President Trump emerged from Tuesday’s talks about the nation’s Renewable Fuel Standard with a deal that would satisfy both ethanol producers and oil refiners.
“After several meetings and input from stakeholders on both sides, President Trump is pleased to announce that a final decision has been made that allows E15 to be sold year-round, while providing relief to refiners,” White House spokeswoman Lindsay Walters said in a statement to the Washington Examiner.
“This outcome will protect our hard-working farmers and refinery workers,” she said.
Trump plans to increase the market for ethanol year-round. That will be done by allowing 15-percent ethanol fuels, or E15, to be sold all year and not subject to summer restrictions under Environmental Protection Agency rules.
He also would boost ethanol exports, which have been harmed by Chinese retaliation to Trump’s tariffs, in a way that would increase ethanol credits for the refiners. The supply of credits would be increased, which would reduce the cost. In the past, exports would lose their renewable identification number credits when shipped overseas.
Trump appeared to nix Texas Republican Sen. Ted Cruz’s plan for placing a cap on the price of ethanol credits.
Republican Sen. Joni Ernst, from the ethanol-producing state of Iowa and who was at the meeting, said she was happy about the E15 part of the deal, but had questions about the export part.
She said EPA Administrator Scott Pruitt committed to not pursue the export piece of the deal in a letter sent to her in October.
“While I am still assessing the full implications of the president’s notion to attach Renewable Identification Numbers (RINs) to exported ethanol, an idea Administrator Pruitt committed to not pursue in a letter last October, I am pleased that the president did not move forward with a RIN cap that would have destroyed demand, hurting both farmers and biofuel producers,” she said.
Refiners welcomed the export conditions of the deal.
“Allowing RINs associated with exported biofuel to be used for compliance would go a long way toward addressing the burden of persistently high RIN costs on merchant refiners without hampering domestic biofuel consumption,” said the pro-refinery group Fueling American Jobs Coalition. “It would also greatly advance the export prospects of America’s biofuel industry, which is already the largest in the world.”
The EPA would have the discretion to allow the use of the export RINs for domestic compliance with the Renewable Fuel Standard, but other options that the EPA is taking on its own may not stand up to the law, according to the group.
The agency has been granting exemptions to small refiners owned by larger companies, which the ethanol industry and its supporters have blasted and even sued over in recent weeks. But the pro-refinery group thinks the EPA may be reaching its limits on the exemption front, especially if it looks to burden other refineries with the ethanol requirements.
“We have also heard EPA may consider reassigning volume obligations addressed in small-refiner hardship waivers to be somehow reassigned to larger refiners,” the refinery group said. “We believe that likely violates principles of law and equity, is unworkable, and is unnecessary particularly if the export proposal relieves the actual hardships created by volatility in the RINs market.”
Meanwhile, the ethanol trade group Growth Energy appeared to be beefing up its lobbying in direct response to the Trump deal.
The group announced Wednesday that it hired former Archers Daniels Midland ethanol chief Craig Willis to serve as the group’s senior vice president of global markets, effective June 1. The role would promote U.S. ethanol domestically and abroad.
