The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

By Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

On May 12, 2020, a bill was introduced in the U.S. House of Representatives, which would make emergency supplemental appropriations for the fiscal year ending on September 30, 2020. Titled the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), this bill addresses various issues, many of which have been worsened by the COVID-19 pandemic. Some of these issues include provisions of revenue, health, retirement, government operations, and support for processed commodities, among others.

Of particular interest to the biofuels industry is the bill’s introduction of a Renewable Fuel Reimbursement Program, which would make payments to eligible entities that experienced market losses due to the pandemic between January 1, 2020, and May 1, 2020. Eligible entities will consist of any facility that produced renewable fuel or advanced biofuel in calendar year 2019. The amount of payment to an eligible entity will be the sum of $0.45 multiplied by the number of gallons of qualified fuel produced in that period. Should a determination be made that an entity was unable to produce qualified fuel for one or more months during the applicable period due to the pandemic, $0.45 multiplied by 50 percent of the number of gallons produced in the corresponding month in 2019 will be paid.


 

By Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

On April 17, 2020, U.S. Department of Agriculture (USDA) Secretary, Sonny Perdue, announced $19 billion to farmers and ranchers as part of its COVID-19 relief program. Aimed at providing critical support in maintaining the integrity of the U.S. food supply chain and ensuring that every American has access to the food needed, the funds will be used not only to directly support farmers and ranchers, but also for USDA purchase and distribution. The latter goal means that USDA will partner with regional and local distributors affected by the closure of businesses to purchase $3 billion in fresh produce, dairy, and meat. The distributors will then provide boxes of fresh food supplied to food banks and other non-profits serving Americans in need. The one element not mentioned in the use of the relief funds, however, was assistance for biofuel producers who are bearing the impact of decrease in consumption.

In early April, 15 U.S. Senators had submitted a bipartisan letter to Secretary Perdue, requesting the use of its authority to assist the biofuels industry’s economic circumstances brought by the COVID-19 pandemic. Highlighting the negative impacts of the pandemic on farmers and producers who are suffering from the impact of the decrease in consumption, the letter asked that USDA consider the allocation of additional funds to assist the biofuels industry sector. Assistance would be helpful in the format of reimbursements for feedstocks and additional relief funds to the Higher-Blends Infrastructure Incentive Program to drive future biofuel demand. At the time, the 15 signatories of the letter seemed hopeful of receiving the aid requested and much needed. It seems as though USDA’s focus, however, is not geared toward addressing the biofuel industry’s request. According to an article, Secretary Perdue addressed this issue by stating that it is not within his authority to extend the aid to energy production and that USDA does not have a fundamental way to help the biofuels sector.


 

By Lynn L. Bergeson

EPA announced on April 2, 2020, that it sent a letter to all members of Congress to correct the record on its temporary policy regarding enforcement of environmental legal obligations during the COVID-19 pandemic. EPA states that “[a]s should be apparent to anyone who reads the policy, allegations that EPA ‘will cease all enforcement actions during the coronavirus pandemic’ and that the temporary policy ‘absolves polluters of all responsibility’ are simply not true.” According to EPA, it expects regulated entities to comply with all obligations, and if they do not, EPA emphasizes that the policy states EPA will consider the pandemic, on a case-by-case basis, when determining an appropriate response. Furthermore, in cases that may involve acute risks, or imminent threats, or failure of pollution control or other equipment that may result in exceedances, “EPA’s willingness to provide even that consideration is conditioned on the facility contacting the appropriate EPA region, or authorized state or tribe, to allow regulators to work with that facility to mitigate or eliminate such risks or threats.”

EPA states that it is “not unusual for EPA to exercise enforcement discretion to address emergency situations that disrupt normal operations, such as hurricanes. What is unusual is that the current crisis caused by the COVID-19 pandemic affects the entire nation,” rather than a discrete geographic area. According to EPA, it developed the temporary policy to allow it to prioritize its resources to respond to acute risks and imminent threats, rather than making case-by-case determinations regarding routine monitoring and reporting. EPA notes that the development of the policy was a group effort, involving “multiple calls” and with “drafts shared among EPA staff and managers, both career and political, at both headquarters and in the regions.” Once the COVID-19 threat has ended, “EPA expects regulated facilities to comply with regulatory requirements, where reasonably practicable, and to return to compliance as quickly as possible.” Additionally, according to EPA, “the policy makes clear that EPA expects operators of public water systems to continue normal operations and maintenance during this time, as well as required sampling, to ensure the safety of vital drinking water supplies.”

More information on EPA’s temporary policy is available in our March 27, 2020, blog item, “EPA Announces Temporary Enforcement Discretion Policy.”