Ag, Ethanol Groups: Trump Rejection of Gap-Year RFS Waivers Just Beginning – DTN The Progressive Farmer

“It was also really the only obvious answer,” he said.

“We would consider it a new low by the oil industry to undermine the RFS, rewrite history with these gap-year petitions they were really just completely, completely off base in general. And so, I think the bigger concern for farmers is the real uncertainty that the waivers of these ’19 and ’20 compliance years that are still under consideration.”

According to the EPA’s RFS dashboard, the agency has 33 pending requests for exemptions for 2019 and 2020.

WHITE HOUSE MEETING

On Sept. 12, 2019, Trump convened a meeting at the White House to develop a plan to bolster the RFS. Joining the meeting were six Republican senators from Iowa, Nebraska and South Dakota, along with Vice President Mike Pence, economic advisor Larry Kudlow, budget guru Mick Mulvaney, U.S. Secretary of Agriculture Sonny Perdue and EPA Administrator Andrew Wheeler.

“By all accounts everyone left that meeting with the understanding that an agreement had been reached, to put the RFS back on track and to stabilize biofuel and agricultural markets,” said Geoff Cooper, president and chief executive officer of the Renewable Fuels Association.

A memorandum from USDA and EPA was released on Oct. 4, 2019, memorializing a five-point RFS agreement.

“And unfortunately, one year later very little progress has been made towards the implementation of that five-point plan,” Cooper said. “In fact, only one of the five promised actions from that Oct. 4 announcement has been accomplished to date.”

That was the announcement of the Higher Blends Infrastructure Incentive Program, or HPIP.

The five-point plan included accounting for 31 small-refinery exemptions granted in 2019, in the next renewable volume obligations in the RFS. It also included initiating a rulemaking process to streamline E15 labeling and remove other market barriers.

The agencies also vowed to improve transparency in the market for renewable identification numbers, or RINs.

USDA indicated it would “seek opportunities through the budget process” to consider infrastructure projects to expand the availability of higher biofuel blends, as well as continue to address ethanol and biodiesel trade issues.

Cooper said the administration should reject remaining gap-year small-refinery exemption requests pending with the DOE, “immediately adopt” the 10th Circuit decision nationwide and apply it to 33 pending exemption requests for 2019 and 2020, as well as release a new RVO rule for 2021. The proposed rule should have been released in June 2020.

The new RVO, Cooper said, should include 500 million gallons of RFS volumes remanded in a 2017 court decision.

“And then finally EPA should ensure that the small-refinery exemption program is transparent, which is something that has been utterly lacking from the process,” he said.

Matthew Morrison, outside counsel for the Renewable Fuels Association and partner at Pillsbury Winthrop Shaw Pittman LLP, said EPA really has no choice but to apply the 10th Circuit decision nationally.

“The decision is now the law of the 10th Circuit,” he said, “and the capacity of small refineries in the 10th Circuit comprises about 31% of the small-refinery capacity in the United States.

“So, if EPA were to limit the decision to just the 10th Circuit you have an uneven playing field, which is contrary to EPA policies. Secondly, it is past precedent for the agency adopting circuit-court decisions.”

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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