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EPA providing refinery exemptions for RFS

The U.S. Environmental Protection Agency (EPA) has improperly handled the administration of the Renewable Fuel Standard (RFS) by lowering total volume requirements and granting “hardship waivers” to large corporations, according to biofuels supporters.

“EPA continues to take actions that undermine the RFS and contradict President Trump’s commitments to America’s corn farmers. EPA is clearly overstepping its bounds, and we ask Administrator Pruitt to stop granting these waivers and damaging the RFS behind closed doors,” said Kevin Skunes, president of the National Corn Growers Association (NCGA).

Recent reports indicate that the EPA — that sets RFS volume obligations and ensures compliance with the law — has allowed major oil refiners to skirt the law. Reuters reported that EPA granted 25 exemptions to oil refineries in 2017, roughly three to four times the amount that previous administrations granted on a yearly basis. In fact, three “hardship waivers” were given to refineries owned by Andeavor, a corporation who took in $1.5 billion in profits last year.

“This improper application of the small refinery hardship exemption is yet another example of EPA actions that destroy demand for ethanol and corn,” Skunes said. “EPA reportedly has more than 30 petitions under consideration, and up to 25 waivers may have been handed out in secrecy last year. Granting this number of exemptions would remove a significant amount of renewable fuel gallons from the RFS volume requirement. This would have a direct impact on corn demand and corn prices at a time when net farm income has already decreased more than 50% over the past four years. EPA needs to stop granting these waivers and fully weigh the impact of these decisions on rural communities and America’s corn farmers.”

National Farmers Union president Roger Johnson noted it is EPA’s responsibility to ensure transportation fuel sold in the U.S. includes a certain amount of renewable fuel. Congress set these volume obligations and gave EPA limited authority to reduce the amount. Since 2016, the agency set volumes below their statutory levels in order to make them “reasonably attainable” to meet for the oil industry. Importantly, said Johnson, EPA lowered the obligations and found the new levels would not have significant economic impacts on small oil refiners.

The RFS statute allows small refineries an exemption from complying with annual RFS requirements, and an extension of this exemption if the refinery can demonstrate that compliance with the RFS will cause them “disproportionate economic hardship.”

“What’s troubling is the EPA would lower volume obligations, say they are attainable to small refineries, and then grant small refineries waivers when they say the levels are not attainable,” Johnson said.

Johnson also took issue with the agency’s lack of transparency. The RFS statute requires public notice and comment for waivers under the statute, but EPA is granting these exemptions (and therefore waivers) without any public input. “This Administration has provided little, if any, information on small refinery exemptions, which is causing speculation and market disruptions that they have indicated need to be addressed,” he said. “Exempting refiners from RFS compliance essentially waives away demand for corn at a time when family farmers need to significantly cut into corn oversupply. And it is certainly contrary to the intent of the RFS.”

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