RFA celebrates 15th anniversary of RFS

By Erin Voegele | August 06, 2020

The Renewable Fuels Association on Aug. 6 celebrated the 15th anniversary of the Renewable Fuel Standard by releasing a report detailing the success of the program and hosting a media call to discuss the program’s achievements and current challenges faced by the ethanol industry.

President George W. Bush signed the Energy Policy Act of 2005 into law Aug. 8, 2005, enacting the original RFS program. Two years later, Bush signed the Energy Independence and Security Act of 2007, which expanded and extended the RFS into its current form.

“We’re here today to celebrate and commemorate a defining moment for the U.S. ethanol industry,” said Geoff Cooper, president and CEO of the RFA. “In fact, some would argue this was the most important moment in the industry’s 40-year history.”

Cooper called the Energy Policy Act a remarkable bipartisan success, noting that the legislation passed by overwhelming margins in both chambers of congress. However, that certainly doesn’t mean it was an easy feat to get the RFS into that legislation and signed into law, he added.

“By creating marketplace certainty and predictability, the RFS single-handedly spurred a surge of investment in renewable fuel production facilities across the country,” Cooper said. “We saw farmers get together and pool their resources and work with local banks to build ethanol plants in their communities. We also saw major grain processing organizations, clean energy investors, and technology providers also make substantial investments in the sector.”

“The RFS has been a perfect example of how policy can drive innovation and investments by providing a foundation of long-term market certainty and reliability,” Cooper added, noting the goals of the program were clear—cleaner air, boosting the farm economy, and energy security.

“We can proudly proclaim that the RFS hasn’t just lived up to its ambitious expectations, it has far exceeded them,” he said. “The program has decreased reliance on imported petroleum, it has reduced emissions of harmful tailpipe pollutants and greenhouse gases, it has lowered consumer fuel prices, it has supported hundreds of thousands of jobs in rural America, and it has boosted the rural economy by adding value to the crops produced by our nation’s farmers.”

While opponents to the RFS argue the program distorts the free market, Cooper explained the policy has been remarkably effective in stimulating market competition and giving consumers more choices.

“Simply put, the RFS ensures the renewable fuels like ethanol are able to gain access to a fuel market that had been monopolized for nearly a century and would otherwise be closed to competition, and that’s exactly why the RFS remains so critically important today,” Cooper said.

The program’s success is precisely why it is fiercely attacked by oil interests, Cooper continued. “Because the program has succeeded in replacing petroleum with cleaner renewable fuels, the policy is perpetually in the crosshairs of the incumbent fossil fuel industry and its supporters,” he added. “The oil industry and its supporters continue to devise strategies and tactics intended to frustrate the goals of the RFS, undermine and complicate implementation and mislead the public about the many benefits of renewable fuels.”

Cooper said the misuse of small refinery exemptions (SREs) has significantly eroded RFS blending requirements in recent years. “Now, through inaction and indecisiveness, EPA is creating massive uncertainty and confusion about RFS implementation in the near term,” he added. “We still haven’t seen the 2021 RVO proposal, and EPA has not yet decided on nearly 90 pending small refinery exemption petitions, including 58 so-called gap year petitions that are clearly intended to circumvent the Tenth Circuit Court victory from earlier this year.”

While some believe that the RFS program sunsets in the year 2023, Cooper stressed that is not the case. “Congress clearly intended for the RFS to continue driving innovation and growth in renewable fuels production and usage well beyond 2022,” he said.  “And that’s why we think in this next chapter, the RFS will drive accelerated decarbonization of our liquid fuel supply, we believe it will stimulate increased fuel and engine efficiency, we believe the RFS will further diversify our fuel mix, expand economic opportunities for the farm sector and catalyze even lower prices and competition at the pump for consumers.”

The report released by RFA details the impact the RFS has already had in the U.S. The number of U.S. ethanol plants has increased by 153 percent since 2005, reaching 205. Ethanol production has expanded by 305 percent, from 3.9 billion gallons in 2005 to 15.8 billion currently. The production of animal feed coproduct has also expanded significantly, reaching 39.6 million metric tons in 2019/2020, up 247 percent when compared to 2005. The gross value of industry output was $8.1 billion in 2005. That value has increased to approximately $28.2 billion. Direct, indirect and induced ethanol jobs have grown by 127 percent, reaching the current total of 348,010.

Over the same time period, corn production has increased by nearly 25 percent while planted acreage expanded by only 10 percent. Total cropland in production, however, is down 5 percent since 2005. The season average corn price has increased 80 percent, to approximately $3.60 per bushel. The corn surplus is also up 14 percent when compared to 2005. Net farm income is up 19 percent when compared to 2005.

While gasoline blendstock use is down 6 percent when compared to 2005, the use of ethanol is up 258 percent, reaching 14.5 billion gallons. The ethanol blend rate was 2.9 percent in 2005. The blend rate is now 10.2 percent.

The number of U.S. fuel stations selling E85 and flex fuels is now approximately 5,008, up 1,049 percent when compared to 2005. Only 15 states offered E85 and flex fuel blends in 2005. That number has since expanded to 42. In addition, E15 is now sold in 30 states, with 95 percent of vehicles now approved for use with the fuel.

There are currently an estimated 24 million flex fuel vehicles on the road, up 492 percent when compared to the 4 million that were on the road in 2005.  

Greenhouse gas emissions from transportation fuel have fallen 4 percent when compared to 2005, while emissions per mile traveled are down 12 percent. An estimated 54.1 million metric tons of carbon dioxide equivalent was avoided through the use of ethanol last year, up 707 percent when compared to 2005.

A full copy of the report can be downloaded from the RFA website