Ending Unjustified RFS Waivers Will Put America on a More Sustainable Path

Washington, D.C. (June 11, 2019) – The Biotechnology Innovation Organization (BIO) today expressed support for a U.S. Senate letter, authored by Senators Amy Klobuchar (D-Minn.) and Tammy Duckworth (D-Ill.), requesting U.S. Environmental Protection Agency (EPA) Administrator Andrew Wheeler end the practice of granting small refinery hardship waivers under the Renewable Fuel Standard (RFS) for large or unqualified refiners and immediately reallocate the gallons of biofuels lost as a result of the waivers. Klobuchar and Duckworth were joined on the letter by Senators Mazie Hirono (D-Hawaii), Dick Durbin (D-Ill.), Tina Smith (D-Minn.), Ron Wyden (D-Ore.), Michael Bennet (D-Colo.), Tammy Baldwin (D-Wis.), Jeff Merkley (D-Ore.), Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), and Kirsten Gillibrand (D-N.Y.).

The following statement may be attributed to Stephanie Batchelor, acting executive vice president of BIO’s industrial & environmental section:

“The senators in this letter are right to call on EPA to end its practice of granting unjustified RFS waivers. The current policy undercuts American farmers and biofuels producers, generates market uncertainty, and negates the benefits of the agency’s past clean air actions. If the United States is to significantly reduce its transportation sector’s harmful greenhouse gas emissions and bolster U.S. energy security, then we must embrace a renewable fuel future and promote the development of new, innovative biofuels. Reversing the unprecedented rate of waivers, in addition to allowing the year-round use of 15 percent biofuels in gasoline, will put our country on a more sustainable path and uphold the Trump administration’s commitment to our nation’s farmers and biofuels producers. We thank the senators who signed this letter, and BIO will continue to engage with Administrator Wheeler on this important issue.”

A PDF of the letter is available here. Text of the letter is below.

Dear Administrator Wheeler:

We are extremely concerned about the Environmental Protection Agency’s (EPA) recent actions to continue to improperly grant small refinery hardship waivers under the Renewable Fuel Standard (RFS). EPA’s continued manipulation and misuse of the small refiner waiver authority is undermining the integrity of the RFS and disadvantaging farmers.

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 43 percent, and Argonne National Lab reports that cellulosic biofuels cut GHG emissions between 70 percent and 126 percent.

Competition also helps to reduce prices, and the gasoline market is no exception. As of June 7, 2019, the price of gas with 10 percent ethanol is 20 cents cheaper than gas without ethanol.

Yet, rather than follow congressional intent in the Renewable Fuel Standard (RFS) and follow through on the promises made to rural America, the EPA and the Administration are providing waivers, in secret, to help some of the largest oil companies and refiners evade their compliance obligations under the Clean Air Act.

Ethanol prices have fallen to their lowest levels in over a decade. Renewable Identification Numbers (RIN) prices are down more than 80 percent as compared to last year, providing massive relief to refiners choosing to buy credits to comply with the RFS rather than produce renewable fuels. In fact, one oil refiner re-allocated its savings from lower RIN prices and purchased three ethanol plants, calling into question why refineries really needed these savings if they were not being used to lower expenses or pay employees.

Since 2017, refinery waivers have increased to the clear benefit of the oil industry. Over the last two years, more than 50 small refinery waivers have been issued, eliminating demand for more than 2.6 billion gallons of biofuels. There are 39 waiver applications currently awaiting action at EPA. If these are granted, it will only exacerbate this problem.

Every waiver granted negatively impacts the rural economy. At a time when farm family incomes are at their lowest levels since 2006, the improper issuance of small refinery waivers is hurting biofuel producers and farmers across the United States. In fact, Secretary of Agriculture Perdue described these waivers as “demand destruction.”

Finally, recent news reports indicate that the EPA’s proposal to make the names of refineries receiving the exemptions public may be in question due to White House interference in the regulatory process on behalf of refiners.

The small refiner waiver provision was not intended to undermine the RFS to the benefit of the most profitable oil companies in the world. We request that you cease issuing any further small refinery exemptions, immediately reallocate the remaining gallons, and make public the information regarding any recipients of these exemptions. Thank you for your attention to this critical issue.

Sincerely,

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