EPA Announces 31 Small Refinery Exemptions, Ethanol Groups Outraged

Small Refinery Waivers 081319
EPA on Friday granted 31 more controversial waivers allowing refiners for forgo blending requirements of the Renewable Fuels Standard (RFS). ( Farm Journal )

EPA on Friday granted 31 more controversial waivers allowing refiners for forgo blending requirements of the Renewable Fuels Standard (RFS). At the same time, EPA denied 6 waiver requests. The fate of one additional waiver request is unknown. As expected, corn and ethanol groups are outraged at the decision which they say “undermines” the Renewable Fuel Standard and President Donald Trump’s commitment to farmers.

 “The Trump Administration’s approval of 31 refinery exemptions from the Renewable Fuel Standard is just devasting news for our industry,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw in a press release. “With this action, President Trump has destroyed over a billion gallons of biofuel demand and broken his promise to Iowa voters to protect the RFS. The vast majority of these exemptions are not justified under the law. Since this news began to leak this afternoon, RFS credit prices have freefallen to nearly zero, destroying much of the incentive to blend an incremental gallon of ethanol.”

Renewable Fuels Association President and CEO Geoff Cooper says the decision comes as a “total shock.”

“At a time when ethanol plants in the Heartland are being mothballed and jobs are being lost, it is unfathomable and utterly reprehensible that the Trump Administration would dole out more unwarranted waivers to prosperous petroleum refiners,” Cooper said in a press release. “Today’s announcement comes as a total shock, as just two months ago President Trump himself heard directly from Iowa farmers and ethanol plant workers about the disastrous economic impacts of these small refinery handouts. In response, he told us he would ‘look into it’ and we believed that would lead to the White House and EPA finally putting an end to these devastating waivers. Instead, the Trump administration chose to double down on the exemptions, greatly exacerbating the economic pain being felt in rural America and further stressing an industry already on life support.” 

American Coalition of Ethanol CEO Brian Jennings in a statement said this decision by the EPA is doing “damage” to American farmers.

“EPA’s refiner-win-at-all-costs oversight of the RFS is doing real damage to America’s farmers and renewable fuel producers who are already suffering from trade wars and volatile markets,” he said. “The RFS is supposed to ensure the use of ethanol and biodiesel increases from one year to the next, but 85 Small Refinery Exemptions later and over 3 billion waived gallons represents an enormous step backwards.”

Under the RFS, a small refinery may be granted a temporary exemption from its annual Renewable Volume Obligations (RVOs) if it can demonstrate that compliance with the RVOs would cause the refinery to suffer disproportionate economic hardship. EPA says it evaluates requests to determine if exemptions or warranted “based on information presented by the petitioning refinery and on the statutory and regulatory requirements for exemption.”

According to Cooper, there is “absolutely no evidence showing small refineries are suffering ‘disproportionate economic harm’ due to the RFS, meaning the entire EPA decision-making process is a sham.”

Cooper is also frustrated at the lack of transparency at EPA. When administrator Wheeler took over leadership of the agency following former administrator Scott Pruitt, he promised to shed light on the EPA’s decision-making process for RIN waivers. 

“Making matters worse, the process remains cloaked in secrecy and bias, and there is mounting evidence that the administration is continuing to grant full exemptions against the recommendations of the Department of Energy—and even against the advice of some of EPA officials,” Cooper said.