NBB Testifies on Proposed RFS Reset for 2020-22

Tuesday, the National Biodiesel Board (NBB) and other renewable energy advocates testified on the Environmental Protection Agency's proposed Renewable Fuel Standard rule for 2020, 2021 and 2022 volumes. The industry representatives welcomed proposed growth for 2022, urged EPA to maintain the integrity of the program, and asked the agency to avoid further or future delays in setting annual volumes.

Donnell Rehagen, NBB's CEO, highlighted the clean fuels industry's readiness to meet higher volumes and thanked EPA for restoring improperly waived volumes from 2016. "During these past two years, the biodiesel industry worked hard to meet Americans' growing demand for better, cleaner fuels," Rehagen testified. "In 2020, the U.S. biomass-based diesel and renewable diesel market grew to 3 billion gallons -- its highest volume ever -- and generated more than 4.5 billion advanced biofuel credits. Through the first 11 months of 2021, the industry has maintained a sustainable production rate comparable to 2020."

Chris Edgington, Iowa farmer and president of the National Corn Growers Association, said, "Corn farmers produce low-carbon feedstock for low-carbon ethanol, offering immediate and affordable emissions reductions and a vital pathway for agriculture to help address climate change. But our success helping you meet these commitments depends on EPA sending a clear and firm message that volume requirements will be enforced. ... As EPA finalizes and enforces the delayed 2022 RFS volumes and puts the RFS on track, we ask you to work with us to achieve greater emission reductions and cleaner air through use of more renewable, sustainable, affordable ethanol."

Emily Skor, CEO of Growth Energy, testified, "During the previous administration, the small refinery exemption program undercut the goals of the RFS, preventing EPA from ensuring the RVO was met each year. We appreciate the agency's work to end this abuse and return to a true implied conventional volume of 15 billion gallons in 2022, along with promoting strong growth in advanced biofuels. We are also pleased that the agency has finally proposed to restore the first 250 million gallons illegally waived in the 2016 RVO with a commitment on the second 250 million gallons for 2023. EPA's proposal, however, has some serious flaws that need to be addressed. It sets an extremely troubling precedent of revising finalized volumes for 2020 and back-setting volumes for 2021 rather than driving growth in renewable fuels. The proposed retroactive cuts to 2020 exceed EPA's legal authority, and negatively impact the entire agriculture and fuel supply chains."

Geoff Cooper, president and CEO of the Renewable Fuels Association, said, "RFA supports the proposed volumes for 2022 for all categories of renewable fuel, and we specifically commend EPA for proposing to set the implied requirement for conventional renewable fuels at the statutory level of 15 billion gallons. We also support EPA's proposal to account for projected exempt volumes from small refineries when setting RVO percentages. And, RFA agrees with EPA that, 'in the interest of transparency,' the Agency should release basic information about entities seeking exemptions from RFS compliance. ... As for the 2021 RVO and the proposed revision to the 2020 RVO, we have serious concerns about EPA's questionable use of its 'reset' authority. While we understand EPA has a statutory obligation to consider resetting future RFS volumes when certain thresholds are met, it does not appear that Congress intended for EPA to use its reset authority for the purpose of retroactively addressing unforeseen market anomalies like COVID or weather-related disasters."

Kate Shenk, NBB's director of regulatory affairs, also welcomed proposed growth in 2022, adding, "We want to ensure that the BBD volume is fully met each year and continues to reflect growth in biomass-based diesel production. We also hope that EPA continues to create room for growth in the overall advanced pool, since some additional advanced biofuels are co-products of biomass-based diesel."

NBB and its members also emphasized the uncertainty created by EPA''s proposed reset of 2020 volumes and proposed -- rather than outright -- denial of small refinery exemptions. "Today's proposal -- while positive for future years' growth -- continues to undermine the industry and bow to the pressures of the refiners," said David Cobb, NBB's director of federal affairs. "The fact that this proposed rule opens another comment period for SREs just adds additional delays in finalizing a rule that is already late."

Brooke Coleman, executive director of the Advanced Biofuels Business Council, added, "Many of my colleagues have and will talk about the issues associated with opening up 2020. But I want to talk about one aspect of that -- retroactivity and its effect on innovation. RFS enforcement history has created an RFS believability problem that percolates and cycles through the whole supply chain. Failing to enforce the law, waiving it for dozens of oil refiners, retroactively opening old rules -- it's all retroactive compliance alleviation that undercuts innovation investment."

NBB further urged EPA to quickly propose 2023 RFS volumes, which were due under the statute on November 30, 2021.

The U.S. biodiesel and renewable diesel industry supports 65,000 U.S. jobs and more than $17 billion in economic activity each year. Every 100 million gallons of production supports 3,200 jobs and $780 million in economic opportunity. Biodiesel production supports approximately 13 percent of the value of each U.S. bushel of soybeans.