Iowa Gov. Kim Reynolds and other renewable fuel supporters testified before the U.S. Environmental Protection Agency last week in support of a strong Renewable Fuel Standard. They said the federal mandate requiring ethanol and biodiesel to be blended into the nation’s fuel supply has helped at a time when farmers are struggling to make a profit.
“As the current ag economy experiences a downturn, sustainable and predictable renewable fuels markets are helpful to the bottom line of farmers and rural Iowa,” said Reynolds. She was among several state and national leaders testifying in Washington, D.C., on the RFS.
EPA held the hearing on its proposed renewable fuel levels for 2018 for ethanol and 2019 for biodiesel. State and biofuel industry leaders, holding a news conference after the Aug. 1 hearing, said the proposed RFS levels for cellulosic ethanol, the next generation of renewable fuel, are too low and could curtail future investment.
Cellulosic ethanol target would be reduced
Iowa is home to two large cellulosic ethanol plants (Emmetsburg and Nevada) that use cornstalks, husks and other corn crop residue to make advanced ethanol. A western Iowa plant at Galva makes cellulosic ethanol using fiber from corn kernels. Iowa alone also has 12 additional “traditional” ethanol plants on track to produce cellulosic ethanol. None of them are accounted for in EPA’s analysis.
Combined, the corn kernel fiber plants in Iowa will be capable of producing roughly 25 million gallons of cellulosic ethanol in 2018. Yet the proposed level assumes only 17 million gallons of liquid cellulosic biofuel from the entire country. “I encourage EPA to implement the required future projections necessary to properly set the 2018 cellulosic ethanol level in the final rule,” said Reynolds.
“Cellulosic ethanol creates opportunity in the heartland for farmers, and also for researchers, investors and for new job opportunities for production facilities,” said Jan Koninckx, global business director of advanced biofuels at DuPont, which owns the Nevada cellulosic plant. The proposed EPA standard drops cellulosic ethanol levels 73 million gallons to 238 million gallons in 2018.
Biodiesel RFS volume should be increased
State and industry leaders also criticized the proposed biomass-biodiesel requirements that left the 2019 mandate at the 2018 level of 2.1 billion gallons. “In 2016, the U.S. diesel market consumed 2.8 billion gallons of biomass-based diesel,” said Reynolds. “I therefore question the proposed 2.1 billion level. There are ample American feedstocks and U.S. capacity to justify a much larger biodiesel number under the law.”
Reynolds pointed out that 3.5%, or $4.6 billion, of Iowa’s economy was tied to the renewable fuels industry in 2015. The RFS plays a major role in sustaining Iowa’s ability to continue as an agricultural leader by giving farmers another market for their commodities. Over 43,000 jobs are supported by the renewable fuels industry in Iowa, generating $2.3 billion of income for Iowans.
Grant Kimberley, executive director of the Iowa Biodiesel Board, testified at the hearing. “Biodiesel production has revitalized many rural areas in Iowa, and reversing course would harm those communities,” he told EPA.
EPA needs to rethink RFS in light of court case
Also testifying at last week’s EPA hearing was Monte Shaw, executive director of the Iowa Renewable Fuels Association (IRFA). He said the recent verdict in the court case Americans for Clean Energy v. EPA should radically alter the factors EPA considers when determining the RFS levels this year and going forward.
The U.S. Court of Appeals for the D.C. Circuit recently ruled that EPA violated the RFS when it cited market demand as a reason for setting RFS levels below minimums laid out in the law. While that case reviewed the RFS levels set for 2014 through 2016, in his testimony Shaw said the strong precedent should impact the proposed RFS rule currently open for public comment.
“The court clearly affirmed that Congress’ intent for the RFS from the very beginning was to crack the petroleum monopoly and to push biofuels into the marketplace,” stated Shaw. “The recent proposal from EPA was littered with red herrings like ‘consumer demand,’ ‘market constraints’ and ‘feedstock diversions.’ The letter of the law and the court ruling clearly leave no place for backdoor excuses to maintain the petroleum monopoly. The new EPA leadership must flush this discredited approach from their thinking and from the final rule. Whether in a reset discussion or in setting biodiesel and ethanol levels, EPA must act according to the clear directive from the court.”
Public comment period on RFS ends Aug. 31
The EPA public comment period now underway is for the proposed RFS levels for 2018 biofuels and 2019 biodiesel. “The conventional fuel level for which corn starch ethanol qualifies was maintained at its 15 billion-gallon statutory level in the proposal,” said Shaw. “The proposed 2019 biodiesel level was flatlined at 2.1 billion gallons, far below the 2016 consumption of 2.9 billion gallons. The proposal also cut cellulosic ethanol by 25%, a much deeper cut than was expected.”
Big Oil is sure to make their opinions known during this comment period and biofuels supporters are encouraged to do the same, he said. IRFA has made it possible for biofuels supporters to make their voice heard in less than a minute by going to IowaRFA.org/RFS to sign IRFA’s petitions to support ethanol and biodiesel. EPA is accepting comments through Aug. 31. The agency will then review the comments and should set the final volume requirements by Nov. 30.
The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing 4 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity and 12 biodiesel facilities with the capacity to produce over 350 million gallons annually.