EPA raises expected level of ethanol for 2017 - Trade Only Today

EPA raises expected level of ethanol for 2017

The EPA reversed course from its initial proposal regarding mandated ethanol volumes for 2017.
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The Environmental Protection Agency reversed course from its initial proposal regarding mandated ethanol volumes for 2017, acting to increase the volumes more than initially proposed.

The EPA announced on Wednesday, the day prior to a long weekend for many, that it raised its corn ethanol volume mandate for 2017 to levels Congress set in the 2007 Renewable Fuel Standard, “handing a win to agricultural groups and biofuel makers,” according to the National Marine Manufacturers Association.

In the final volume rule, the agency said it would require that 15 billion gallons of conventional biofuel be mixed into the nation's fuel supply, an increase from the 14.8 billion gallons it had called for in its May proposal.

The May proposal had raised the ire of both ethanol opponents and proponents.

The new figure is in line with the mark that Congress prescribed under the Renewable Fuel Standard during the George W. Bush administration almost a decade ago.

“The EPA decided to revert back to the congressional vision of RFS. That’s what we’re dealing with in 2017,” NMMA senior manager of government relations Michael Lewan told Trade Only Today. “It’s definitely a bit of a departure.”

The EPA has slowed the increase of ethanol in the overall fuel supply in previous years from the requirements set forth in the 2007 RFS, but continues to set increases the law requires.

The EPA’s newest proposal increases the need for higher blends of ethanol to record levels in 2017, pushing further past the E10 blend wall, according to critics of the proposal. The blend wall is the term used for the maximum amount of ethanol in fuel that all engines can tolerate — which is E10, or 10 percent ethanol.

The total mandate for biofuels rose to 19.28 billion gallons. The requirement for cellulosic advanced biofuels was set at 311 million gallons, and advanced biofuels were set to 4.28 billion gallons. The 2018 biodiesel mandate has been left unchanged from the proposal at 2.1 billion gallons.

“Today’s decision by the EPA directly threatens the safety of millions of American boaters,” NMMA president Thom Dammrich said Wednesday in a statement.

“EPA ignored the overwhelming evidence presented by the boating industry in its decision to increase the 2017 ethanol mandate to record highs. EPA’s misguided decision not only denies the public choice at the pump to purchase ethanol-free fuels, but they are now increasing the spread of a dangerous, prohibited fuel blend that will cause damage to marine engines and raises serious safety concerns. It’s clear that the EPA has failed in its duty — now more than ever NMMA urges the new Congress and the Trump administration to work together to deliver actual reforms that fix this broken law and protects the millions of American boaters.”

Donald Trump came out in support of the ethanol industry leading up to the Iowa caucus in January. On Sept. 15 Trump “momentarily” said he would repeal a key piece of the fuel standard, but quickly changed course.

The Trump campaign website briefly posted a fact sheet announcing his opposition to a key component of the biofuel law, saying it “penalizes refineries if they do not meet certain blending requirements. These requirements have turned out to be impossible to meet, and are bankrupting many of the small and midsize refineries in this country,” according to the Times-Picayune.

That fact sheet was quickly taken down later on Sept. 15 after pressure from the ethanol industry, the newspaper said.

A Trump campaign official declined to comment on the change in the fact sheet, saying only that Trump’s commitment to the standard as it is written is “unshakeable,” The Hill reported on Sept. 15.

Still, Lewan was optimistic that the new administration could usher in the RFS reforms the industry has sought.

“There’s ample opportunity as we shift to get reforms that break the cycle and update the 2007 law to update the law to current market realities,” Lewan said. “Ultimately, the EPA did last November come below the statutory requirements for 2016. This year EPA had proposed to come the same proportion below the 2017 requirements, but they have upped that number a bit, which is disappointing, but it underscores why we can’t rely on EPA and government agencies to rule in our favor. We need legislative changes and for Congress to work together to fix the law they wrote. I think there’s a good opportunity entering January to use this announcement as a catalyst to show why we need change sooner rather than later.”

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