Des Moines Register

October 15, 2016

By Donnelle Eller

Iowa farm and renewable fuel groups say a proposal that the U.S. Environmental Protection Agency released Tuesday fails to keep President Donald Trump's promise to boost the sagging market for ethanol and biodiesel.

“We had a deal with the president … but what the EPA rolled out isn’t that deal,” said Monte Shaw, the Iowa Renewable Fuels Association's executive director. 

Jim Greif, president of the Iowa Corn Growers Association, said his group "is outraged" that the EPA's proposal Tuesday doesn't reflect what the administration outlined "only 11 days ago."

On Oct. 4, the EPA said it would begin accounting for the reduction in demand for corn-based ethanol and soybean-based biodiesel that resulted when the administration granted some refineries exemptions from a federal mandate called the Renewable Fuel Standard.

The law, known as RFS, outlines how many gallons of ethanol and biodiesel that oil refiners must blend into the nation's fuel supply each year.

The EPA said Tuesday it plans to use a three-year average to account for the reduction in demand for ethanol and biodiesel resulting from the waivers, using the number of gallons that the U.S. Department of Energy recommends waiving.

But the Trump administration earlier this month told farm groups it would use the average of the actual number of renewable fuel gallons that are waived, which is much larger. "Any proposal that does not account for actual waived gallons under the Renewable Fuel Standard fails to restore the integrity of the law," Greif said in a statement.

The difference between the two is significant, said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

The energy department, which provides an initial review of small refinery exemption requests, most recently recommended granting waivers for 770 million gallons of renewable fuels. The EPA, however, approved waivers for 1.4 billion gallons during its last round of exemptions.

Since taking office, the Trump administration has granted 85 waivers to oil refineries, freeing them from using 4 billion gallons of renewable fuel. The exemptions have killed demand for 1.4 billion bushels of corn used to make ethanol, industry officials say.

"It's not a shock that the EPA is trying to water down" the plan the Trump administration announced earlier this month, Shaw said.

The administration in the Oct. 4 announcement said Trump had made a deal with Iowa Republicans, including U.S. Sens. Chuck Grassley and Joni Ernst, and Gov. Kim Reynolds, to increase renewable fuel demand.

Grassley said in a statement Tuesday that Iowa farmers and renewable fuels plants will have to trust the EPA to adequately account for the waived gallons.

"The ethanol and biodiesel industries have a lot of cause to distrust EPA and that is understandable," Grassley said. "But President Trump brokered this deal and any attempt to undermine it from EPA would represent a betrayal of the president. I expect EPA would not do that after all the work that’s gone into this issue.”

Ernst and Reynolds said in separate statements they would do everything they could to hold the EPA accountable.

“I understand the biofuel industry’s frustration and distrust following the EPA’s announcement today,” Reynolds said. “The next 30-day comment period is crucial to making sure the EPA follows through on the president’s commitment.”

A public hearing is scheduled to be held Oct. 30 in Ypsilanti, Michigan.

Growth Energy, a Washington, D.C., ethanol association, called on the EPA to hold the public hearing in Iowa “so more Midwest families racing to complete this year’s harvest will have an opportunity to share their views.

“The farm families hit hardest by EPA exemptions deserve a seat at the table, and that can’t happen if the EPA refuses to hold a hearing in a central location, closer to millions of voices who cannot afford to leave the farm for days at a time,” said Emily Skor, Growth Energy's CEO.

The decline in demand for ethanol and biodiesel has been a double blow to farmers already dealing with depressed prices for corn and soybeans because of the administration's trade wars with China, Mexico, Canada and other countries.

The current corn ethanol requirement is 15 billion gallons.

Shaw said it will be tough for many farmers to trust EPA.

“We couldn’t trust the EPA to stick to the deal for 11 days,” Shaw said. “We haven’t been able to trust EPA for the last two years with the RFS.”

Few Iowa renewable fuels or farm groups would have supported the Oct. 4 plan if they had known how the EPA planned to implement it, Shaw said.

“We all said it has to be real numbers. It has to be accountable," Shaw said. "And it has to send a market signal.

Grant Kimberley, Iowa Biodiesel Board's executive director, said he believed the EPA's proposal would be "likely to inflict further damage on the already struggling biodiesel industry and farm economy."

Nearly 30 U.S. ethanol and biodiesel plants have closed either temporarily or permanently because of the exemptions. Four are in Iowa.

U.S. Rep. Dave Loebsack, an Iowa Democrat, said the EPA's proposed rule "is another in a long string of broken promises for our farmers and biofuel producers."

The proposal leaves “farmers and biofuel producers with no guarantee that the billions of gallons of biofuels exempted from the mandate would ever be restored, as has long been promised by the Trump Administration and EPA,” Loebsack said.

The Renewable Fuels Association called the EPA's proposal a "step backward."

