Johnston, IA - Today the US EPA released the final 2018 Renewable Fuel Standard (RFS) levels for conventional and advanced biofuels, and the 2019 level for biodiesel.
As required by law, the conventional fuel level – for which corn starch ethanol qualifies – was maintained at its 15-billion-gallon cap. The advanced biofuels level of 4.29 billion gallons effectively cuts biodiesel demand in 2018 by 67 million gallons.
The cellulosic level was cut over 7 percent from 2017, although less than the 25 percent cut that was originally proposed.
Further, the final 2019 biodiesel level was flat-lined at 2.1 billion gallons, far below the industry request of 2.75 billion gallons.
“Many people are saying the RFS numbers released today, while disappointing, were expected,” stated Iowa Renewable Fuels Association Executive Director Monte Shaw.
“I disagree. Based on the 2018 biodiesel level finalized a year ago, biodiesel producers had every right to expect a 100 million gallon increase for 2018.
"But the EPA failed to raise the advanced biofuels level by an equal amount, resulting in only a 33 million gallon potential increase for biodiesel in 2018 – a cut of 67 million gallons from what was signaled a year ago.”
The EPA has admitted that biodiesel demand is ultimately driven by the advanced RFS level as it is biodiesel that fills that category.
So despite the specific biomass-based diesel level increasing 100 mg from 2017 to 2018 – a level finalized a year ago under the Obama Administration – the effective opportunity for biodiesel growth in 2018 is only 33 million gallons.
“Virtually every ethanol plant in Iowa produces distillers corn oil that is used to produce biodiesel,” added Shaw.
“Ethanol plants had every right to expect a growing market for biodiesel, but today’s rule cuts the expectation for 2018 and signals no growth for 2019.
And with roughly a dozen Iowa ethanol plants poised to produce cellulosic ethanol from corn kernel fiber, they had every right to expect an increase in the cellulosic level, not a 7 percent cut.”
“We do thank President Trump for keeping his promise to uphold the RFS for ethanol,” stated Shaw.
“By rejecting structural changes to the RFS and finalizing a 15-billion-gallon conventional biofuels level, there is some certainty for rural America as it struggles with commodity surpluses.
"We continue to urge the Administration to provide regulatory equity for E15 fuel blends so we can grow ethanol use beyond the 15-billion-gallon RFS cap.
"Moving forward, IRFA will continue to work with EPA and the White House to press the point that with tight margins every single market – like distillers corn oil and corn kernel fiber – is just as important to traditional ethanol producers as it is to biodiesel and advanced ethanol producers.”
Shaw concluded, “IRFA also wishes to thank our Iowa champions in this effort.
"While not what should have been expected, the final rule is undoubtedly better than it would have been due to the hard work by Senators Grassley and Ernst and Governor Reynolds, along with the entire Iowa House delegation.
"The entire biofuels industry is in debt to their leadership.”
For more information, please contact Monte Shaw at 515-252-6249.