OPINION: Bills would help retailers move more low-carbon ethanol

By Troy Bredenkamp, senior vice president for government and public affairs at the Renewable Fuels Association | June 30, 2021

We are pleased that legislation introduced this week will provide a boon for fuel marketers looking to expand their retail operations into higher blends, and as Washington is now working towards a major infrastructure package, we hope these bipartisan proposals will move forward in some capacity.

The Renewable Fuel Infrastructure Investment and Market Expansion Act, by Sens. Amy Klobuchar (D-MN) and Joni Ernst (R-IA), would do two things to help retailers. The bill would authorize $100 million per year to establish a U.S. Department of Agriculture grant program for the installation of new fuel pump infrastructure or the converting of existing pump infrastructure to deliver ethanol blends greater than 10 percent and biodiesel blends greater than 20 percent. It also would direct the EPA to finalize its proposed rule on E15 fuel dispenser labeling and underground storage tank compatibility.

The Renewable Fuels Association and many of our allies support this bill because we believe, as do the senators, that fuel marketers want to offer better fuel options—and drivers want fuels that are more environmentally friendly and come at a lower cost. Higher blends of lower-cost, low-carbon ethanol would be ideal for retailer and consumer alike, and good for the environment as well.

This bill would enable a program similar to USDA’s recent Higher Blends Infrastructure Incentive Program, HBIIP, which was a $100 million grant program for infrastructure. Under the HBIIP program, RFA staff helped 33 companies gain grants in 21 states for $24 million in USDA funding matched by $40 million in retailer funding—for a total of $64 million in new higher blends infrastructure. This will add over 1,200 new dispensers at 244 locations. If this infrastructure bill were to become law, you can be sure RFA will continue its four-decade history of technical and regulatory expertise to help retailers be part of this new program and received assistance in enhancing their higher blend infrastructure.

A second bill provides another missing link between drivers and higher ethanol blends by promoting the manufacturing of more flex-fuel vehicles (FFVs). Sens. Klobuchar and Ernst note that FFV production peaked in model year 2014 at 2.8 million new vehicles. Thereafter, FFV production fell to just 716,000 for model year 2019 and has continued to fall due primarily to the expiration of a Corporate Average Fuel Economy (CAFE) greenhouse gas credits for FFVs afforded to automobile manufacturers. Their new Clean Fuels Vehicle Act would get more FFVs on the road by restoring these CAFE credits and creating a $200 refundable tax credit for each FFV manufactured for the light-duty vehicle market.

Electric vehicles may be the platform attracting the attention of many policymakers at this time, but the United States remains decades away from realizing full electrification, if ever. Many questions remain regarding the large amounts of natural resources needed to produce the millions of batteries needed for the EVs of the future, in addition to the need for re-charging infrastructure that is decades away.

In the meantime, renewable fuels continue to provide a low-carbon liquid fuel option that can be more rapidly deployed in higher blends and is made in America and lower in cost. These biofuels infrastructure incentive bills will help retailers and drivers do their part for the climate and the environment.