By Kathleen M. Roberts
On April 13, 2017, the Iowa Renewable Fuels Association (IRFA) released a statement regarding the passage of a bill, HSB 187, by the Iowa House Appropriations Committee that would cut the value of the Iowa biofuels tax credits and complicate the mechanism for receiving the credit. According to the bill, the value of the tax credits would be determined based on annual sales, and the amount of the credits would be capped on an annual, statewide basis. The purpose of the biofuels tax credits was to incentivize consumers to purchase higher blends of ethanol and biodiesel, such as E15, E85, and B11, by offering a tax credit to fuel retailers. IRFA states, however, that the amendments to HSB 187 undercut the entire purpose of the tax credits since fuel retailers cannot pass the price reduction to the consumer if they do not know what the credit is at the time the fuel is sold.
On March 13, 2017, the South Dakota Farmers Union announced that the National Farmers Union had passed a resolution calling for the U.S. Environmental Protection Agency (EPA) to open the market to higher blends of ethanol during its annual meeting in San Diego. The resolution, which was brought forward by the South Dakota Farmers Union delegation, promotes the use of higher blended fuels, such as E30, as a way to expand the retail fuels infrastructure and support the Renewable Fuel Standard (RFS).
In addition to passing the resolution, the National Farmers Union filed legal comments regarding EPA’s overreach in its interpretation of the Clean Air Act (CAA), which limits ethanol content to 15 percent. Doug Sombke, President of South Dakota Farmers Union, called on EPA and all government regulators to reverse statements and policies that unfairly limit the amount of ethanol in fuel and stated that both the state and national organization continue to seek greater market access for higher blended fuels.
On March 7, 2017, the Governors’ Biofuels Coalition sent a letter to President Trump requesting the Administration’s support for changes to various federal policies to strengthen biofuels production and expand markets for ethanol and other biofuels. The letter, which was signed by Nebraska Governor Pete Ricketts and Iowa Governor Terry Branstad, specifically highlights the need for the Trump Administration to change the fuel volatility limitations placed on E15, to update corn ethanol’s lifecycle carbon emissions profile to reflect advances in ethanol production technology, and to update the 2014 motor vehicle emission simulator model to prohibit spurious comparisons of high- and low-ethanol emissions factors. The governors commended Trump on his support of the biofuels industry over the past year and stated that expanding biofuels production is one of the best ways to meet the nation’s energy needs.
On September 13, 2016, governors of seven ethanol producing states wrote to EPA Administrator Gina McCarthy requesting the removal of the Reid Vapor Pressure (RVP) limit on E15. RVP measures gasoline volatility, and E10 receives a one pound-force per square inch (psi) RVP waiver between June 1 and September 15 that is not extended to E15. The letter states "EPA's disparate handling of E10 and E15 with regard to fuel volatility regulation is stifling the widespread adoption of E15 and mid-level ethanol blends." The governors continue to argue that "This inequitable RVP treatment of E10 and E15 has no scientific basis since E15 and higher blends are lower in volatility than E10 when blended with the same base gasoline. We strongly urge you to take immediate action to establish a volatility regime that allows a uniform gasoline blendstock to be suitable for blending both E10 and E15 (and higher blends) year round." The American Coalition for Ethanol and the Iowa Renewable Fuels Association have both spoken out in support of the letter, stating the RVP limit is one of many barriers to ethanol being competitive in the fuel market.
On September 10, 2015, the U.S. Department of Agriculture (USDA) announced the 21 state finalists for Biofuel Infrastructure Partnership (BIP) grants to add infrastructure to supply more renewable fuel to drivers. The program was announced in May 2015, to increase the number of gas pumps dedicated to higher ethanol blends, including E15 and E85. While $100 million was made available by the USDA's Farm Service Agency (FSA), applications totaled over $130 million. The grants given out by the USDA BIP will be matched with private and state resources, allowing the program to more than double the amount of infrastructure that will be added. USDA announced that these competitive grants are expected to result in 4,880 pumps being installed at over 1,400 fueling stations throughout the United States.
