The Hagstrom Report

Agriculture News As It Happens


EPA denies renewable fuel standard waiver requests

The Environmental Protection Agency today denied requests for a waiver of the Renewable Fuel Standard that governs the use of biofuels, including corn-based ethanol, in the gasoline supply.

The announcement triggered the expected reactions from biofuels groups and from the meat industries that had urged governors to request the waiver.

“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact.”

McCarthy noted that the decision was based on economic analyses and modeling done in conjunction with the Agriculture Department and the Energy Department.

A study of impacts in the agricultural sector, conducted with USDA, showed that on average waiving the mandate would only reduce corn prices by approximately 1 percent, EPA said. A look at the impacts in the energy sector, conducted with DOE, showed that waiving the mandate would not impact household energy costs, the agency added.

Fuels America, a coalition of organizations representing a broad spectrum of renewable fuel stakeholders, said, “The multi-sector members of Fuels America are happy to see that the RFS, a policy that has driven job creation and investment in a time of economic distress, will remain intact. It has helped to attract billions in investment to an industry that supports over 400,000 jobs.

Growth Energy CEO Tom Buis said, “Today’s decision confirms what we knew all along — the petitioners were wrong in their belief that the RFS caused the economic harm. I commend the administration’s efforts to carefully review the facts and data in this matter. Their findings have echoed the comments of Growth Energy and we are pleased that the most successful energy policy enacted in the last 40 years will not be modified.”

A coalition of meat and dairy producing groups spoke out against the decision in a statement released by the National Chicken Council.

“We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate,” the coalition said.

The coalition claimed that “dozens of poultry, pork, beef and dairy operations have filed for bankruptcy, been sold or simply gone out of business over the past several months because of rising feed grain prices.”

Another coalition of environmental and anti-hunger organizations including the Environmental Working Group, Friends of the Earth and ActionAid USA called the decision a “a blow to livestock producers, dairy farmers and consumers alike.”

“This decision should serve as a wake-up call to Congress and the White House that the Renewable Fuel Standard does not protect producers and consumers in times of hardship and must be reformed,” the groups said.

“Its reliance on mandates for food-based fuel — namely corn ethanol — exposes us to spiking prices whenever yields drop because of drought or other severe weather,” the statement said. “The skyrocketing cost of animal feed will force 100 of California’s dairies out of business by year’s end. Overall food prices are expected to rise by as much as 4 percent in the coming months, with even greater increases for meat, poultry, milk and eggs. These mandates have also spurred the conversion of 23 million acres of environmentally sensitive wetlands and grasslands — an area the size of Indiana — to row crops, mostly corn.”

But the Biotechnology Industry Organization said the waiver would have hurt the development of advanced biofuels as well as corn-based ethanol.

“This decision allows BIO member companies to continue to deliver innovative technologies to the market to expand our domestic production of biofuels, including fuels from agricultural residues, municipal solid waste, algae and purpose grown energy crops,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section.

“The careful analyses performed by USEPA and USDA show that the drought, and not the Renewable Fuel Standard, is the cause of the temporary situation,” said Jan Koninckx, global business director for biofuels at DuPont.

“While we empathize with both livestock and ethanol producers that are struggling with higher corn prices, we are also confident that farmers will continue to expand corn production, and DuPont and others will continue to commercialize advanced biofuels — to serve both our feed and renewable fuels needs,” Koninckx said

“With so much at stake for the economy, we need the Renewable Fuel Standard,” said Adam Monroe, president of Novozymes North America.

“Its stability has generated 400,000 careers, billions in private investment — and domestic, renewable fuel for America. Novozymes and other industry leaders have invested more than a billion dollars to commercialize advanced biofuels from agricultural waste, household trash and more, in large part because of the RFS,” Monroe said.

EPA Decision on Requests for a Waiver of the Renewable Fuel Standard
Notice of Decision Regarding Requests for a Waiver of the Renewable Fuel Standard