WASHINGTON — While slightly lower than originally anticipated in December, soybean farmers remain pleased with the blending volumes announced June 3 by the Environmental Protection Agency, which include the largest-ever renewable volume obligation for biomass-based diesel and clear a troublesome backlog of small refinery exemption, or SRE, requests.
The 2022 finalized rule aligns with levels previously determined by Congress, setting the 2022 BBD volumes at 2.76 billion gallons, up from 2.43 billion for 2020 and 2021. The 2022 overall volumes are set at 20.63 billion gallons and retroactive volumes for 2021 at 18.84 billion gallons, 2020 at 17.13 billion gallons. These are the largest-ever volumes for total renewable fuels and specifically for BBD since the renewable fuel standard was created.
Brad Doyle, American Soybean Association president and soybean farmer from Weiner, Ark., said, “We are happy to see these RVOs that are so important to the soy industry being set significantly higher than in previous years and take this news as a sign of support for the Renewable Fuel Standard going into 2023. Additionally, we greatly appreciate the administration sticking to its commitment to no longer allow small refinery exemptions to continue being a means to skirt blending requirements.”
EPA denied 72 pending petitions from small refiners, clearing the backlog of SREs. Going forward, the agency will require new methodology for evaluating petitions. The final rule also confirms EPA will restore the 500 million gallons of biofuels that were wrongly waived in 2016, with 250 million supplemented in 2022 and the other half in 2023.
In addition to EPA’s announcement, USDA also announced nearly $700 million in payments for biofuel facilities it said will support the maintenance and success of the biofuels market for soy and corn producers, along with those biofuel producers, following COVID-19 hardships.
ASA has vocally supported both increased annual blending requirements and the denial of waivers, which erode the integrity of the RFS. Biodiesel is a key market for soy that uses soy oil at the same time soy meal can be used for protein-packed animal feed, and it is a clean-burning fuel alternative that likewise demonstrates soy growers’ commitment to using their U.S.-grown beans in more places more sustainably.
American Farm Bureau Federation President Zippy Duvall commented on the EPA’s announcement:
“Today’s EPA announcement is welcome news for farmers and ranchers as well as America’s families who are dealing with record-high fuel prices. AFBF appreciates that the Biden administration has upheld the promise to honor the critical role that renewable fuels play in supporting the rural economy.
“The use of homegrown renewable fuels provides an affordable option at the pump, while reducing greenhouse gas emissions the equivalent of taking 18 million cars off the road per year. With wholesale prices for ethanol currently lower than gasoline in many regions of the country, increased blending should lead to lower prices at the pump. Homegrown ethanol and biodiesel are especially important as we face global uncertainties.
“We remain committed to working with the EPA on blending requirements and supporting our partners up and down the supply chain as they work to enhance U.S. energy independence while continuing to ensure a reliable and affordable food supply.”
National Farmers Union (NFU) has long advocated for the increased use of biofuels based on economic and environmental benefits and has urged the EPA to rethink prior retroactive cuts on volumes.
NFU supports EPA’s announcement, while noting use of higher-level blends of ethanol, like E30, would add additional benefits to the economy, the environment, and America’s farmers.
“We are encouraged that the EPA is taking biofuels policy in a promising direction,” said Jeff Kippley, NFU Vice President. “Farmers and biofuels producers need certainty in the industry, and we thank the EPA for recognizing the critical need to increase ethanol blending mandates.
“This announcement provides much-needed relief for consumers at the gas pump market and economic stability to America’s farming and rural communities,” Kippley added.
Chris Edgington, Iowa farmer and president of the National Corn Growers Association (NCGA), said, “More ethanol in the fuel supply saves Americans money at the pump and lowers greenhouse gas emissions. Higher renewable fuel volumes for this year, which will increase and diversify our fuel supply, come at a crucial time as policymakers are working to lower fuel prices. When President Biden visited an Iowa ethanol production facility in April, he said ethanol reduces our reliance on foreign oil, creates choice and competition at the pump for better prices, creates good-paying jobs and reduces greenhouse gas emissions. Farmers agree, and the increased RFS volumes for 2022 and denial of pending refinery exemptions will advance these objectives and move renewable fuels forward.” (Link to NCGA news release)
Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America, said, “Clean Fuels and its members appreciate EPA Administrator Regan’s recognition that homegrown, clean fuels offer a better solution to high fuel prices stemming from high oil prices and supply shortages. We support EPA’s efforts to get the Renewable Fuel Standard back on track and to finalize 2022 volumes as a jumping off point for future growth. We stand ready to work with the agency to move forward and set volumes for 2023 and beyond. And we encourage the agency to quickly finalize new feedstocks pathways, such as that for canola oil. Biodiesel and renewable diesel are essential to keeping the U.S. economy moving right now, meeting more than 5 percent of the nation’s need for heavy duty transportation and shipping fuel. The clean fuels industry increased production and supply even during the economic emergency of the last few years, helping Americans save 4% on the cost of diesel fuel and all the other consumer items that rely on diesel fuel for shipping.” (Link to Clean Fuels Alliance America – formerly NBB)
Emily Skor, CEO of Growth Energy, said, “These last six months have been a rude awakening for those who have grown complacent about U.S. energy supplies. EPA’s 2022 renewable fuel blending requirements will deliver savings at the pump for working families, slash carbon emissions, and strengthen U.S. energy security by bringing more American renewable fuel into our fuel supply. In just the last few months, E15 has been a shield against skyrocketing fuel prices, saving drivers almost $0.60 per gallon in some areas while American biofuels cut greenhouse gas emissions by 46 percent compared to gasoline. We applaud President Biden and his EPA for this action, which will set the direction of total and advanced renewable fuel volumes for 2023 and beyond.” (Link to Growth Energy news release)
Quote from Geoff Cooper, president and CEO of the Renewable Fuels Association (RFA), released this statement:
“At long last, the RFS is being put back on track. Today’s actions by EPA and the Biden administration restore integrity and stability to the RFS program after several years of wanton mismanagement and abuse by the previous administration. The combination of a strong RVO for 2022, restoration of illegally waived volume from 2016, and a new direction for the SRE program puts the RFS program on solid footing for the future. We thank Administrator Regan and President Biden for honoring their commitments to implement the RFS in a way that is fair, transparent, and focused on growth. By requiring petroleum refiners to blend larger volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gas prices and provide economic relief to American families facing record-high pump prices. In the last few days alone, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, leading to significant savings at the pump for consumers of ethanol-blended fuels like E10, E15, and E85.” (Link to RFA news release)
And, Brooke Coleman, executive director of the Advanced Biofuels Business Council (ABBC), said, “We commend the Biden Administration for holding the line and putting the RFS back on track, despite the theatrics coming from a small handful of anti-biofuel oil refiners still trying to pad their profits by betting on regulatory handouts. Breaking the stranglehold oil companies have on American consumers is the solution, not the problem, when it comes to inflation and economic growth. The math isn’t hard. Ethanol is trading at a $1.25 discount to gasoline. More biofuel at the pump keeps dollars in consumer pockets. The focus now should be on optimizing the RFS to drive innovation and further reduce carbon emissions. It’s time to double-down on the RFS to unleash advanced biotech industries across the country.” (Link to ABBC).
American Farm Bureau Federation
National Corn Growers Association
Clean Fuels Alliance America
Renewable Fuels Association
Advanced Biofuels Business Council