On August 14, 2015, the Renewable Fuels Association (RFA) asked EPA to waive Reid Vapor Pressure requirements for E15 and to also allow E12 blending. Reid Vapor Pressure is a measure of gasoline's volatility and is regulated in the summer months to reduce health risks caused by evaporative emissions. The request by the RFA occurred in the wake of a 240,000 barrels per day (b/d) refinery outage in Whiting, Indiana that has resulted in 50 cents per gallon cost increases for gasoline in some regions. Ethanol in the Chicago wholesale market is currently $1 per gallon less than gasoline and, if gas stations began carrying E15, gas prices would be reduced by at least 5 cents per gallon, saving drivers in the Midwest about $6 million per day. The RFA argues that the outage illustrates the need to diversify the fuel supply to blunt the consumer impacts of supply availability.
EPA is accepting public comments through May 26, 2015, on two
proposed information collection requests (ICR) published in the Federal
Register on Tuesday, March 24, 2015. The proposed ICRs concern projected
cellulosic biofuels volumes and gasoline containing greater than 10 volume
percent ethanol up to 15 volume percent ethanol (E15). Comments received will
assist EPA as the agency prepares to submit the final ICRs to the Office of
Management and Budget (OMB) for its official approval and dissemination.
In the first proposed ICR on "Cellulosic
Production Volume Projections and Efficient Producer Reporting,"
EPA is seeking to collect information from potential cellulosic biofuel
producers to aid in determining the annual volume standards. In the second
proposed ICR on "Recordkeeping
and Reporting Related to E15 (Renewal)," EPA is seeking
comment on recordkeeping and reporting items related to the legal use of E15 in
On September 19, 2014, Minnoco announced an expansion program which will allow Minnoco retailers to offer biofuels that perform better at lower costs. This includes the ability to offer E15, E30, E85, diesel fuel, and gasoline typically available for purchase. More information about the announcement can be found online.
On July 2, 2014, EPA released a signed, pre-published version of its final rule for "Renewable Fuel Standard (RFS) Pathways II and Modifications to the RFS Program, Ultra Low Sulfur Diesel Requirements, and E15 Misfueling Mitigation Requirements." Under the rule, EPA qualifies certain additional fuel pathways that the Agency has determined meet the lifecycle greenhouse gas reduction requirements for cellulosic biofuel under the RFS. The final rule also provides guidance regarding the feedstocks that EPA considers to be crop residues, including clarification that EPA considers corn kernel fiber to be a crop residue. In addition, under the rule, EPA is also "finalizing other minor amendments related to survey requirements associated with the ultra-low sulfur diesel (ULSD) program and misfueling mitigation regulations for 15 volume percent ethanol blends (E15)." A copy of the rule is available online.
The final rule differs from the proposed version of the rule in several respects. For instance, in its "fact sheet" describing the rule, EPA states that it is "not finalizing the proposed advanced butanol pathway, the proposed pathways for the production of renewable diesel, naphtha and renewable gasoline from biogas, the definition of responsible corporate officer, or the proposed amendments to compliance related provisions in Section 80.1452 (requirements related to the EPA Moderated Transaction System (EMTS)). The Agency is deferring a final decision on these matters until a later time."
Under the final rule, the following pathways are now qualified for cellulosic and advanced fuel under the RFS:
* Compressed natural gas produced from biogas from landfills, municipal wastewater treatment facility digesters, agricultural digesters, and separated municipal solid waste (MSW) digesters;
* Liquefied natural gas produced from biogas from landfills, municipal wastewater treatment facility digesters, agricultural digesters, and separated MSW digesters; and
* Electricity used to power electric vehicles produced from landfills, municipal wastewater treatment facility digesters, agricultural digesters, and separated MSW digesters.
With this rule, EPA is trying to help facilitate RFS compliance by allowing additional pathways to qualify under the program.
On March 6, 2014, South Dakota Governor Dennis Daugaard (R) announced that the state will begin incorporating E15 fuel into its state fleet during a test period over the next six months. Currently, E10 is available and used in the state's flex-fuel and other vehicles, but the Governor wants to encourage the greater use of ethanol in his state. Ethanol is a $3.8 billion industry in South Dakota. Greater use of E15 is one potential solution to the E10 ethanol "blend wall." The U.S. Environmental Protection Agency has proposed reducing the 2014 renewable volume obligations for corn-starch ethanol due to blend wall concerns. A copy of the press release on the announcement released by Governor Daugaard's office is available online.