Industry responses to EPA's new refinery exemptions

Staff reports
Farm Forum

Editor’s note: The following are responses from agricultural industry groups to the Environmental Protection Agency’s announcement on Aug. 9 that it granted 31 small refinery exemption waivers in 2018 under the Renewable Fuel Standard.

EPA waivers undermine RFS

National Corn Grower’s Association

WASHINGTON – National Corn Growers Association President Lynn Chrisp made the following statement after the Environmental Protection Agency (EPA) approved 31 refinery exemptions. Since early 2018, EPA has undermined the Renewable Fuel Standard (RFS) and granted 53 RFS waivers to big oil companies, totaling 2.61 billion ethanol-equivalent gallons of renewable fuel.

“Waivers reduce demand for ethanol, lower the value of our crop and undermine the President’s support for America’s farmers. Waivers benefit big oil at the expense of corn farmers who, between losing export markets abroad and ethanol markets at home, are losing patience.

“Mr. President, you proudly stand with farmers, but your EPA isn’t following through. You can step up for farmers today by reining in RFS waivers. Farmers expect the RFS to be kept whole by accounting for waived gallons and bringing more transparency to EPA’s secret process.

“Farmers are facing a sixth consecutive year of depressed income and commodity prices, with farm income for 2019 projected to be half of what it was in 2013. It’s time for this Administration to act in the best interest of farmers.”

NCGA and the American Soybean Association recently released a joint opinion piece urging President Trump to uphold his commitment to America’s farmers and the RFS.

‘Wholly owned subsidiary of big oil’

National Farmers Union

WASHINGTON – According to a recent Reuters report, the U.S. Environmental Protection Agency approved 31 of its 38 pending small refinery exemptions (SREs) for 2018. Recipients of the exemptions are not required to comply with renewable volume obligations under the Renewable Fuel Standard.

The RFS exists to drive investment in American-grown biofuels. However, EPA has consistently misappropriated RFS waivers, cutting demand for biofuels by 2.6 billion gallons and undermining the intent of the law. NFU President Roger Johnson issued the following statement in response to the report:

“This has been a particularly painful week for American family farmers and ranchers. It started on Monday with China – historically our biggest trading partner — halting all imports of American farm products, and it ended today with EPA acting like a wholly owned subsidiary of big oil.

“But these aren’t isolated events – it has been month after month of bad news. After more than a year of constant trade escalation, President Trump seems determined to destroy the United States’ reputation as a reliable supplier of quality agricultural products. At the same time, his EPA seems bent on destroying our domestic market for renewable fuels. Together, these actions are crippling our markets, creating enormous stress in the countryside, and forcing more and more farmers into bankruptcy.

“Our farmers are growing weary of the news from this White House. They’re tired of the empty promises, they’re tired of the excuses, and they’re tired of their needs being put last.”

EPA lets down sorghum ethanol plants and farmers

National Sorghum Producers

WASHINGTON, D.C. – On Aug. 9, the U.S. Environmental Protection Agency announced an additional 31 small refinery exemptions. National Sorghum Producers Past Chairman Don Bloss, a sorghum farmer from Pawnee City, Neb., released the following statement in response:

“National Sorghum Producers is disappointed in the EPA’s decision to administer extensions to profitable, undisclosed refiners at the detriment of U.S. ethanol and sorghum producers. The continued expansion of small refinery waivers places additional concerns on ethanol producers already facing significantly reduced margins.

“With one-third of the U.S. sorghum crop used to produce fuel ethanol, today’s announcement comes as a significant disappointment to sorghum farmers. With U.S. net farm income down almost 50 percent from the 2013 peak and sorghum farmers’ largest market, China, currently on the sidelines, these demand-destroying waivers could not have come at a worse time. National Sorghum Producers will continue to advocate for realistic, fair policies that fulfill Congressional intent while benefiting sorghum farmers and rural Americans.”

More waivers, more woes for struggling soy markets

American Soybean Association

WASHINGTON, D.C. — Amidst what now seems an unending trade war in which soy growers are caught in the middle, farmers of the U.S.’ number one export crop received another blow late in the week. The Environmental Protection Agency (EPA) announced on Aug. 9 its decision to grant even more waivers of Renewable Fuel Standard (RFS) volumes, awarding a whopping 31 of 38 total Small Refinery Exemption (SRE) applications for the 2018 compliance year.

Davie Stephens, a soy grower from Clinton, Kentucky and president of the American Soybean Association (ASA) responded, “Of course ASA is unhappy. These exemptions undermine President Trump’s pledge to support the RFS and undermine the Administration’s efforts to support farmers who are already bearing the brunt of trade disruptions. EPA’s decision is another blow to yet another market for soybean farmers.”

Last month, EPA announced biomass-based diesel and advanced biofuels volumes for 2021 will remain stagnant. And, EPA again failed to account for the significant gallons lost due to SRE, which makes the proposed volume, in effect, a reduction for biofuels.

Stephens explained the latest round of waivers in context; “Reduced demand for biodiesel resulting from retroactive exemptions is estimated already to be as high as 2.5 billion gallons since 2017, which basically undercuts the purpose of the RFS. Add in this latest round of refinery exemptions coupled with the lack of growth in the proposed annual RFS volumes, and those factors send biodiesel backwards when it should be moving forward.”

The waivers announced Friday evening combined with those issued for 2016 and 2017 RFS volumes brings the total number to more than 80 retroactive waivers, which significantly reduces biodiesel demand and, bottom line, results in billions of dollars in economic harm to the U.S. biodiesel industry, including soybean farmers.

Stephens concluded, “We would like for EPA to more carefully consider the capabilities of the biodiesel industry and to support its positive potential. We’re talking about producing higher levels of domestic, renewable fuels that enhance energy diversity and security; promoting jobs and value for farmers and rural economies; and helping the environment with reduced emissions. It seems like a win, win for EPA to support the RFS.”