Trump rejects biofuel policy deal

By Larry Dreiling

President Donald Trump June 5 announced he was abandoning an overhaul of biofuels policy, to the delight of two pro-ethanol senators.

The deal on the Renewable Fuels Standard would have implemented year-round E15 availability, but also allowed renewable identification numbers attached to exported biofuel volumes to be used to meet RFS compliance obligations.

Iowa’s two Republican Sens. Chuck Grassley and Joni Ernst, each broke the news on Twitter.

“Pres Trump helped farmers by rejecting bad ethanol deal. I appreciate. GREAT NEWS,” Grassley tweeted.

Tweeted Ernst, “[President Trump] has said he ‘looovves the farmers!’ #Iowa is feeling that love today, as the President just assured me he ‘won’t sign a deal that’s bad for farmers!’ Thank you, Mr. President!”

In a media call, Grassley, said he supported Trump’s rejection of the RFS deal.

“I thank President Trump for helping farmers by rejecting once and for all a proposal that would have undermined the RFS and really hurt ethanol,” Grassley said, adding he appreciates Trump’s commitment to not making any changes to the RFS that would hurt farmers.

Moving forward, Grassley said he will “continue to push for changes to the way the so-called hardship waiver process is implemented.”

Grassley added that waivers approved so far by Environmental Protection Agency Administrator Scott Pruitt have undercut the 15 billion gallon statutory mandate for conventional biofuels, effectively rolling the mandate back to 13.8 billion gallons.

“This all runs contrary to the spirit and letter of the RFS law,” Grassley said, adding he would continue his work in support of year-round E15 sales.

While the White House’s RFS deal initially looked like a victory for ethanol due to its inclusion of year-round E15 availability, Grassley indicated that the positive benefits of Reid vapor pressure relief for E15 wouldn’t have been enough to offset damage caused by allowing exports to count toward annual blending quotas.

“That’s why the deal would have been a net loss, and that’s why I’m glad the president rejected it for good,” Grassley said.

In a statement, the American Coalition for Ethanol CEO Brian Jennings extended his gratitude to Republican and Democratic senators, especially Grassley and Ernst, for convincing the White House not to proceed with changes to the RFS.

“Granting RVP relief for E15 in exchange with export RIN credits for refiners would have unquestionably been a loss for rural America and consumers because the benefits of selling E15 year-round would have been wiped out by export RINs,” Jennings said.

“Where does this leave us today? The president has promised to allow E15 use year-round but EPA has failed to make good on his promise. Meanwhile, EPA’s misuse of the RFS has resulted in at least 1.5 billion gallons of ethanol demand destruction through small refinery waivers, which have driven RIN values down by more than 70 percent this year.

“ACE has joined with allies to litigate the ‘hardship’ waivers but damage has already been done as ethanol blending is down despite the fact that gasoline use is on the rise. We need EPA to follow through on the President’s promise that E15 use will be allowed year-round and to stop the secret refinery waivers. We look forward to working with Congress and the administration to grow demand for ethanol.”

Renewable Fuels Association President and CEO Bob Dinneen said, “We are happy the President continues to recognize the importance of our industry to America’s farmers and rural economies across the nation. We look forward to working with the administration to remove regulatory barriers to continued growth.”

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Growth Energy CEO Emily Skor said, “At a time when farmers are facing the most challenging farm economy since the 1980s, we thank President Trump, Secretary (Sonny) Perdue, and Sens. Grassley and Ernst for standing firm for rural America,” Skor said. “We look forward to refocusing this conversation towards ways to help improve farm income and expand access to lower cost biofuels, which will benefit drivers facing higher prices at the pump.”

Larry Dreiling can be reached at 785-628-1117 or [email protected].