchar (D-MN), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Tina Smith (D-MN), and Dick Durbin (D-IL) and Representatives Cindy Axne (D-IA), Angie Craig (D-MN), Cheri Bustos (D-IL), and Mark Pocan (D-WI) sent a letter to Senate Majority Leader Chuck Schumer (D-NY) and Speaker of the House Nancy Pelosi (D-CA) urging them to include support for homegrown renewable fuels in the upcoming reconciliation package.

“Providing additional market access for higher blends of low carbon fuels in the budget reconciliation process will create jobs in rural communities, lower the price of fuel for consumers at the pump, reduce our dependence on fossil fuels, and, most importantly, decrease carbon emissions,” the legislators wrote.

They continued later in the letter: “We know that the climate crisis is happening right now and we need to confront it with a sense of urgency. Our goal is to decarbonize our transportation sector through an all-hands-on-deck approach that includes investment and incentives for both electric vehicles (EVs) and homegrown renewable fuels.”

The legislators specifically asked Schumer and Pelosi to consider including the Biofuel Infrastructure and Agricultural Product Market Expansion Act, Consumer and Fuel Retailer Choice Act, Low Carbon Biofuel Credit Act, Clean Fuels Vehicle Act, Biodiesel Tax Credit Extension Act, and enacting a long-term extension of the Second Generation Biofuel Producer Tax Credit in the budget legislation.

Full text of the letter can be found HERE and below.

Dear Leader Schumer and Speaker Pelosi:

We write to respectfully urge you to make sure that the upcoming budget legislation currently being drafted includes support for homegrown renewable fuels. Providing additional market access for higher blends of low carbon fuels in the budget reconciliation process will create jobs in rural communities, lower the price of fuel for consumers at the pump, reduce our dependence on fossil fuels, and, most importantly, decrease carbon emissions.

Recent studies from the U.S. Department of Agriculture (USDA) and Harvard and Tufts Universities have demonstrated that using renewable fuels to displace fossil fuels reduces greenhouse gas emissions between 39 and 46 percent. When including on-farm adoption of climate-smart conservation practices, such as cover crops, no-till, or precision technologies, and improvements in biorefineries, emissions could be reduced by 70 percent over gasoline by 2022. Biodiesel producers are making fuels that emit as much as 89 percent less greenhouse gas compared to petroleum based diesel.

We know that the climate crisis is happening right now and we need to confront it with a sense of urgency. Our goal is to decarbonize our transportation sector through an all-hands-on-deck approach that includes investment and incentives for both electric vehicles (EVs) and homegrown renewable fuels. The above studies confirm that renewable fuels can play a complementary role to EVs, immediately cut carbon emissions, and help meet our new commitment under the Paris Climate Agreement to reduce emissions by 50 – 52 percent by 2030.

In the budget reconciliation process, we ask you to consider the following bipartisan proposals that will strengthen the production and sale of homegrown renewable fuels and allow them to play a significant role in supporting a greener economy.

Biofuel Infrastructure and Agricultural Product Market Expansion Act (S.2271/H.R.1542): Fuel retailers want to offer smarter fuel options to their customers and consumers want to purchase lower cost and more environmentally friendly fuel, but a lack of federal investment has prevented them from moving forward. This legislation would provide for the installation of new fuel pump infrastructure to deliver ethanol blends greater than 10 percent and biodiesel blends greater than 20 percent. This sorely needed federal investment in renewable fuel infrastructure will allow small businesses across the nation to provide cleaner, more affordable, and lower emission options to American drivers.

Consumer and Fuel Retailer Choice Act (S.2339/H.R.4410): In 2019, the Environmental Protection Agency (EPA) finalized a rule to extend a Reid Vapor Pressure (RVP) volatility waiver to fuel blends with 15 percent ethanol (E15). The rule allowed for an open marketplace with more fuel options for consumers while encouraging competition and driving down fuel costs. E15 has been proven to lower evaporative and tailpipe emissions when compared to 10 percent ethanol fuel. Unfortunately, a July D.C. Circuit court ruling vacated EPA’s final rule. This legislation would make permanent the ability of retailers to sell E15 year-round.

