US ethanol group backs major RFS shift in exchange for year-round E15 sales

01.03.2017

The top US ethanol trade group has embraced shifting the Renewable Fuel Standard's point of obligation in exchange for a proposal to approve year-round sales of gasoline blended with 15% ethanol.

The Renewable Fuel Association's about-face on the contentious point of obligation debate has split the biofuel industry, generating sharp criticism Tuesday from Growth Energy and the Advanced Biofuels Association.

RFA President Bob Dinneen said in a statement Tuesday that the group received a call from the Trump administration making it clear that moving the point of obligation -- from refiners and importers to blenders at the wholesale rack -- was inevitable.

"Despite our continued opposition to the move, we were told the executive order was not negotiable," Dinneen said. "Our top priority this year is to ensure consumers have year-round access to E15 and we would like the Trump administration to help cut through the red tape on this unnecessary regulation.

"Consumers are being denied access to the fuel blend due to EPA's nonsensical disparate treatment of E10 and E15 with regard to volatility regulations, preventing E15 from being sold during the summer."

RFA reached the deal with refiner Valero Energy and White House special adviser Carl Icahn, a vocal critic of the ethanol mandate and major owner of refiner CVR Energy, according to media reports. They presented the deal to the White House in a memo laying out how to make the regulatory changes.

An RFS spokeswoman declined to release the memo.

The Environmental Protection Agency closed comments last week on an Obama administration proposal to deny a request to change the point of obligation.

Michael McAdams, president of the Advanced Biofuels Association, said Tuesday that any attempts to change the point of obligation outside that regulatory process would be illegal.

"I'm troubled, I'm really, sincerely troubled at the process surrounding this," McAdams said. "I think we ought to give the new administrator of EPA an opportunity to do his job without being told by the White House what to do on a subject this complicated that shifts this many dollars from one party to the next. You can't run government this way -- it's got to be transparent, it's got to be fair."

Growth Energy attacked the reported deal, saying RFA does not represent a majority of the biofuels industry.

"If true, this proposal would eviscerate America's progress under the RFS and impose indefensible costs on consumers," CEO Emily Skor said in a statement. "Neither RFA nor Carl Icahn have the authority to strike a 'deal.'"

Skor said the proposed change would affect hundreds, if not thousands, of new parties and require new rules, staff and infrastructure.

"Moreover, the EPA is ill-equipped to manage such a large-scale restructuring of fuel markets, which could mean turmoil for retailers, higher costs for consumers, and years of uncertainty for hundreds of thousands of workers in the biofuel industry," she said.


platts

Readers choice: TOP-5 articles of the month by UkrAgroConsult