Trump's stance concerns ethanol, grain groups

10.05.2018

Donald Trump on May 8 reaffirmed he will approve year-round sales of 15% ethanol fuels without a Renewable Identification Number (RIN) cap. However, he has asked Environmental Protection Agency Administrator Scott Pruitt and Secretary of Agriculture Sonny Perdue to work out the details on an additional item: Reallocating RINs from exempted small refinery gallons to ethanol exports.

“We appreciate the Trump administration’s strong support of the Renewable Fuel Standard, but the U.S. Grains Council (USGC) is concerned any move that would relate RINs to exporting ethanol could be severely detrimental to the competitiveness of ethanol exports and would harm the U.S. grains industry,” said Tom Sleight, president and chief executive officer of the USGC. “We believe RINs for exported ethanol could be perceived as an export subsidy, against our World Trade Organization obligations. They could put a target on our back globally.”

He said U.S. ethanol producers are some of the most cost-competitive industries in the world, and as such, believe in free and fair trade within the global marketplace. Last year, ethanol exports reached a record high of 1.37 billion gallons.

“We are already seeing the impact of trade policy barriers on ethanol exports and we would like to have the U.S. Trade Representative (USTR) look at the implications of export credits for RINs,” Sleight said.  

The Renewable Fuels Association (RFA) said great concern remains regarding the number and impact of recent RFS compliance exemptions that have been granted to highly profitable refining companies. The RFA said it continues to believe an effort should be taken to reallocate the exempted volumes, which likely totals 1.6 billion gallons or more.

“We are very grateful the president has affirmed his commitment to remove the regulatory barriers to the year-round use of E15, and we look forward to working with EPA to get this done as quickly as possible,” said Bob Dineen, president and CEO of the RFA. “We are also pleased that the president appears to recognize the harm that has been done to the RFS, ethanol producers, and rural America from the unprecedented number and scope of hardship waivers.

“However, the notion of allowing exported ethanol to count toward an oil company’s RFS obligation is extremely problematic. Depending on potential implementation, allowing exports to qualify for RFS compliance could dramatically reduce domestic ethanol demand, while most certainly resulting in retaliatory trade barriers from the countries importing U.S. ethanol. Our trade partners in the international market certainly would not understand why the lowest-priced ethanol in the world requires an export subsidy.”


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