More Questions than Answers in Coming RFS Package Announcement

Posted on 10/04/2019 5:20 AM

Call for public comment on changes means no certainty until RFS deadline of Nov. 30

A mandated volume requirement of more than 15 billion gallons of conventional ethanol beginning in 2020 is one of the few certainties likely to be announced when the Trump administration unveils more information about Renewable Fuel Standard (RFS) reform this morning, based on industry and commodity group contacts briefed on the matter Thursday evening. Sources say the plan will be announced at 9 a.m. CT.

This dispatch will be updated as additional information becomes available.

 

The White House has opted for another public comment period to avoid being charged under the Administrative Procedure Act which governs the process by which federal agencies develop and issue regulations. It includes requirements for publishing notices of proposed and final rulemaking in the Federal Register, and provides opportunities for the public to comment on notices of proposed rulemaking. That apparently will be the case following this morning's announcement.

Sources say comments will be requested on expanding biofuel requirements beginning in 2020, including more than 15 billion gallons of conventional ethanol and that the volume obligation for biomass-based biodiesel is met.

Today's announcement will not likely provide details on how waived biofuel gallonage will be reallocated, despite reports over a month ago that the amount of waived gallons over the past few years would be reallocated based on a three-year rolling average of the number of gallons exempted.

The proposal will account for relief expected to be provided for small refineries, but details on this are murky, sources advise.

Regarding year-round sales of E15, rulemaking to streamline labeling and remove other barriers will be announced, industry contacts noted.

It appears EPA and USDA punted for now on any changes regarding RIN market transparency and reform, and instead will take additional public comments on the topic.

Regarding infrastructure projects to boost higher biofuel blends, USDA will request assistance via the budget process ahead.

PERSPECTIVE: It appears pushback by both biofuel proponents and the oil industry in recent weeks led to a rather information-lacking expected release on the matter coming this morning, based on talks with sources briefed on the package. While the Trump administration will present today's package as a win for biofuels and President Trump following through on his pledge to ethanol producers, that assessment will likely have to wait until the public comment period ends and the official RFS for 2020 conventional biofuels is announced no later than Nov. 30, 2019, and for 2021 biomass-based biodiesel. The coming Federal Register notice within a week or so, or additional information from EPA and/or USDA such as a “fact sheet” or more details for the proposals, should hopefully provide more information on how EPA and USDA plan to accomplish the vague plan sources say will be announced this morning at 9 CT. The coming release, sources say, implies there will be some makeup for SREs, but no details will be provided at this time. As one source put it, “They waited this long to tell us nothing? The public is supposed to comment on a vague plan?"


 

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