After EPA’s administrator had vowed earlier this year to get the Renewable Fuels Standard (RFS) on track, the agency angered the biofuels industry on Thursday by announcing an indefinite delay to the release of RFt volumes and has proposed changing compliance deadlines for refiners.
EPA released a proposal that would make multiple changes to RFS compliance deadlines. The agency has set a public hearing on the proposal for Dec. 3, 2021.
EPA proposes extending the RFS compliance deadline for 2020 and 2021 compliance years for “all obligated parties.” In addition, the agency is proposing to change the annual compliance reporting deadlines for 2022 and beyond.
“The proposed extensions will help ensure that obligated parties are positioned to fully comply with their RFS obligations by ensuring that each year’s compliance deadline falls after the standards for the subsequent compliance year are known,” the agency said in a news release.
“The proposed approach for 2022 (and beyond) would also avoid EPA having to repeatedly extend compliance deadlines for obligated parties should promulgation of the subsequent year’s standards be delayed.”
The EPA earlier this year extended 2019 compliance deadlines for small refiners and all obligated parties.
DTN Lead Analyst Todd Hultman said the corn and soybean markets offered little reaction to the EPA announcement. Prices for renewable identification numbers, or RINs, however reportedly dropped on Thursday.
Oil Price Information Service founder Tom Kloza reported on Twitter that the price of RINs had fallen about 4 cents to $1.05 for ethanol and biodiesel RINs had fallen 5.5 cents to $1.36 from Wednesday’s prices.
In recent months the Biden administration reportedly was considering cuts to the RFS, as the EPA continues to look at where to set volumes following the 2020 COVID-19 economic shutdown that led to lower gasoline demand.
The latest announcement provides no indication of when EPA will propose several outstanding volumes requirements. It isn’t the first time the ethanol industry has experienced RFS delays. The Obama administration delayed volume releases in both 2014 and 2015.
The announcement was met with frustration from biofuels groups, many who had hoped the Biden administration’s approach to the RFS would be an improvement from the Trump EPA. The Trump EPA granted 88 small-refinery exemptions in four years.
The biofuels industry has essentially completed the 2021 production year, although the agency has yet to release volumes requirements for 2021 and 2020.
Earlier in November, ethanol interest group Growth Energy announced it would sue EPA within 60 days for RFS delays.
Growth Energy CEO Emily Skor said in a statement the agency’s announcement adds more uncertainty to the biofuels market.
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“EPA needs to release 2021 and 2022 RVOs (renewable volume obligations) immediately,” she said.
“Further delaying compliance deadlines for previous RVO years does nothing but contribute to ongoing uncertainty in the marketplace. Sadly, even as our country faces rising gas prices, the EPA and the Biden administration continue to give in to the loud voices of the oil industry without considering their detrimental impact on rural America.”
During his confirmation hearing, EPA Administrator Michael Regan said he wanted to put the RFS back on track and make the program more transparent.
“To do so, EPA must issue strong 2021 and 2022 RVOs and ensure that the 15-billion-gallon biofuel blending requirements are met,” Skor said. “It is past time for EPA to act.”
Renewable Fuels Association President and CEO Geoff Cooper said his group was disappointed at the continue inaction by the EPA.
“It’s long past time for refiners to demonstrate compliance with their 2019 and 2020 renewable volume obligations,” he said in a statement.
“There’s no good reason for EPA to kick the can down the road again, which only adds uncertainty and instability to the marketplace. Refiners and the EPA need to respect and meet deadlines, and we likewise call on EPA to immediately publish the long-overdue renewable volume obligations for 2021 and 2022. We had hoped things would be different under this administration, but EPA continues to miss its deadlines and create confusion in the marketplace.”
Cooper sent a letter to the National Economic Council Director Brian Deese on Monday, after reports the Biden administration was considering cuts to the RFS to help reduce gasoline prices.
“While we share your goal of ensuring fuel remains affordable for American consumers, we were shocked to learn that one of the potential actions reportedly being discussed by the White House is ‘relaxing mandates to mix gasoline with biofuels,'” Cooper said in the letter.
“To be clear, lowering biofuel blending requirements under the Renewable Fuel Standard would not reduce the cost of gasoline for American households. In fact, cutting RFS volumes would most assuredly have the exact opposite effect on consumer gas prices.”
Although the Biden administration is making a significant push to reduce greenhouse gas emissions in transportation fuels, the ethanol and biodiesel industry have struggled to make a case that their fuels are the best-available option to reduce emissions now.
Kurt Kovarik, vice president of federal affairs for the National Biodiesel Board, said by continuing to not implement RFS volumes the administration was hurting the biofuels industry.
“The Biden administration and EPA are sending the wrong signals on fuel availability and gas prices,” he said in a statement.
“The uncertainty they are creating for the RFS will undermine biodiesel and renewable diesel producers, blow up demand for cleaner fuels, and derail the nation’s progress toward carbon reductions. This is simply a gift to refiners who have ignored the RFS obligations for more than a year and a half and are demanding the administration bail them out. EPA needs to finalize RFS rules now.”
Brooke Coleman, executive director of the Advanced Biofuels Business Council, said the Biden administration is giving refiners a pass.
“The Biden EPA is saying that oil companies are free to ignore clean energy laws until it’s politically convenient,” Coleman said in a statement.
“This license to delay is a lucrative handout to the same refiners who played politics with the RFS under President Trump while pocketing millions in regulatory favors. It’s past time for the EPA to enforce the law, as written, and give producers, farmers and other responsible stakeholders the certainty they need to invest in homegrown energy, hold down prices at the pump and reduce emissions.”
Read more on the EPA proposal here.
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