Biofuel Industry: EPA’s “Flat” Blending Volumes Not What The Industry Wanted – DTN

    Photo: Dan Caffrey, @danocaffrey

    Despite a major push from the Midwest to bolster Renewable Fuel Standard volumes for biomass-based diesel and cellulosic ethanol, in the end, the U.S. Environmental Protection Agency left its final numbers released on Thursday virtually untouched from the original proposal.

    Though the biodiesel industry pressed President Donald Trump’s administration for higher biomass-based diesel volumes above the proposed 2.1 billion gallons for 2019, the EPA left that number unchanged. The agency originally proposed a cut, while the industry wanted the number set at 2.5 billion gallons.

    The EPA’s final biomass-based diesel numbers came as a huge disappointment to an industry that maintains it has the capacity to produce 2.6 billion gallons.

    “EPA Administrator (Scott) Pruitt has disappointed the biodiesel industry for failing to respond to our repeated calls for growth,” said Doug Whitehead, chief operating officer of the National Biodiesel Board.

    “These flat volumes will harm Americans across several job-creating sectors — be they farmers, grease collectors, crushers, biodiesel producers or truckers — as well as consumers.”

    Corn ethanol blending requirements were set at 15 billion gallons for 2018, with overall biofuel blending obligations slightly higher overall, based on the final RFS volumes announced. Fifteen billion gallons of corn ethanol amounts to about 5.4 billion bushels of corn demand supported by the RFS.

    The overall total Renewable Volume Obligation, or RVO, for 2018 was set at 19.29 billion gallons. That represents a slight bump from the original proposal of 19.28 billion gallons. The agency had considered cutting the number to 19.24 billion gallons. The bump comes from a slight increase in the advanced biofuels volumes.

    The agency set the advanced category, including biomass-based biodiesel, at 4.29 billion gallons. EPA’s original proposal was to reduce the advanced number from 4.28 billion gallons to 4.24 billion gallons.

    DTN Market Analyst Todd Hultman said it was unlikely the final volumes would affect markets.

    However, January soybean oil was up 31 cents. He said that suggests traders might regard the agency’s decision to leave biomass-based biodiesel volumes at 2.1 billion gallons as “slightly favorable, or at least a relief” that the final volume wasn’t cut.

    “The current environment for grains is so bearish that I don’t expect to see any significant price moves from this news,” Hultman said. “Of course, keeping the mandates near their expected levels is helpful to support corn prices, but that is outweighed by the market’s bigger concern of all the corn we have to work through this season.”


    Cellulosic ethanol’s blend requirement was set at 288 million gallons for 2018. The agency originally proposed a 73-million-gallon cut to 238 million gallons. Although the agency raised the number in the final rule, it still represents a cut from the 2017 number of 311 million gallons.

    The EPA originally proposed a much higher cellulosic ethanol number in its plan sent to the Office of Management and Budget in June.

    Interagency review documents posted to the docket for the latest RFS volumes show the agency originally called for 384 million gallons for the cellulosic RVO, which would have been an increase above the 311 million gallons in 2017.

    The June 23 version of the draft rule, however, set that number at 238 million gallons, making the total volumes in the RFS even lower.

    In the July 21, 2017, proposed rule posted in the Federal Register, the EPA said it believed “new data warrants a change to the methodology for projecting liquid cellulosic biofuel in an effort to make the projections more accurate.”

    A review of the documents posted on the RFS proposal, shows EPA initially proposed RVOs that would have provided modest growth for all categories of the RFS.

    As detailed in an EPA briefing to OMB on May 11, the original proposal called for a total RVO of 19.38 billion gallons in 2018, up slightly from 19.28 billion gallons in 2017.

    Poet CEO Jeff Broin said cellulosic ethanol developers continue to need a stronger RFS.

    “Unfortunately, this final rule fails to recognize the enormous opportunity before us to harness our nation’s vast cellulosic resources for higher-performing and lower-cost fuels,” he said.

    Sen. Charles Grassley, R-Iowa, said the renewable volume obligations “fall short of the full potential” of the U.S. biofuels industry.

    “That is disappointing, particularly the lack of increase for biodiesel levels and the cut in cellulosic level requirements,” Grassley said in a statement.

    “Increases in the volume requirements are justified and would be good public policy. Congress intended for the RFS to drive growth in biofuels across all categories. Contrary to that goal, this final rule does little to encourage investment and growth in advanced biofuels.”


    Renewable Fuels Association President and CEO Bob Dinneen said there are silver linings.

    AgFax Weed Solutions

    Unable to display feed at this time.

    “We are pleased that the final rule maintains the statutory 15-billion-gallon requirement for conventional renewable fuels like corn ethanol,” he said in a statement. “Maintaining the 15-billion-gallon conventional biofuel requirement will accelerate investments in the infrastructure necessary to distribute mid-level ethanol blends like E15 and E30, and flex fuels like E85.”

    On the cellulosic ethanol front, industry officials have said the EPA’s original proposal to cut volumes sent the wrong signal to an industry on the cusp of commercialization.

    Dinneen said he was pleased the agency took a second look.

    “It is also encouraging that EPA appears to have absorbed the tens of thousands of comments from American ethanol producers, farmers, consumers, veterans, and others who suggested the proposed rule was unnecessarily pessimistic with regard to the total renewable fuel volumes, and cellulosic ethanol volumes specifically,” he said.

    Sen. Deb Fischer, R-Neb., said the final volumes “provide greater clarity for Nebraska’s agriculture producers and the innovators focused on the future of biofuels.”

    Growth Energy CEO Emily Skor said the agency’s “on-time announcement” helps provide market certainty.

    “We would like to have seen a boost to the target blending levels for cellulosic biofuels, and we will continue to work with the administration to advance the RFS goal of further stimulating growth and showing U.S. leadership in 21st century fuels,” she said.

    Brian Jennings, CEO of the American Coalition for Ethanol, said the final rule “represents a modest step in the right direction for the RFS in 2018.

    “Beyond sending a generally positive signal to the rural economy, increased blending targets also reassure retailers that it makes sense to offer E15 and flex fuels to their customers.”


    American Petroleum Institute Downstream Group Director Frank Macchiarola said in a statement the RFS needs to be fixed. API consistently has called for setting a cap on ethanol blended in gasoline at 9.7%.

    “The Renewable Fuel Standard is broken and needs comprehensive reform,” he said.

    “Since the RFS was instituted more than a decade ago, the U.S. has greatly reduced its dependence on crude oil imports. So this program is trying to solve a problem that no longer exists while creating real problems for consumers. Administrator Pruitt, therefore, faces the daunting task of implementing a broken program that was based on incorrect assumptions made over a decade ago.”

    National Chicken Council President Mike Brown said, “EPA just keeps trying to pump more ethanol into a fuel market that doesn’t have room. Over the past decade the RFS has created an incredibly volatile corn market to the detriment of all corn users, and producers too. Today’s announcement adds to the long list of reasons that Congress should repeal the RFS and the mess it has created for both food and fuel markets.”

    Todd Neeley can be reached at

    Follow him on Twitter @toddneeleyDTN

    The Latest

    Send press releases to

    View All Events

    [ecs-list-events limit="5" key="start date" order="asc"]
    Send press releases to

    View All Events