Low Carbon Biofuel Credit Act (S.2262/H.R.4254): Federal tax incentives – along with the Renewable Fuel Standard (RFS) – have been critical in the development of homegrown renewable fuels. This legislation would build upon previous renewable fuel tax incentives by establishing a low carbon fuel tax credit to incentivize ethanol blends of 15 percent or greater in the marketplace, which will reduce emissions, diversify our fuel supply, and provide for rural economic development.

Clean Fuels Vehicle Act (S.2267): The ability of renewable fuels to decarbonize liquid transportation fuels has been constrained due to the fact that roughly 90 percent of the vehicles on the road today are legally approved to use only E15 or less. The production of flex fuel vehicles (FFVs) – vehicles capable of utilizing higher blends of ethanol like E85 – peaked in model year 2014 at 2.8 million vehicles and fell to just 716,000 for model year 2019. This legislation would incentivize Original Equipment Manufacturers (OEMs) to manufacture FFVs for the market by offering a $200 tax credit and restoring Corporate Average Fuel Economy (CAFE) credits for FFV production. The more renewable fuel that can be utilized in the light duty vehicle fleet, the lower the carbon emissions and better the air quality will be for all Americans.

Biodiesel Tax Credit Extension Act (S.1806/H.R.3472): The domestic growth in production of biodiesel has been spurred through the biodiesel tax credit. After the 2019 extension of the credit, production grew more than 150 million gallons despite headwinds from coronavirus related market challenges. This legislation would extend the current federal biodiesel tax credit through 2025. The U.S. Department of Energy has noted that when used as a vehicle fuel, biodiesel offers considerable greenhouse gas emissions benefits, including a lifecycle analysis for 100 percent biodiesel (B100) that showed a 74 percent reduction in emissions as compared to petroleum diesel.

Finally, we also support enacting a long-term extension of the Second Generation Biofuel Producer Tax Credit (§40(B)), which expired in 2020. This $1.01 per gallon credit will help increase the production of advanced biofuels that cut carbon emissions between 70 and 126 percent.

We believe Congress can and should do more to ensure support for homegrown renewable fuels. We encourage you to include these provisions in the upcoming budget reconciliation package. READ MORE

MIDWEST DEMOCRATS WANT BIOFUELS INCLUDED IN RECONCILIATION (Brownfield Ag News)

Growth Energy Applauds Democrat Effort to Include Biofuels in Budget Process (Growth Energy)

Ethanol Coalition Thanks Lawmakers Advocating For Renewable Fuels in Reconciliation Package (GrainNet)

Budget Reconciliation Measure Should Include Federal Climate Smart Agriculture Investments (Solutions from the Land)

Midwest Democrats Urge Leaders To Boost Biofuels In Reconciliation Bill (Inside EPA)

Billion for Biofuels in Build Back Better Bill (Energy.Agwired.com)

Rep. Axne Secures $1,000,000,000 for Biofuel Infrastructure in House’s Build Back Better Act (Office of Representative Cindy Axne (D-IA 3rd)

Feenstra pushes for biofuels in massive spending bill -- Two of his amendments passed, two others failed (The Messenger)

REAP Funding an ‘Economic Shot in the Arm for Rural America’ -- Build Back Better Budget Reconciliation bill adds $2.56 billion over 10 years for farmers, ranchers and rural small businesses to be part of climate solutions (Environmental Law and Policy Center)

Ag Policy Blog: House Ag Committee Spars in Partisan Fight Over Budget Reconciliation Package (DTN Progressive Farmer)

Toyota, Honda oppose U.S. House electric vehicle tax plan (Reuters)

House Ag Committee advances $1B for biofuel infrastructure (Ethanol Producer Magazine)

As the largest-ever U.S. climate bill inches forward, a lobbying frenzy ensues: Biden and his deputies make the case for massive spending on climate action as fires and floods continue across the country (Washington Post)

Sen. Thune Criticizes Democrat Agenda (Energy.AgWired.com; includes AUDIO)

Excerpt from Growth Energy: Background

Budget reconciliation is a parliamentary process that allows budget-related issues, including significant spending and government funding measures, to bypass the filibuster in the Senate and become law with a simple majority in both chambers and signature from the President.