"It falls short of delivering on President Trump’s pledge to restore integrity to the Renewable Fuel Standard and leaves farmers, ethanol producers, and consumers with more questions than answers," Geoff Cooper, the group's CEO, said in a statement.

"This proposal is not what was promised by the administration just over a week ago and fails to answer President Trump’s personal call for a stronger conventional biofuel requirement of more than 15 billion" gallons, Cooper said.

The Iowa Renewable Fuels Association said the EPA's proposal "reneges on the core principle" of Trump's plan earlier this month.

"It is unreasonable and counterproductive to expect Iowans to put their faith in EPA to fix the small refinery exemption problem when they were the ones who created the crisis in the first place," Shaw said.

The EPA released details of its plan as part of a supplemental document to the 2020 biofuels requirement. It was required to be filed by Nov. 30.

In a statement earlier this month, the EPA said that under its plan, it would seek comments on actions "to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation's fuel supply." But it did not specify how many gallons will be restored beginning next year.

Read the original article: Farm, Renewable Fuel Groups Angered by EPA Plan to Replace Lost Demand for Ethanol, Biodiesel

Ethanol Producer Magazine

September 13, 2019

By Lisa Gibson

Minimizing feedstock cost is one rule for a successful cellulosic ethanol project, according to Mark Yancey, chief technology officer for D3Max. “That can be a very large component of your project costs.”

Yancey spoke Sept. 13 at Lallemand Biofuels & Distilled Spirits’ Alcohol School, held this week in Montreal. The final day of the event focused on cellulosic ethanol.

D3Max partnered with Ace Ethanol in Stanley, Wisconsin, to construct a cellulosic ethanol plant, which is expected to start up in October. Yancey said the D3Max development plan has always been to colocate with an existing ethanol plant.

In a cellulosic project, Yancey continued, avoid feedstock harvest and transportation, make sure it’s available year-round and has a high coproduct value.

Other rules Yancey shared from his experience included those in pretreatment: ensure high solids loading, a low-cost catalyst, and minimize inhibitor production. In Enzymatic hydrolysis, minimize enzyme cost, avoid dilution after pretreatment, and use hemicellulase and cellulase enzymes. In fermentation, ensure both C5 and C6 sugar fermentation, use a robust and low-cost yeast, and aim for a high product yield.

Yancey said issues a cellulosic ethanol plant might face include: feedstock supply, feedstock cost, capital cost per gallon of ethanol, ethanol yield, coproduct value, wastewater and project financing.

The feedstock for the D3Max system is wet cake, making a pretreatment step crucial. The wet cake goes into a reactor, then a clash tank, then to fermentation, beer column, and to dehydration or decanters to recover ethanol or produce feed.

“This is considered separate processing,” Yancey said. “There’s no mixing of the starch or sugars between the two plants. That makes us what EPA calls separate processing.” The separate processing status makes permitting much easier, he added.

Corn oil yield is expected to be 1.2 pounds per bushel, with a dried distillers grains with solubles yield of 10.5 pounds per bushel. That’s an improvement of DCO yield from 0.7 pounds per bushel from a standard dry mill ethanol plant, Yancey said, and a decrease of DDGS from 14 pounds per bushel, but an increase in protein of 27 percent.

“Ace is very happy with the results,” Yancey said.

Key players in the project include Ace and D3Max, as well as Fagen Inc., AdvanceBio, Fluid Quip Process Technologies, DSM, Lallemand and Whitefox Technologies.

The D3Max plant is expected to produce about 3.4 MMgy, increasing Ace’s overall yield of 2.9 gallons per bushel to 3.1 gallons per bushel, Yancey said.

In response to questions about starch in feedstock and the effects of nutrients, Yancey said, “when this is all up, we’ll need to reoptimize the whole facility.

“Everyone is waiting for our plant to start up. The proof will be in the actual commercial demonstration.”

Read the original article: Alcohol School: Yancey Delivers D3Max Project Update

Reuters

September 16, 2019

By Jarrett Renshaw, Stephanie Kelly

U.S. President Donald Trump has tentatively approved a plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners by the Environmental Protection Agency, two sources familiar with the matter said.

The plan is intended to address a major source of anger in U.S. farm country as Trump seeks to hold favor in the Midwest ahead of next year’s election, but it is likely to upset the oil industry, another important political constituency, underscoring the pitfalls of U.S. biofuel policy.

Under the plan, the U.S. EPA will calculate a three-year rolling average of total biofuels gallons exempted from the mandates under its Small Refinery Exemption program and add that figure to its annual biofuel blending quotas each year, the sources said. For 2020, that figure would be 1.35 billion gallons, according to a Reuters calculation.

That would come in addition to a tentative agreement to boost next year’s blending volumes by 1 billion gallons, including 500 million gallons for conventional biofuels like corn-based ethanol and 500 million gallons for advanced biofuels like biodiesel, the sources said.

A court in 2016 ruled that the Obama administration illegally lowered the mandate by 500 million gallons, and part of the current proposed addition would satisfy the decision.

