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EPA sets new 2014-2016 volumes

By Staff | Dec 3, 2015

-Farm News file photo THE EPA’s new volumes for 2016 and 2017 for biofuels will give Iowa biodiesel plants like SoyEnergy in Mason?City, a boost. Ethanol plants, however, saw their volumes cut.

By LARRY KERSHNER

kersh@farm-new.com

WASHINGTON – The Environmental Protection Agency Monday finalized the volume requirements and associated percentage standards under the RFS program in calendar years 2014, 2015 and 2016.

Industry spokesmen accused the EPA of making winners of biodiesel and advanced biofuels and losers of ethanol manufacturers.

The decision allows for an 11 percent growth in biodiesel and 35 percent in advanced biofuels, while ethanol takes a loss, leading critics to saying cutting ethanol’s 2016 volume was unlawful.

The EPA said its ruling will grow biodiesel standards steadily over the next several years, increasing every year to reach 2 billion gallons by 2017.

The EPA is finalizing the volume requirements and associated percentage standards that apply under the RFS program in calendar years 2014, 2015 and 2016 for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel.

It is also finalizing the volume requirement for biomass-based diesel for 2017.

The final requirements will boost renewable fuel production and provide for robust, achievable growth of the biofuels industry, an EPA release said.

The final rule considered public comments the EPA received on the proposal and incorporates updated information and data.

The EPA is finalizing 2014 and 2015 standards at levels that reflect the actual amount of domestic biofuel used in those years, and standards for 2016 (and 2017 for biodiesel) that represent significant growth over historical levels.

Biodiesel growth

Wayne Fredericks, an Osage-area farmer and president of the Iowa Soybean Association board, said the industry was hoping for higher numbers, but described Monday’s ruling as moving biofuels in a positive direction.

“While the bump in total volumes for biodiesel were not to the levels we advocated,” Fredericks said, “today’s announcement certainly continues to move us in the right direction.”

Fredericks added the timing of the announcement was right, due to the increasing demand for soybeans.

“The benefits of soy biodiesel are well documented including the support it provides the livestock and poultry sectors,” he said. “As more soy oil is processed for biodiesel production, more soy meal is available for livestock feed.

“Demand for biodiesel creates demand for soy oil, which, in turn, lowers the cost of soy meal and the price of rations for our poultry and livestock farmers.

He said a recent study determined biodiesel’s demand for soy oil “lowered feed prices by as much as $21 per ton and raised the price of soybeans by 62.5 cents per bushel.”

The EPA volumes for biomass-based diesel are:

  • 2014: 1.63 billion gallons.
  • 2015: 1.73 billion gallons.
  • 2016: 1.90 billion gallons.
  • 2017: 2.00 billion gallons.

These volume levels represent a modest improvement over the original proposed rule, Fredericks said. The proposed pule called for 1.63 billion gallons in 2014, 1.7 in 2015, 1.8 in 2016 and 1.9 in 2017.

“As an industry,” Fredericks said, “we called for increased totals and production of biodiesel from the proposed volumes released earlier this year and our voices were heard.

“While we may not have achieved all we wanted, hitting 2 billion gallons in 2017 shows how far we have come as an industry.”

Fredericks said the final numbers set a precedent for growth.

“As the leading state in biodiesel production,” he said, “we look forward to seeing the numbers grow to match the significant capacity of the industry in the future.”

Angry at the EPA

But not everyone is willing to to accept a meager gain in the RFS.

Bill Northey, Iowa Secretary of Agriculture, who farms near Spirit Lake, called the EPA’s announcement Monday disappointing.

“There is no reason for EPA to ignore the law and lower the amount of renewable energy included in the nation’s fuel supply,” Northey said. “We need a strong RFS to encourage retailers to invest in the infrastructure necessary to make renewable fuels available to customers.

“With the low price of corn and beans, now is the time to grow the renewable fuels industry, not undermine it.

“Unfortunately, this continues the pattern by EPA in recent years to give in to the demands of Big Oil rather than stand up for clean-burning, home-grown renewable fuels.”

Ethanol loses

Bob Hemeseth, a farmer from Decorah and President of the Iowa Corn Growers Association, said he was no fan of Monday’s announcement dropping the volume of corn ethanol levels by nearly 500 million gallons for 2016.

“While we are pleased EPA has taken a step forward to revise its original proposal,” Hemeseth said, “any reduction in the RVO below the statutory levels will significantly cut America’s use of cleaner burning renewable fuels and halt continued demand for corn-based ethanol.

“At a time when corn prices are below the cost of production, this will be a blow to Iowa’s rural economy.”

RVOs are set annually by the EPA to dictate the amount of renewable fuel that is blended into the motor fuel supply. The RFS is a federal law that requires domestic, renewable, cleaner burning ethanol to be blended into the nation’s fuel supply.

Hemeseth called it one of America’s most successful energy policies.

“Contrary to the erroneous criticism spread by the oil industry,” he said, “biofuels can meet growing consumer demand for these home-grown fuels.

“We should be strengthening our commitment to renewable fuels, not taking a step backwards.”

Saying ICGA’s number one priority is building demand for corn and corn products, Hemeseth vowed ICGA will protect RFS and hold the EPA accountable.

Likewise, Jeff Broin, POET chief executive officer, said “the EPA volumes are a move in the right direction, and they call the oil industry’s bluff about our ability to surpass 10 percent ethanol use in the U.S.

But Broin added that the numbers fall short of the ability to produce clean and domestic ethanol.

“I look forward to breaking the so-called blend wall next year and proving this country’s ability to replace more imported oil with biofuels produced within our borders,” he said. “In the future, we need to see a stronger and more consistent commitment to renewable fuel from Washington if we are ever going to realize the true potential of renewable fuels, including the development of cellulosic ethanol.”

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