Shaw opens 2020 IRFA Summit with optimism

By Matt Thompson | January 16, 2020

Monte Shaw, executive director of the Iowa Renewable Fuels Association, kicked off the 2020 IRFA Summit in Altoona, Iowa, by acknowledging the difficulties 2019 brought to the biofuels industry, but expressed optimism for policy changes implemented last year.

“2019 was the first year that Iowa ethanol production was lower than the year before,” Shaw told attendees. He outlined 2019’s challenging growing season, the demand destruction due to small refiner exemptions and the on-going trade war with China.

He also spoke to the rulemaking regarding small refinery exemptions (SREs) announced in December. While he said the industry was disappointed with announcement that EPA would use a three-year rolling average of U.S. Department of Energy recommendations, rather than actual SREs, when reallocating waived volumes, there were positive gains on policy issues in 2019. “We’ve been so focused on what we didn’t get that we’ve been neglected to appreciate what we did,” Shaw said.

Shaw reminded attendees that there has been a growing effort by U.S. Grains Council and other groups to expand trade opportunities in Mexico. He also gave kudos to the Trump Administration for year-round approval of E15. With that approval, there has been more movement by retailers to add the fuel. “Just a couple of days ago, our own Iowa Ag Secretary Mike Naig awarded Elliot Oil Company with the 2020 Renewable Fuels Marketing Award for the first major branded station to offer Unleaded88,” Shaw said, adding “Whether Big Oil likes it or not, we’re well on our way to start making Unleaded88 the new normal for fuel in the United States.” E15, a gasoline blend with 15 percent ethanol, is often marketed as Unleaded88.

And while EPA’s announcement in December was disappointing, Shaw said there’s reason for optimism in 2020. “The final rule did nevertheless create a pathway for refinery exemptions to be fully accounted for,” he said, acknowledging that it’s not certain. “But it is possible for EPA to ensure that 15 [billion gallons] means 15 [billion gallons] going forward,” he said. If that happens, Shaw said, “then 2020 would be the first year that the RFS was every fully implemented at the statutory levels since 2013.”

Shaw said rebuilding trust with EPA will be important in the coming year. “I want to work with EPA to take small steps and large steps to build some of that trust,” Shaw said. “2019 was not a fun year, but I actually think the policy seeds were planted that can grow into a meaningful opportunity for biodiesel producers, ethanol producers and farmers in 2020,” Shaw said.