Corn farmers win in EPA’s proposed biofuels quotas
The Trump administration proposed a requirement that U.S. refiners use 15 billion gallons of conventional renewable fuels in 2018, while lowering targets for advanced alternatives that oil refiners have described as unattainable.
The proposal strikes a delicate balance on federal renewable fuel mandates by delivering a modest win to Midwest corn farmers supplying the bulk of traditional ethanol at the expense of companies producing next-generation alternatives.
Environmental Protection Agency Administrator Scott Pruitt said Wednesday the proposed volumes are “consistent with market realities.” They’re “focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace,” he said.
The EPA proposal represents the Trump administration’s first foray into the politically treacherous territory of the Renewable Fuel Standard, a program mandating biofuels in gasoline and diesel fuels that Congress established in 2005.
The program is loathed by oil producers and refiners but embraced by farmers, public officials and biofuel producers in Corn Belt states, such as Iowa, which play an outsized role in U.S. presidential contests. That unavoidable tension between oil producers and Corn Belt interests makes the program a “nightmare” for Republicans, said Kevin Book, managing director of Washington-based ClearView Energy Partners.
President Donald Trump promised to support ethanol while campaigning for president, and he reiterated that position in a speech in Iowa last month.
The ethanol industry is “under siege,” but the Trump administration is saving it, the president told a crowd in Cedar Rapids.
The EPA’s new plan will require 4.24 billion gallons of advanced biofuel in 2018, down from 4.28 billion this year and far lower than the 5.25 billion sought by the industry’s leading trade group.
That quota includes 238 million gallons of cellulosic biofuel, a drop from 311 million currently. Cellulosic ethanol, typically made from cornstalks, switchgrass and other materials, has been commercialized at a slower pace than supporters had hoped. The EPA is also proposing a requirement for 2.1 billion gallons of biomass-based diesel in 2019.
The 15-billion-gallon quota for conventional renewable fuel, the highest allowed under federal law for that category, is mostly fulfilled by corn starchbased ethanol. It also mirrors the current 2017 requirement.
Under federal law, the EPA has until Nov. 30 to issue final biofuel quotas for 2018, opening a window for intense lobbying.