The Biden administration Friday made official its requirement for how much ethanol and biodiesel the oil industry must blend into the nation’s fuel supply this year, giving the renewable fuel industry several wins.
The US Environmental Protection Agency deviated little from the proposal level announced late last year, the largest since the establishment of the Renewable Fuel Standard in 2005. Most US gasoline is blended with at least 10% ethanol under the federal mandate.
Iowa is both the nation’s largest ethanol producer and corn grower, with about half the crop going to make the renewable fuel.
It also leads the nation in making biodiesel and is the second-largest grower of soybeans, a major feedstock for the fuel.
The EPA said the decision on the standard reflects “the Biden administration’s commitment to reset and strengthen the RFS, bolster our nation’s energy security, and support homegrown biofuel alternatives to oil for transportation fuel.”
Supporters hailed the decision, which comes at a time when gas prices have skyrocketed. In Iowa, the Friday median gas price was $4.493 a gallon, nearly 60% higher than a year earlier, according to AAA Gas Price.
The renewable fuels industry says gas blended with 15% ethanol, called E15, can cut pump prices by nearly 60 cents a gallon in some parts of the country. President Joe Biden visited an Iowa ethanol plant in April to announce he was lifting disputed smog-related restrictions on the summer sales of E15 to help cut gas prices
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Also, a recent study shows that corn-ethanol has 46% fewer greenhouse gas emissions than gasoline.
“More ethanol in the fuel supply saves Americans money at the pump and lowers greenhouse gas emissions,” said Chris Edgington, an Iowa farmer and National Corn Growers Association’s board president.
“President Biden understands the important role the biofuels industry plays in supporting Iowa farmers and rural communities while reducing the price at the pump for consumers,” US Rep. Cindy Axne, an Iowa Democrat, said in a statement.
“By requiring petroleum refiners to blend larger volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gas prices and provide economic relief to American families facing record-high pump prices,” Renewable Fuels Association CEO Geoff Cooper said in a statement.
MORE: President Joe Biden in Iowa OKs more ethanol use to cut gas prices, pitches plan to improve rural America
But Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, said the blending requirement for this year is “contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.”
“Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of US small refineries, both at the expense of consumers,” Thompson said.
Announcement also include denial of refinery exemptions
The EPA, after gathering comments since releasing it proposed blending requirements in December, said Friday it will require refiners to blend 20.77 billion gallons of ethanol, biodiesel and other renewable fuel this year.
Additionally, the oil industry must blend 250 million more gallons of renewable fuel, both this year and next, after a federal court found the Obama administration inappropriately reduced the 2016 blending requirements.
The agency also denied roughly 70 exemptions for small refineries, many of which had been granted under former President Donald Trump.
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“The Biden EPA is to be commended for restoring sanity to the refinery exemption program,” Monte Shaw, the Iowa Renewable Fuel Association’s executive director, said in a statement. “These exemptions have never been justified and were simply being used to illegally undermine the RFS. We are grateful this long nightmare is over.”
Shaw, however, said he’s concerned about the EPA’s decision to retroactively scale back the blending requirements for 2020 and 2021, although the agency did increase last year’s requirement by 320 million over December’s proposal.
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The EPA attributed the reduction in the blending requirements to widespread travel shutdowns during the coronavirus pandemic, which drastically reduced fuel demand.
“We cannot ignore that today’s final rule creates uncertainty,” Shaw said. “Any of these numbers that look good today could be revised downward in the future.”
But Emily Skor, CEO of Growth Energy, a Washington, DC, biofuels advocacy group, said the Biden’s administration final rule “sends a positive signal” as the EPA works to set new guidelines for 2023, when the federal mandate will no longer outlines blending requirements.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at firstname.lastname@example.org or 515-284-8457.