Nat’l Biodiesel Board asks EPA to reform SREs at public hearing

Representatives from the National Biodiesel Board and its member companies testified at U.S. EPA’s public hearing March 29 on the proposed modifications to fuel regulations to provide flexibility for E15, and to elements of the renewable identification number (RIN) compliance system. NBB asked the agency not to adopt the proposed changes to the RIN system as it finalizes the E15 rule.

“EPA must change its practice of encouraging retroactive small refinery exemption petitions,” Kurt Kovarik, NBB’s vice president of federal affairs, testified. “We ask that the agency use this opportunity to instead address the timing of small refinery exemption petitions. If EPA finds that it can easily propose a quarterly compliance deadline in the RIN reform proposed rule, the agency should feel just as comfortable applying a similar reasonable administrative requirement that small refineries submit petitions before the end of the compliance year.”

NBB Chairman Kent Engelbrecht also testified, stating, “We appreciate EPA taking claims of RIN market manipulation seriously. But because the agency has yet to see data-based evidence of such behavior, we recommend that EPA not finalize the RIN reform portion of the proposed rule.”

At the hearing, Roy Strom, president and CEO of W2Fuel LLC, an NBB member, said, “To succeed, the biodiesel industry needs signals that allow us to forecast market demand. While the RVO should be the forecast, the current practice of granting retroactive small refinery exemptions undermines that signal.”

The president of Hero BX, Chris Peterson, who testified on behalf of NBB, said, “Unfortunately, EPA has not provided any evidence of RIN market manipulation to warrant any of its proposed reforms. The reforms themselves could further lead to market uncertainty and financial losses.”

David Cobb, NBB director of federal affairs, added, “EPA acknowledges within its proposal that there is no evidence of RIN market manipulation to date. Rather than solve a problem, the proposed RIN system changes could potentially disrupt the RIN market and even undermine the RFS.”

On March 28, EPA granted a 35th small refinery exemption for 2017, upping the total volume of exempted gasoline and diesel for that year to 17.05 billion gallons. The exemptions have destroyed demand for more than 360 million gallons of biomass-based diesel over the past 12 months.