INDIANAPOLIS — According to its owners, an Indiana ethanol bioprocessing facility will idle production due to the U.S. Environmental Protection Agency’s (EPA) misuse of Small Refinery Exemptions (SREs) for oil refineries no matter their size. The Indiana Corn Growers Association (ICGA) remains critical of EPA’s granting of these waivers, which takes billions of gallons of ethanol out of the obligated levels defined in the Renewable Fuels Standard.
The POET biorefiney in Cloverdale, Ind. will stop production in “several weeks,” said POET Chairman and CEO Jeff Broin on Tuesday afternoon. When operations cease, the plant will stop producing 92 million gallons of ethanol, which equates to 33 million bushels of lost corn demand. This and other capacity reductions will affect hundreds of local jobs. Indiana ethanol plants generate more than 700 direct jobs and also impact thousands of indirect employment opportunities. Further, the ethanol industry creates more than $2.5 billion in annual economic activity for Indiana.
The EPA’s waivers negatively impact Indiana corn farmers. Specifically, by 2018, the EPA had already waived 2.64 billion gallons of ethanol, which nearly offset Indiana’s entire corn output from 2017. Then last week, they granted an additional 31 waivers, destroying an additional 1.43 billion gallons of ethanol production.
Indiana ranks as the fifth-largest producer of U.S. ethanol – generating more than 1.1 billion gallons per year. The Hoosier State produces 8.1 percent of the total U.S. ethanol output. Nearly half of Indiana’s corn crop goes toward ethanol production, which represents nearly $300 million in additional farmer income.
“These waivers directly impact rural America and corn farmers,” explained ICGA President Sarah Delbecq, who is a farmer from Auburn, Ind. “With immense uncertainty now and in the future for the ag economy due to planting delays and trade disruptions, more waiver abuse would only exacerbate the damage to farmers’ bottom line and overall demand for corn. To offer a source of stability, the EPA needs to fulfill the intended goals and promises in the original RFS.”
The SREs offset the gains made in May by ethanol supporters from the Administration’s rule change of allowing year-round sales of E15, which is a blend of 15 percent ethanol with gasoline. The RFS authorizes exemptions for refiners that process less than 75,000 barrels of petroleum per day and show economic hardship.
The continued granting of erroneous SREs without regard to transparency or reallocation of demand eliminates any near-term growth potential for year-round E15 and challenges President Trump’s promises to help family farmers and rural communities.
— Indiana Corn Growers Association
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