Grassley Comments on Reported RFS Cuts, Vilsack Defends Administration’s ‘Stable’ Approach to Blending Targets

As corn growers and the renewable fuels industry await EPA to release the Renewable Fuels Standard (RFS) blending requirements for 2020, 2021 and 2022, rumors continue to surface as to what those updated numbers may be.

On Wednesday, Reuters released an exclusive story citing documents that showed EPA is mulling significant cuts to biofuel blending levels. The report outlined the EPA proposal, which would reduce the mandates for 2020 and 2021 to about 17.1 billion gallons and about 18.6 billion gallons. Reuters also reported the agency would set the 2022 levels at about 20.8 gallons, calling it a win for the oil industry.

The Reuters story, on which the EPA wouldn’t comment but cautioned the numbers are subject to change, stated the updated 2020 levels would be lower than what was finalized for 2020 before the COVID-19 pandemic hit.

The news comes nearly a month after another Reuters report claimed the Biden administration was preparing to suggest lowering the renewable fuel volume requirements within the RFS. Citing sources, the news caused grain and oilseed prices to take a nosedive. 

Agriculture Secretary Tom Vilsack Responds 

AgriTalk host Chip Flory pressed Agriculture Secretary Tom Vilsack on the subject Wednesday, asking if rumors the final EPA numbers would be released Friday, Sept. 24. Vilsack said while he didn’t know timing, EPA would release the numbers when the agency is ready.

“I don't know what the numbers will be,” Vilsack told Flory. “What I do know is that that it's fair to say that there were some significant disruptions during 20 and 21, as a result of the pandemic, certainly during 20 [we saw] significant disruptions. And the impact that the pandemic had on numbers, you know, the administrator would know, the EPA would know. But at the end of day, I'm going to look for ways in which we a USDA can provide help and assistance. That's why we are prepared to provide $700 million of assistance now and additional resources above and beyond that, for infrastructure to expand the capacity to get higher blends out there to consumers. We're going to continue to do what we can't USDA to support this industry.”

Grassley Voices Concern 

Sen. Charles Grassley (R-IA) was also on AgriTalk Wednesday. When asked about the Reuters story, Grassley said at this point, the rumor is just a rumor. He went on to tell Flory EPA has not confirmed any of it but made clear that if the Reuters story holds true, it could be detrimental to ethanol, and possibly even biodiesel. 

 “When Biden was campaigning in Iowa, he supported ethanol,” Grassley said on AgriTalk. “I've had good conversations with the EPA director on it. And I thought they were favorable to it. And I don't know the rationale behind it, but it could have something to do with their promoting of electric vehicles. It surely can’t have anything to do with their caving in to big oil, because they don't like fossil fuels at all.”

Making the Case for Stability with RFS Release 

While no reports have been confirmed, Vilsack pointed out that no matter what is released by the Biden Administration, he says one thing is certain: it will provide stable numbers that won’t waiver to carveouts for small refinery exemptions and other possible requests, taking a slam at the Trump Administration’s track record over four years.

 “I think what people have to understand about the RFS is the most important thing to it is stability,” Vilsack told Flory. “In my view, the most important thing is to be able to count on the numbers that you're provided. I contrast that to the previous administration that basically gave you a number and then basically through a series of waivers reduced that number. So, there was always instability, always uncertainty. I think [EPA] Administrator Regan, what his job is, he really wants to make sure that the numbers are solid, make sure that they're set that they are, they are supported by the facts and that they are real, that there isn't going to be a liberal use of the waiver process that will basically make those numbers not real.”

Biofuels Groups Respond

While the Renewable Fuels Association (RFA) didn’t comment on the Reuters story regarding rumored changed to the RFS, the group did email reporters saying an erroneous e-mail being sent to some reporters contained fabricated information, and an email that didn't help the rumor mill Wednesday.

“We’ve been made aware that some reporters may be receiving an email that includes fake 2020-2022 RVO numbers that were supposedly shared by RFA with its members. We want you to know that this is a complete fabrication and a shameful “spoofing” attempt. We are trying to get to the bottom of who is sending this and why. RFA never sent any such email or circulated any potential RVO numbers to our member companies.”

RFA went on to say it doesn’t have information or confirmation regarding the 2021-2022 RVO numbers and are “anxiously awaiting” the release of those RVO proposals.

The Case for Supporting Low-Carbon Biofuels

Just last week, Growth Energy urged Biden to upload his commitments to clean energy, commitments that were referenced by Grassley on AgriTalk Wednesday. During a virtual fly-in, Growth Energy sent a letter urging Biden to take clear action on climate change by upholding the RFS, which Growth Energy says supports low-carbon biofuels.

“If we are to achieve net-zero by 2050, we must use all tools in the toolbox – including biofuels,” Growth Energy stated in the letter. The group also stated fuels like ethanol reduce carbon emissions by 46% over their full lifecycle.

“It is vital that conventional biofuel blending targets meet the15-billion-gallon minimum required by law,” the letter went on to say.

Renewable Identification Number (RIN) values tanked Tuesday, possibly ahead of the Reuters news. However, corn prices seemed to shake off the Reuters report, still trading in the green mid-day.