EPA PROPOSED RULE HIDES AN INEVITABLE DROP IN ETHANOL INCLUSION RATES
Jonathan Coppess and Scott Irwin from the University of Illinois Department of Agricultural and Consumer Economics said it best in the title of their July 12, 2018, farmdoc daily article, so we won’t even try to rephrase: EPA 2019 RFS Proposed Rulemaking: What You See Is Not What You Get. EPA, under former Administrator Scott Pruitt, has been dishing out small refinery exemptions “like Halloween candy,” in a manner that, according to Coppess and Irwin, would effectively reduce the overall volume obligations. In short, that means less ethanol to be blended and less corn grind at ethanol plants, diminishing corn market opportunities to benefit petroleum interests.
You can read the full farmdoc daily article here: Coppess, J. and S. Irwin. "EPA 2019 RFS Proposed Rulemaking: What You See Is Not What You Get." farmdoc daily (8):128, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 12, 2018.
Dave Loos, IL Corn business development director adds, “Even though EPA is showing up to 15 billion gallons of corn ethanol in their recently released RVO numbers, the numbers that we can expect to get in 2019 are far less than that. If you look at all the waivers and all the encroachment in the conventional biofuels space for other reasons, we’re down to 14.2 billion gallons or maybe even less than that. On this pathway EPA is headed down, we’ll never reach that 15-billion-gallon mark that corn farmers expected when the RFS was signed in 2007.”
How do we change the direction of this pathway? Among other things, we need:
- the Reid Vapor Pressure waiver for all blends above E10,
- EPA to stop granting small refinery waivers, and
- reallocation of previously waived gallons.
Expect to see more from ICGA on this issue as we make comments on the docket regarding EPA proposed RVO rule.
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