EPA’s ethanol production mandate at the max; biodiesel requirement ‘disappointing’

DES MOINES — The U.S. Environmental Protection Agency is proposing that the federal production mandate for “conventional” ethanol remain at the maximum in 2018, but the requirement for biodiesel is causing concern in the industry.

Monte Shaw of the Iowa Renewable Fuels Association says it means at least 15 billion gallons of corn-based ethanol should be produced next year, which is the maximum amount under the Renewable Fuels Standard.

“That is good news that there was no effort to move that backwards,” Shaw says.

However, the EPA is suggesting the mandatory level for soybean-based biodiesel production remain the same.

“That’s the first time that the annual proposal has not increased biodiesel by at least some amount,” Shaw says, “so that is, maybe, some cause for concern.”

The Iowa Biodiesel Board calls the EPA’s proposal a “setback” at a time when the industry was “ready to take a large leap forward.”

The EPA’s recommended federal mandate for next year’s production of “cellulosic” ethanol that’s made from plant materials, like switch grass or corn stalks, is reduced as well.

“I’m not shocked that it went down because we didn’t meet the 2016 number,” Shaw says. “People were wanting to pull that back a little closer to reality.”

There’s a public comment period underway on these rules and Shaw says the industry will debate whether the EPA has settled on the right numbers. President Trump, as a candidate, visited an ethanol plant near Gowrie and pledged to support the ethanol industry.

“We are very excited that President Trump did uphold his campaign promise on the ethanol side, so that is a big win for ethanol and something that will help Iowa farmers and consumers,” Shaw says. “But we definitely have our work cut out for us on biodiesel and some of the other advanced biofuels.”

Iowa is the nation’s leading producer of corn-based ethanol, plant-based ethanol and soybean-based biodiesel.

Congressman Dave Loebsack, a Democrat from Iowa City, said in a written statement that “never in its history” has the EPA failed to raise the production mandate for “advanced biofuels” and Loebsack said Trump “has turned his back on Iowa’s farmers and rural communities.” Republican Senator Joni Ernst issued a written statement, saying she’s “pleased” with the new administration’s decision on convention ethanol, but Ernst said she is “disappointed” in the EPA’s recommendation on biodiesel.

Governor Kim Reynolds issued a statement, too, saying Trump “works for and with our state rather than against it.

“I commend the Trump administration for its commitment to keeping the Renewable Fuel Standard at the level set by Congress,” Reynolds said. “…I am disappointed biodiesel levels are not higher, but Iowa will continue working with the administration to increase marketplace opportunities for biodiesel.”

Senator Chuck Grassley, in his written statement, called the EPA’s proposal “a mixed bag.”

“While I’m glad the EPA’s proposal holds steady the requirement of 15 billion gallons for conventional ethanol, the lack of any increase for biodiesel is a missed opportunity,” Grassley said. “The proposal fails to recognize the ability of the domestic biodiesel industry to produce at much higher levels.”

Iowa Agriculture Secretary Bill Northey issued a written statement as well.

“The announced 2018 Renewable Fuels Standard level for conventional biofuels is good news for corn ethanol. I agree with others in the industry that a higher level for the 2019 biodiesel level would make sense,” Northey said. “I appreciate the Administration following through on their commitment to support the renewable fuels industry and release these levels in a timely manner so that we can provide meaningful comment to EPA.”

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