YPSILANTI, Mich. — Indiana Corn Growers Association (ICGA) member J.R. Roesner, a farmer from Ferdinand, Ind., told U.S. Environmental Protection Agency (EPA) representatives in a public hearing on Oct. 30 that ethanol producers are a valuable customer for Hoosier corn growers. The hearing, near Ann Arbor, Mich., focused on EPA’s Oct. 15 proposal that recalculates oil refineries’ obligations to blend renewable fuels into gasoline and diesel.
After receiving a directive from President Trump that ethanol and biodiesel gallons lost to Small Refinery Exemptions (SREs) should be reallocated, the White House, EPA and USDA reached a compromise to update the renewable fuel volumes in the Renewable Fuels Standard for 2020-2021. The deal does not directly change the volumes but instead adjusts the way annual renewable fuel percentages are calculated.
Many ethanol and biodiesel advocates believe EPA’s proposal does not actually reallocate gallons lost to SREs for oil refineries. A 30-day comment period follows this public hearing. The EPA would like to publish the new rule before the end of year.
Roesner expressed the value of the ethanol market to farmers like him. “In a typical year, we will sell 30-40 percent of our [corn] crop to one of three ethanol plants in our area,” he said. “For us, we receive more per bushel for the corn we take to the ethanol plants over the price we receive for selling it for livestock feed. Ethanol plants pay especially well in the fall. However, the lack of demand created by these refinery waivers is damaging demand for corn.”
Steve Howell, director of Allied Industry Affairs for ISA and ICGA, addressed concerns for Hoosier soybean growers. “Indiana is the fourth largest soybean-producing state,” he said. “Soybean-based biodiesel is major agricultural product in Indiana and can grow significantly if we had more market certainty. Indiana produces more than 100 million gallons of biodiesel per year. The soybean oil from more than 62 million bushels of Hoosier soybeans is processed into biodiesel, and that represents 24 percent of all soybeans harvested in Indiana annually.”
Howell added that EPA must reallocate the gallons lost from the refinery waivers so that farmers can rely on the markets to support the crops they produce.
The National Corn Growers Association (NCGA) and the American Soybean Association (ASA) support a rule that estimates future, exempted RFS volumes, but as a three-year rolling average based on actual volumes previously lost through SREs. That solution was designed to keep the waivers from annually piling up and undermining the RFS.
The fifth-largest U.S. producer of ethanol, Indiana pumps out nearly 1.3 billion gallons per year. The state generates 8 percent of the total U.S. ethanol output. Indiana’s 14 ethanol plants use nearly 47 percent of Indiana’s total corn crop – more than 460 million bushels.
Indiana is the fourth-largest, soybean-producing state, growing more than 330 million bushels per year. Soybean-based biodiesel is major farm product in Indiana, and can grow significantly if with more market certainty. Annually, Indiana produces more than 100 million gallons of biodiesel. The soybean oil from more than 62 million bushels of Hoosier soybeans is processed into biodiesel, and that represents 24 percent of all soybeans harvested in Indiana each year.
— Indiana Corn Growers Association
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