EPA delays on blending targets fuel uncertainty among farmers

November 24, 2021 | Brock Johnston

A recent announcement from the Environmental Protection Agency (EPA) to indefinitely delay the release of future renewable volume obligations (RVO) through the Renewable Fuel Standard (RFS) is fueling frustration among Iowa soybean growers and the renewable fuel industry.

Under the RFS program, Congress has set a recurring annual deadline of Nov. 30 to release overall volumes for the upcoming year. In recent years, however, the deadline is being missed at an increasing pace.

The news couldn’t have come at a worse time for Iowa soybean farmers, according to Iowa Soybean Association (ISA) president Robb Ewoldt, a soybean farmer from Davenport.

“A strong biodiesel industry remains crucial to the success and profitability of soybean producers across the state,” Ewoldt said. “These volume delays not only threaten to undermine producer trust in the RFS program but cause uncertainty as Iowa soybean farmers are placing a record soybean crop in bins across the state."

Adding to producer discontentment is the EPA’s proposed measure to extend existing RFS compliance deadlines for 2020 and 2021 for "all obligated parties.” While biodiesel volumes for 2021 have already been announced at 2.43 billion gallons, no biodiesel guidance currently exists for 2022 and beyond.

Currently, there are no advanced or overall volumes for either 2021 or 2022 released. In 2020, the advanced volume drove biodiesel use to 3 billion gallons, according to the National Biodiesel Board (NBB).

The agency has also expressed intent in changing the annual compliance reporting deadlines for 2022 and after – effectively altering the timeline and methods in which RFS information is relayed.

Earlier this year, the agency also extended 2019 compliance deadlines for small refiners and all obligated parties.

The renewable fuel industry, including the Iowa Biodiesel Board (IBB), has long expressed opposition to any extensions that allow oil refiners to comply with past-due RFS volumes.

“Iowa biodiesel producers and soybean farmers are disheartened by the Biden administration’s continued placation of the petroleum industry,” said Grant Kimberley, Sr. Dir. of Market Development for ISA and executive director of IBB. “Allowing refiners to double down on their violations of the RFS law is outrageous, and deprives Americans of the benefits of renewable fuels.”

Looking ahead

This is not the first time the industry has experienced volume delays. The Obama administration received industry criticism for its delayed volume releases in both 2014 and 2015.

Although the latest EPA proposal provides little indication of when the agency will put forth the outstanding volume requirements, the Biden administration has reportedly considered cuts to the RFS in recent months.

This comes as the EPA is considering how the Covid-19 shutdown and subsequent decreased demand for gasoline in 2020 will affect set volumes. In addition, refiners and the baking industry continue lobbying for cuts to both past and future volumes, particularly for biodiesel.

Despite biofuels production being essentially complete for 2021, there is still no word on when the agency is expected to release volume requirements for 2020 and 2021.

“We urge the EPA to stop bending to the petroleum industry and finalize RFS rules immediately,” added Kimberley.

Economic and environmental driver for Iowa

A strong Iowa biodiesel market helps farmers weather difficult economic times through its support of Iowa’s vast agriculture industry. Leading industry studies have shown the state’s biodiesel production:

• Supports 13% of the per bushel price of soybeans – equating to approximately $1.50 per bushel.
• Lowers the price of meal for livestock producers and the food supply, reducing feed costs for livestock producers by $25 to $45 per ton.
• Reduces lifecycle greenhouse gases by up to 86% when compared to petroleum-based diesel.
• Employs more than 4,500 full-time equivalent jobs across Iowa job sectors.
• Generates nearly $587 million to Iowa’s GDP.

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