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RFA Study Shows Small Refineries’ Waivers Have Lowered Ethanol Production 6%


EPA’s recent actions in exempting small refineries from their Renewable Fuel Standard blending obligations for 2016 and 2017 have effectively lowered the volumetric obligations by at least 1.6 billion gallons, according to an analysis of the agency’s own monthly compliance data by the Renewable Fuels Association. The volume of lost blending obligations for these two years is 10 times the collective volume of lost volume from 2013-2015.

In recent weeks, it’s been widely reported that EPA has exempted as many as 25-30 small refineries from their RFS blending obligations in 2017, and as many as 20 refineries from their 2016 obligations. Despite numerous requests from industry stakeholders, including RFA, and lawmakers for additional information, EPA has not disclosed the exact number of exemptions granted or the volume of required renewable fuel blending that was effectively erased.

However, recently updated data found in EPA’s EMTS database provides some clarity on the volume of gasoline and diesel fuel that was exempted from blending requirements in 2016 and 2017. “The EPA data strongly imply that small refiner exemptions have resulted in effectively lowering the 2017 required volume of renewable fuels by 1.11 billion gallons, or 6%. The data also show that small refiner exemptions also effectively reduced the 2016 RFS requirement by 523 million gallons,” according to the analysis.

Based on EPA’s EMTS database, the actual annual consumption of gasoline and diesel fuel in 2013-2015 was very close to the volume of gasoline and diesel fuel obligated for RFS compliance, as reported by obligated parties. “This means RFS blending obligations applied to virtually every gallon of gasoline and diesel fuel produced and consumed in the United States,” the analysis explained. “However, something clearly changed in 2016 and 2017.

The EPA data show large discrepancies between actual gasoline and diesel consumption and the volumes obligated for renewable fuel blending as reported by obligated parties. The difference was 5.2 billion gallons in 2016, virtually doubling to 10.3 billion gallons in 2017. The only reasonable explanation for these large discrepancies between actual gasoline/diesel consumption and the volume of gasoline/diesel obligated for renewable fuel blending is the surge in small refiner exemption approvals,” the analysis found.

“This analysis, based by EPA’s own data, confirms our concerns and sheds light on the scope and magnitude of Administrator Pruitt’s campaign to undermine the RFS,” said RFA President and CEO Bob Dinneen. “While EPA refuses to publicly confirm the details surrounding the numerous small refiner waivers it has issued, this data speaks for itself, showing the demand destruction that has resulted from Administrator Pruitt’s secret small refiner bailouts.

Combined with the PES bankruptcy settlement and EPA’s failure to enforce the 2016 RVO as remanded by the courts, Administrator Pruitt’s actions have erased demand for more than 2 billion RINs. These moves are hurting America’s biofuel producers, farmers, and ultimately consumers, and they stand in direct opposition to President Trump’s commitment to protect the RFS.”

To view the RFA analysis, click here.

Source: AgriMarketing

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