Minnesota governor launches biofuels council to offset hit to farmers from ethanol waivers

Dana Ferguson
Forum News Service

PLATO, Minn. — Gov. Tim Walz on Monday, Sept. 16 signed an executive order establishing a Minnesota Biofuels Council, a body that will assess growth opportunities in the industry and advise the administration on potential policy changes.

Surrounded by agriculture officials at a farm an hour outside the capital, the first-term governor said the state needs to take the lead in discovering new uses for Minnesota corn and expand ones that have been successful.

The move comes after the Trump administration greenlighted dozens of small refinery waivers since taking office in 2017. That figure includes 31 hardship exemptions granted last month. The move dropped the volume of renewable fuels blended into U.S. supply by roughly 4.04 billion gallons.

“The exemptions for the refineries are simply hitting this industry in an unfair manner,” Walz said. “This industry has always been glad to compete but it needs to be a fair playing field. ... We’re just saying today this door on biofuels is going to be wide open. We want to be the national leader.”

The Renewable Fuel Standard dictates the volume of renewable fuels that needs to be blended into the U.S. transportation fuel supply each year. And it can provide an additional market for farmers. The Obama administration allowed 23 exemptions over three years, representing 690 million gallons.

In recent weeks, renewable fuel plants across the Midwest have slowed production or shuttered. Corn Plus, an ethanol plant in Winnebago, Minn., in August announced that it would close its doors. And POET has announced it will idle processing at several biorefineries following the issuance of the “oil bailouts.” Company officials in a news release said the idling will result in job consolidations.

Brian Thalmann, a farmer and president of the Minnesota Corn Growers Association, said corn growers have looked to the ethanol industry as an option for their crops during a turbulent growing season and rural communities have seen the boost from the bioprocessing plants.

“The challenge in agriculture is now we’re not only being faced with wet weather we had, we have (limited) markets, we’ve got tariffs, we’ve got the ethanol exemption,” Thalmann said. “I’ve been asked numerous times this summer, ‘How long can it last?’ And we’re still here but as each month and each year goes by it’s going to get tougher and tougher.”

Walz and a South Dakota Gov. Kristi Noem wrote to President Donald Trump earlier this month to raise their concerns about the growing number of waivers under the Renewable Fuel Standard. Walz and Noem are the chair and vice-chair of the Governors’ Biofuels Coalition.

The Trump administration had not yet responded to the letter, Walz said, but the governor held out hope that the bipartisan support behind the pitch to limit the refinery waivers would win over the president.

Walz said he has been reaching out to U.S. Ambassador to China Terry Branstad to make the case to Trump that the waivers are hurting rural communities.

Minnesota’s biofuel council will be made up of 15 members including representatives with backgrounds in agriculture, biofuels, the transportation industry, along with environmental and conservation groups. The panel will study ways to boost carbon efficiency in biofuels and how the state can increase its use of the fuels.

Members will have to complete a report by November of next year.

Gov. Tim Walz on Monday, Sept. 16, 2019, signed an executive order in Plato, Minn. establishing a state council on biofuels. The move comes after area biofuel processors saw a hit from exemption waivers granted by the Trump administration.