EPA To Stick With RFS Proposal That Ethanol Industry Opposes, Says Report

With the EPA expected to act as soon as Friday, biofuel supporters have called for President Trump's direct intervention to assure a market for 15 billion gallons of corn ethanol in 2020. Two unnamed sources told Reuters that the EPA is sticking with an October proposal that the biofuel industry and farmers say undermines the targets set in the Renewable Fuel Standard.

"EPA has reviewed all comments received during the comment period from the public, and we plan to finalize the rule this winter," said agency spokesman Michael Abboud on Wednesday. He did not respond to questions about the timing or content of the RFS for the new year.

At issue are EPA waivers that exempt some small-volume petroleum refineries from the RFS and how to make up for the gallons "lost" to those waivers. The EPA proposed in October to take the exemptions into account when it calculates the percentage of ethanol that refiners mix into gasoline for cars and light trucks. Rather than use a three-year average of its waivers — the approach expected by biofuel advocates — the EPA said it would use a three-year average of Energy Department estimates of potential waivers. Critics say the DOE estimates could be much smaller than the EPA's waivers.

"It's clear to us that only your direct intervention can stop the EPA from sabotaging this important rule, and we are counting on you to fully restore the markets that have been taken away from American farmers and biofuel producers," biofuel supporters from 41 states said in a letter to Trump. Leaders of the Iowa Corn Growers Association delivered the letter to the White House during a meeting with White House economic adviser Larry Kudlow on Tuesday.

Kudlow told the group that the EPA was going ahead with its October proposal, sources told Reuters.

The ethanol industry says the waivers have reduced ethanol demand by hundreds of millions of gallons over the years. Since Trump took office, the number of small-refiner exemptions has soared.

Farm groups and their allies in Congress have repeatedly called on Trump to take their side in disputes with the EPA.