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The U.S. Environmental Protection Agency on Friday issued a proposed rule under the Renewable Fuel Standard that would increase the amount of biofuels blended into refiner’s fuel, saying the volume obligations for 2020 are on track to meet the statutory deadline.

But the proposal, which triggers the public comment process, drew the ire of corn and soybean associations, Iowa’s Gov. Kim Reynolds as well as the state’s advocates in Washington, D.C., such as U.S. Sen. Chuck Grassley, R-Iowa, and U.S. Sen. Joni Ernst, R-Iowa, after the agency failed to reallocate waived amounts under the hardship program for smaller refiners.

The EPA sets biofuel blending standards under the Renewable Fuels Standard, but it also gives waivers to small refineries that can prove that compliance with the blending standards would harm them financially.

The EPA's announcement opens the public comment about the proposal. 

Under the proposal, the conventional renewable fuel volumes, primarily met by corn ethanol, would be maintained at the implied 15-billion gallon target set by Congress.

Also proposed is an advanced biofuel volume requirement for 2020 of 5.04 billion gallons, which is 0.12 billion gallons higher than the advanced biofuel volume requirement for 2019.

The EPA also is proposing to maintain the biomass-based diesel volume for 2021 at 2.43 billion gallons.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, pointed out that while the 2021 proposed level for biomass-based diesel was “flatlined” at 2.43 billion, the U.S. consumed 2.6 billion gallons of biomass-based diesel in 2018.

“The RFS is designed to be a market driving mechanism,” Shaw said in a news release Friday. “Setting the biodiesel blend level two years hence below what the industry already achieved last year cuts at the core of how the RFS was intended to be implemented. Congress established a separate biodiesel category for a reason, and EPA needs to begin respecting that.”

Shaw also said that while 15 billion gallons target set for conventional renewable fuel volumes that would be met by ethanol is in line with the statute, the draft proposal does not address the demand destruction caused by unjustified small refinery exemptions.

Reynolds released a statement Friday in which she said, “I am incredibly disappointed to see that the EPA has failed to reallocate the millions of lost gallons due to their brazen and unprecedented use of small refinery exemption waivers.

“A robust RFS is essential to a healthy ag economy in Iowa and across the country. I urge EPA Secretary (Andrew) Wheeler to reverse course and uphold President Trump’s commitment to rural America by strengthening the RFS and putting an end to the abusive practice of granting waivers to profitable oil refineries,” Reynolds added.

U.S. Sen. Chuck Grassley said in a news release that, “President Trump made commitments to farmers in Iowa and throughout Rural America. Those commitments include upholding the letter and spirit of the RFS (Renewable Fuel Standard). While he has stood by them, farmers and biofuels producers have told me that they see the president’s advisors at EPA breaking his promises by undercutting the RFS and bowing to pressure from Big Oil and its Washington allies.”

“It’s unacceptable that EPA would set biofuel volumes below demand at a time when farmers, biofuels producers and agribusiness owners are forced to shed jobs and close plants,” Grassley said. “I urge President Trump to compel EPA to reverse course and keep his word to the forgotten Americans who have faithfully stood with him.”

Iowa Sen. Joni Ernst issued a statement saying that, “While I’m glad to see the proposed rule is on track to meet the renewable volume obligations deadline, it simply does not account for the billions of gallons of ethanol our hardworking producers have lost to EPA’s unrelenting habit of handing out ‘so-called’ small refinery exemptions."

Iowa farmer Dave Walton, who is the Iowa Soybean Association secretary, said that at a time when soybean farmers need a lift, the EPA seems intent on expanding America’s petroleum industry at the detriment of farm families and rural communities.

“Maintaining flat volumes is not at all what we asked or hoped for,” Walton said. “Meanwhile, the EPA continues to grant small refinery waivers, further decreasing volumes. The biodiesel industry is already operating considerably below capacity. Soybean farmers and biodiesel processors are ready and willing to produce more, but can’t with the EPA seemingly working against us.”

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