The Biofuel Infrastructure and Agricultural Product Market Expansion Act (S. 2271), introduced by Senators Klobuchar and Ernst (R-Iowa), would provide $1 billion over 10 years to the U.S. Department of Agriculture (USDA) to expand the sales of low-carbon biofuels. The House version is the Renewable Fuel Infrastructure Investment and Market Expansion Act (H.R. 1542), introduced by Representative Axne (D-Iowa).

The Consumer and Fuel Retailer Choice Act (S. 2339) was introduced by Senators Deb Fischer (R-Neb.), Amy Klobuchar (D-Minn.), and Tammy Duckworth (D-Ill.) to ensure the continued availability of low-carbon fifteen percent ethanol fuel blends (E15) in all fuel markets year-round. The House version is the Year-Round Fuel Choice Act (H.R. 4410), introduced by Representatives Angie Craig (D-Minn) and Adrian Smith (R-Neb).

The Low Carbon Biofuel Credit Act (S. 2262), introduced by Sen. Klobuchar and Sen. John Thune (R-SD) would provide retailers and fuel blenders a direct incentive to offer higher ethanol blends, including a 5-cent tax credit for each gallon of E15 sold, and 10 cents for each gallon containing more than 15 percent of lower-carbon ethanol. The House version is H.R. 4254, introduced by Representatives Cindy Axne and Adrian Smith.

The Clean Fuels Vehicle Act, also introduced by Sens. Klobuchar and Ernst, would provide an automotive incentive for every flex-fuel vehicle (FFV) manufactured. FFVs are needed as more gas stations around the nation are providing greater access to higher blends of ethanol like E85, a low-carbon and low-cost fuel.

The Biodiesel Tax Credit Extension Act (S.1806) introduced by Senator Grassley (R-Iowa) and Senator Cantwell (D-Wash.) would extend the current federal biodiesel tax credit through 2025. The House version, H.R.3472 was introduced by Rep. Cindy Axne.

Late last year, CEO Emily Skor called on Congress to extend the Section 40 Second Generation Biofuel Producer Tax Credit, a credit per gallon of second-generation biofuel that, according to Skor, “provides an essential incentive for our biofuels industry to produce a low-carbon, renewable fuel which keeps our rural communities afloat”. READ MORE

Excerpt from Solutions from the Land: A roadmap released last year by the North America Climate Smart Agriculture Alliance (NACSAA), a multi-stakeholder platform facilitated by SfL, outlined multiple agricultural pathways to effectively address the changing climate. Equally important are NACSAA’s Guiding Principles for shaping climate change and food system policy.

As Congress takes up the proposed $3.5 trillion dollar budget reconciliation measure, we urge policy makers to include funding and enabling authority for critically needed conservation, technical assistance and clean energy programs, water management and infrastructure investments, carbon pricing mechanisms and ecosystem service payment programs; as well as investments in integrated science research on climate risks, adaptation innovations, and the economic value and effectiveness of CSA production practices.

Ida is yet another call to action. With sound climate smart agriculture enabling polices, investments and markets, those who work the land can deliver solutions to climate, food system, energy and national security challenges. Who in Congress will help agriculture respond to these existential threats? READ MORE

Excerpt from The Messenger: ”Since President Biden has completely failed to live up to his promise to promote and advance biofuels, I took matters into my own hands,” Feenstra said in a written statement.

”I am pleased that my colleagues on this committee adopted my amendments that will ensure biofuels are finally included in President Biden’s bloated budget bill,” he added. ”I will continue fighting to deliver results for corn and soybean growers and biofuels producers in the Fourth District and across America’s heartland.”

The first amendment that Feenstra got approved adds biofuels to the list of bioenergy technologies the U.S. Department of Energy will develop and demonstrate. That means money from the department can be spent on advanced biofuel projects.

The other amendment directs NASA to include biofuels in its research into sustainable aviation fuels.

