Biofuel groups weigh in on EPA’s E15/RIN reform proposal

By Erin Voegele | April 29, 2019

The comment period on U.S. EPA’s E15/RIN market reform rule closed April 29. Several biofuel trade groups filed comments in support of E15, but expressed opposition to the agency’s proposed RIN market reforms.

The Renewable Fuels Association said it “strongly supports” EPA’s approval to allow E15 to take advantage of the 1-pound-per-square-inch Reid vapor pressure (RVP) waiver that currently applies to E10 during the summer months, noting the move to allow year-round sales of E15 will open the marketplace more broadly to a fuel that provides consumers with higher octane, lower cost, and reduced tailpipe emissions.

“E15 already has a proven track record for saving drivers money and reducing emissions, but the fuel has been unfairly held back by an antiquated and anticompetitive EPA regulatory barrier,” said RFA President and CEO Geoff Cooper, noting that last October President Trump promised to eliminate the summertime ban on E15. “President Trump was correct when he called the summertime prohibition on E15 ‘unnecessary’ and ‘ridiculous,’ and we are pleased that EPA’s proposed regulatory amendments would finally allow gasoline retailers across the country to offer E15 to their customers year-round. When finalized, this rule will enhance competition and provide greater consumer access to cleaner, more affordable fuel options.”

With only 32 days remaining before the June 1 start of the summer driving season, Cooper called on the EPA to quickly complete the rule “and ensure it is finalized in a manner that truly opens the market to E15.”

The RFA, however, discouraged the EPA from finalizing its proposed renewable identification number (RIN) market reforms. “While RFA is supportive of enhancing transparency in the RIN marketplace, we do not believe any of the four primary RIN reform options in the proposed rule would accomplish that objective,” the group said in its comments. “In fact, RFA is concerned that some of the major changes proposed by EPA may be counterproductive, undermine the efficient operation of the RIN market mechanism, and greatly expand administrative burdens for all parties affected by the RFS.”

Growth Energy also called on the EPA to act quickly to finalize the E15 rule. “Unless the EPA acts quickly, the summer market for E15 will be lost, which means higher fuel prices for consumers and another devastating blow to America’s rural workforce,” said Growth Energy CEO Emily Skor. “We cannot afford to let anything derail this opportunity to help revitalize growth in the heartland, and urge regulators to get this rule over the finish line by June 1, just as President Trump directed. Our submission today provides clear guidance on how the agency can strengthen the final rule, open new markets for American biofuels, and protect investments that are working to deliver cleaner, more affordable fuel options to consumers.”

Like the RFA, Growth Energy expressed strong opposition to the RIN market reform component of the rulemaking. In its comments the trade group said the agency’s proposed RIN reforms could actually create the very market distortions they are intended to remedy.

In its comments, the American Coalition for Ethanol strongly supported EPA’s proposal to extend the 1-psi RVP waiver to E15 but urged the agency to use this rulemaking as a timely opportunity to take steps to deregulate the fuel market for higher ethanol blend use by allowing all mid-level ethanol blends to receive the 1-psi waiver, as well as to discard of its reforms to how RIN credits are handled under the RFS.

“E15 is a clean, safe, and low-cost fuel which can be used in more than 90 percent of the cars on the road today,” said Brian Jennings, CEO of ACE, in his written comments. “Since E15 typically costs 2 to 10 cents per gallon less than E10 and gasoline and has a higher octane rating (88 AKI), allowing its sale year-round would give consumers the option to buy a higher quality fuel and save money at the pump. It would also reduce refiner RIN costs and open market access for surplus corn.”

On EPA’s proposed RIN reforms, Jennings said ACE believes they “would have the effect of reducing liquidity in the RIN market, consolidate power in the hands of certain oil refiners, and limit fuel wholesalers, blenders and retailers from using RIN value to sell higher blends of ethanol. Taken together, the RIN reforms constitute a poison pill which is incompatible with the goal of making E15 available to consumers year-round.”

The National Biodiesel Board expressed appreciation for the EPA’s efforts to enable the growth of biofuel use by allowing year-round E15 sales, but spoke out against the agency’s RIN reform proposals.

“The proposed RIN market reforms are unnecessary, as EPA has yet to see data-based evidence of RIN market manipulation. Reforming a system that, while certainly not perfect, is working as intended with no evidence of manipulation has the potential to disrupt and even undermine the system that obligated parties use to demonstrate compliance with the RFS,” NBB wrote in its comments.

“We ask that the agency use this proposed rule as an opportunity to provide transparency to the small refinery exemption process and address the timing of granting these exemptions,” the NBB continued.

 “Right now, retroactive small refinery exemptions are having the most negative impact on RIN markets, destroying demand for more than 360 million gallons of biodiesel and renewable diesel,” said Kurt Kovarik, vice president of federal affairs at NBB. “Rather than unneeded reforms that could further disrupt the RIN market, EPA should increase transparency around the small refinery exemptions, end its practice of encouraging retroactive petitions, and ensure that annual volumes that it set are met.”