Latest policy flip on ethanol upsets U.S. farmers

commodity groups and some farmers expressed frustration and anger Wednesday with a rule released by the Environmental Protection Agency that they said fails to uphold a promise President Donald Trump made 12 days ago to fulfill the intent of an ethanol law passed by Congress.

Since Trump became president, the EPA has given 85 oil refineries exemptions from blending ethanol into the gasoline they sell. That has removed 4 billion gallons of corn-based ethanol from the market, angering farmers who rely on the ethanol industry to buy nearly 40% of the corn crop produced to make the renewable fuel additive.

After months of pressure from farmers, trade groups and lawmakers and governors in farm states, Trump on Oct. 4 announced plans to require oil refineries to replace the ethanol gallons lost through the exemptions.

Farmers and lawmakers say the EPA had agreed to add waived ethanol back into the fuel supply by calculating the amount waived over a threeyear period, which would add about 1.3 billion gallons (2.5 billion imperial gallons) of biofuels back into the nation’s fuel supply next year. That would ensure that beginning in 2020 the government would comply with the 15 billion-gallon (12.5 billionimperial gallon) standard already required under federal law. The deal would not restore the already lost biofuels — a compromise the industry was willing to make in exchange for an EPA promise to change policy going forward.

On Tuesday, the EPA released the draft rule that would use a three-year average of gallons the Energy Department recommended waiving instead of the actual waived amount, increasing biofuels blending by about 770 million gallons (641 million imperial gallons), about half of what the industry expected.

“I thought a deal was a deal. When Donald Trump makes a deal, isn’t it a deal?” said Monte Shaw, executive director of the Iowa Renewable Fuels Association, a trade group for the 43 ethanol plants and 11 biodiesel refineries in Iowa, the nation’s largest biofuels producer.

The exemptions were designed to ease the burden on small refineries that might not be able to economically blend required ethanol amounts, but the EPA under Trump has allowed exemptions for profitable larger refineries.

The exemptions have led to the closing of 20 ethanol plants nationwide, Shaw said.

“My personal perspective is that President Trump has lost a lot of support,” said Kelly Nieuwenhuis, a farmer in Primghar in northwest Iowa and board president of an idled ethanol plant in Sioux Center.