Both amendments were passed unanimously by the House Science, Space and Technology Committee. READ MORE

Excerpt from DTN Progressive Farmer: Separately, different groups are highlighting provisions in the Build Back Better Act that benefit their industries. The National Biodiesel Board, for instance, highlighted a proposed extension of the biodiesel and renewable diesel blenders tax credit through 2031 in the House Ways & Means Committee portion of the bill.

"The biodiesel tax credit continues to be extremely successful in expanding consumer access to these clean, low-carbon fuels while driving economic growth and job creation," said Kurt Novarik, NBB's vice president of federal affairs.

Politico also reported Friday that Ways & Means also will include a tax credit to help boost sustainable aviation fuel. The credit would start at $1.50 a gallon for blenders that supply fuel with at least 50% lower emissions than petroleum-based jet fuel. That comes after the Biden administration had announced a goal on Thursday to reach at least 3 billion gallons of sustainable aviation fuels by 2030. The biofuels industry sees a major expansion of renewable aviation fuels as a potential boon for the industry going forward.

"Ethanol has a decades-long proven track record for reducing greenhouse gas emissions from motor vehicles, and we are confident that ethanol will play a central role in cleaning up aviation fuels as well," said Geoff Cooper, president and CEO of the Renewable Fuels Association after the Biden administration announcement. READ MORE

Excerpt from Washington Post: Raising money to fund the plan is equally complicated.

One is a fee forcing natural gas producers to pay for leaks of methane, a potent greenhouse gas, that exceed a very low threshold. Although many climate policy experts prefer a broader carbon tax, a methane fee wouldn’t boost the price of gasoline, removing a point of friction.

...

But the American Petroleum Institute — which has endorsed the idea of taxing carbon in exchange for loosening federal regulation on the oil and gas industry — calls the methane fee “punitive.” Frank Macchiarola, API’s senior vice president of policy and regulation, said in a statement that it “would be duplicative on top of federal regulations.”

Democrats also hope to raise revenue through a carbon border adjustment fee,which would collect tens of billions from foreign companies whose exports to the United States are carbon-intensive. During the 2020 campaignBiden endorsed the proposal, which would affect China and other producers. But it would probably result in higher consumer prices for imports.

The package is also likely to include popular items such as a tax credit for purchasing electric vehicles. Restoring and expanding the $7,500 tax credit for buying EVs, for example, would help meet the administration’s goal of phasing out sales of gas-powered cars and trucks by 2035.

...

The Ways and Means Committee markup would eliminate the credit for sedans costing more than $56,000 and for very wealthy Americans. Lawmakers are also considering providing an additional $5,000 for U.S.-made and union-made cars.

One potential problem, however, is that about half of Americans do not owe any taxes. READ MORE

Excerpt from Energy.AgWired.com: Sen. Thune (Senator John Thune (R-SD)) also criticized Democrats for focusing on electric vehicles at the expense of biofuels when it comes to climate policy and manipulating farm policy.

“Democrats have picked their preferred winner in the clean energy stakes – electric vehicles,” Thune said. “Biofuels take a back seat in Democrats’ legislation, despite the essential role they have played in making American energy cleaner – and despite the significance of biofuels to the rural economy.” READ MORE; includes AUDIO

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Legislation-Federal climate legislation Agricultural Policy energy policy economic policy environmental policy Transportation Fuels Policy Electric Car/Electric Vehicle (EV) Department of Agriculture (USDA) GHG (Greenhouse Gas Emissions) climate smart/conservation agriculture markets/sales market forces Fuel Retailers retail blender pumps E15 pumps ethanol pumps pumps/fueling station B20 biodiesel pumps Reid vapor pressure (RVP) E20 pumps E25 pumps E30 pumps E85 pumps Renewable Fuel Standard (RFS and RFS2) LCFS (Low Carbon Fuel Standard) tax policy tax credits biofuel tax credit flex-fuel vehicles (FFV) Corporate Average Fuel Economy (CAFE) standards F Factor ethanol/bioethanol biodiesel B100 cellulosic production tax credit Sustainability biodiesel tax credit Blenders Credit renewable diesel tax credit Aviation Fuel/Sustainable Aviation Fuel (SAF)

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