As a result, if the Trump administration followed through on the plan, next year’s total blending mandate would come out to about 22.4 billion gallons, from just over 20 billion in the EPA’s current proposal, according to the Reuters calculation.

The EPA has until the end of November to finalize its 2020 biofuel volumes mandates.

Under the Renewable Fuel Standard, oil refiners are required to blend increasing volumes of biofuels like corn-based ethanol into their fuel each year, to help farmers and reduce imports, but small refining facilities in financial straits can seek waivers.

Trump inserted himself into negotiations between the rival oil and corn industries after his administration recently granted 31 oil refiners exemptions to their blending requirements, infuriating corn farmers and ethanol producers who say the program undermines demand for ethanol at a time the industry is already suffering from a loss of foreign markets.

He and senior administration officials have held a series of meetings with biofuel company officials, chief executives from Marathon Petroleum Corp and Valero Energy Corp, and lawmakers from key farm states including the Republican senators Joni Ernst and Chuck Grassley.

Trump was expected to meet with senators representing oil-producing states on Monday to continue discussions on the issue, sources said.

It was unclear if Trump would secure the backing of the oil industry for the plan without granting it any concessions.

One idea that Trump discussed during the meeting with Marathon and Valero last week to help refiners was to potentially cap the price of blending credits refiners must earn or purchase to comply with the RFS, sources familiar with the matter said.

Senators including Pennsylvania’s Pat Toomey and Texas’s Ted Cruz sent a letter to Trump on Thursday, asking any increase to biofuel volumes be accompanied by safeguards against higher credit prices.

Read the original article: Trump Backs Plan that Would Boost Biofuel Quotas 10% in 2020

Senator Amy Klobuchar

September 12, 2019

News Release

U.S. Senators Amy Klobuchar (D-MN) and Tammy Duckworth (D-IL) led a letter to President Donald Trump today strongly urging him to help rural Americans, and the environment, by rescinding the 31 recently approved small refinery exemptions (SRE) for biofuels. They also urged his Administration to uphold the intent of the Renewable Fuel Standard (RFS). The letter follows recent news reports indicating that the Administration is considering changes to the RFS that would boost biofuel volumes following backlash from farmers after 31 additional SREs were approved on August 8. SREs, or so-called “hardship” waivers, are intended to help small refineries by exempting them from the RFS, but the EPA has issued dozens of waivers, including for some of the most profitable oil companies in the world. The abuse of these waivers has resulted in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. Under the Trump Administration, 85 SREs have been approved, contributing to a reduction in the use of billions of gallons of renewable fuel.

Biofuels are a key pathway toward decarbonizing the transportation sector while lowering gas prices, driving economic growth, and creating jobs. Every gallon of biofuels we use displaces a gallon of oil and cuts carbon emissions. The U.S. Department of Agriculture (USDA) found that first generation biofuels cut greenhouse gas emissions by between 39 and 43 percent.

Klobuchar and Duckworth were joined on the letter by Senator Debbie Stabenow (D-MI), Ranking Member of the Senate Committee on Agriculture, and Senators Tina Smith (D-MN), Dick Durbin (D-IL), Sherrod Brown (D-OH), Ron Wyden (D-OR), Gary Peters (D-MI), and Tammy Baldwin (D-WI).

“In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in thousands of lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns,” the senators wrote.

“The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.”

In June, Klobuchar and Duckworth led a letter, signed with 11 other senators, urging EPA Administrator Andrew Wheeler to cease issuing SREs and requesting that the EPA immediately reallocate the remaining gallons and make public the information regarding any recipients of these exemptions.

The full text of today’s letter can be found below:

Dear Mr. President:

We understand that your Administration has convened meetings to consider proposals related to the Renewable Fuel Standard (RFS) and the continued issuance of small refinery exemptions (SRE), based on recent reports. As you continue to deliberate on a final package, we strongly urge you to rescind the 31 SREs that were approved on August 8, 2019, and to prospectively account for any future SREs when calculating Renewable Volume Obligations (RVO) for 2020.

For the compliance years of 2016, 2017, and 2018, the EPA has approved 85 SREs, all of which have contributed to a reduction of over 4 billion gallons of renewable fuel blending volumes and 1.4 billion bushels of corn. The abuse of SRE authority by the EPA is negatively impacting the rural economy, and the consequences resulting from the continued misuse of these exemptions are becoming more apparent by the day.

In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns.

According to reports, the latest proposal under discussion would increase blending requirements for some categories of renewable fuels including biodiesel, but would fail to rescind the recently granted SREs and delay the reallocation of prospective exemptions until the 2021 compliance year. 

The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.

Thank you for your attention to this issue.

Sincerely,

Read the original news release: Klobuchar, Duckworth Lead Colleagues in Urging President to Help Rural Americans, and the Environment, by Upholding the Intent of the Renewable Fuel Standard