The Biden administration on Friday formalized its requirement for how much ethanol and biodiesel the oil industry must incorporate into the country’s fuel supply this year, giving the renewable fuels industry several wins.
The U.S. Environmental Protection Agency has deviated little from the proposal level announced late last year, the largest since the renewable fuels standard was established in 2005. Most of the U.S. gasoline is blended with at least 10% ethanol under the federal mandate.
Iowa is both the nation’s largest ethanol and corn producer, with about half of the crop going to make renewable fuel.
It is also the country’s leader in the manufacture of biodiesel and is the second largest producer of soybeans, a major raw material for fuel.
The EPA said the decision on the standard reflects the Biden administration’s “commitment to resetting and strengthening the RFS, strengthening our nation’s energy security, and supporting local biofuels alternatives to petroleum for fuel. transportation”.
Supporters hailed the decision, which comes at a time when gasoline prices have skyrocketed. In Iowa, the median gas price on Friday 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 reduce pump prices by nearly 60 cents per 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 summer sales of E15 to help lower gasoline prices
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In addition, a recent study shows that corn ethanol produces 46% less greenhouse gas emissions than gasoline.
“More ethanol in the fuel supply saves Americans money at the pump and reduces greenhouse gas emissions,” said Chris Edgington, an Iowa farmer and president. of the board of directors of the National Corn Growers Association.
“President Biden understands the important role the biofuels industry plays in supporting farmers and rural communities in Iowa while lowering the price at the pump for consumers,” said U.S. Representative Cindy Axne, Democrat of Iowa, in a statement.
“By forcing oil refiners to blend greater volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gasoline prices and bring economic relief to families. Americans facing record high pump prices,” said Geoff Cooper, CEO of the Renewable Fuels Association. statement.
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But Chet Thompson, CEO of U.S. fuel and petrochemical makers, said the blending requirement for this year is “contrary to the administration’s claims that it is doing everything in its power to provide relief to consumers.” “.
“Unworkable mandates will unnecessarily increase fuel production costs and further threaten the viability of small US refineries, at the expense of consumers,” Thompson said.
Announcement also includes denial of refinery exemptions
The EPA, after collecting feedback since releasing its proposed blending requirements in December, said Friday it would require refiners to blend 20.77 billion gallons of ethanol, biodiesel and other renewable fuels this year.
Additionally, the oil industry must blend an additional 250 million gallons of renewable fuel this year and next after a federal court found the Obama administration improperly reduced blending requirements from 2016. .
The agency also denied about 70 exemptions for small refineries, many of which were granted under former President Donald Trump.
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“The Biden EPA is to be commended for restoring common sense to the refinery exemption program,” Monte Shaw, executive director of the Iowa Renewable Fuel Association, said in a statement. “These exemptions were never justified and were simply used to illegally undermine the RFS. We are grateful that this long nightmare is over.
Shaw, however, expressed concern over the EPA’s decision to retroactively reduce blending requirements for 2020 and 2021, despite the agency increasing last year’s requirement by 320 million from the previous year. December proposal.
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The EPA attributed the reduced mixture requirements to widespread travel shutdowns during the coronavirus pandemic, which significantly reduced fuel demand.
“We can’t ignore that today’s final rule creates uncertainty,” Shaw said. “Any of these numbers that look good today could be revised down in the future.”
But Emily Skor, CEO of Growth Energy, a biofuels advocacy group in Washington, D.C., said the Biden administration’s final rule “sends a positive signal” as the EPA works to establish new guidelines for 2023, when the federal mandate will no longer define the blend. terms.
Donnelle Eller covers agriculture, environment and energy for the Register. Contact her at [email protected] or 515-284-8457.
This article originally appeared on Des Moines Register: EPA announces renewable fuel standard, key figure for Iowa corn, ethanol