On May 8, President Donald Trump hosted a meeting on the Renewable Fuel Standard at the White House. During the meeting, attendees agreed to allow year-round sales of E15, to abandon plans to pursue a price cap on renewable identification numbers (RINs), and to allow RINs to be assigned to exported biofuels.

The meeting was attended by Trump, Sens. Chuck Grassley, R-Iowa; Joni Ernst, R-Iowa; Ted Cruz, R-Texas; and Pat Toomey, R-Pa., along with U.S. EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

“President Trump agreed to allow for the sale E15 year-round,” Grassley said. “That’s good news for farmers and consumer choice at the pump. Allowing higher blends of ethanol to be sold in the summer months fits in well with EPA’s deregulatory agenda. There was also an agreement to not pursue an artificial cap on RIN prices, which would have destroyed demand for biofuels and hurt biofuels workers.

“I told the President and Administrator Pruitt that EPA’s ‘hardship’ waivers for billionaires are hurting biofuels and undermining the RFS,” Grassley continued. “They also undercut the President’s commitment to meet the annual 15 billion gallon volume obligation set by Congress under the RFS. There was discussion about how to reallocate the waived obligations so that demand for biofuels wouldn’t be hurt. While details weren’t decided, I look forward to reviewing a plan being developed by Secretary Perdue and Administrator Pruitt. Any fix can’t hurt domestic biofuels production.”

Following the meeting, Grassley also tweeted that the devil is in the details, noting that Perdue and Pruitt need to come up with a plan to implement the decisions that were made.

Cruz also tweeted following the meeting, calling it a “terrific final decision” and a “win-win for everyone.” He said more corn will be sold, which is good for farmers; RIN prices will be lowered, which will save blue-collar refinery jobs; and more ethanol will be exported, which is good for America.

The American Coalition for Ethanol stressed that rural American deserves immediate action to allow year-round E15 sales. “The president has promised on more than one occasion to allow E15 use year-round but EPA has so far refused to make good on that promise,” said Brian Jennings, CEO of ACE. “We are pleased this meeting resulted in yet another promise about E15, but rural America is hurting and deserves immediate action.

“If initial reports of today’s meeting are true, we are also concerned EPA appears free to continue rubber-stamping secret RFS waivers for people like Carl Icahn who own refineries while the June 1 RVP limit date is fast-approaching,” Jennings continued. “We call on EPA to issue an RVP relief rule immediately and allow retailers to sell E15 this summer while the rulemaking process runs its course. It should be noted EPA’s secret hardship waivers have effectively reduced ethanol demand by more than 1.5 billion gallons and RIN prices have fallen more than 50 percent since the White House has convened this series of RFS meetings.”

While Jennings said ACE is pleased to see the RIN cap idea being abandoned, he stressed that “assigning RINs to exported renewable fuel is an equally horrible idea,” noting that it would be an extraordinary departure from how EPA has implemented the RFS program and would break Pruitt’s written promise in an Oct. 19 letter to support the spirit and text of the RFS.

“In addition, instituting RIN credits for exported renewable fuel now would be labeled as protectionist export subsidies by our trading partners and could set off a trade war,” Jennings said. “If EPA actions violate WTO obligations and precipitate another backlash by trading partners, it could put U.S. ethanol exports and our rural economy in even greater jeopardy.”

The Renewable Fuels Association called plans to allow exported ethanol to count toward an oil company’s RFS obligation “extremely problematic.” “We are very grateful the President has affirmed his commitment to remove the regulatory barriers to the year-round use of E15, and we look forward to working with EPA to get this done as quickly as possible,” said Bob Dinneen, president and CEO of the RFS. “We are also pleased that the President appears to recognize the harm that has been done to the RFS, ethanol producers, and rural America from the unprecedented number and scope of hardship waivers. However, the notion of allowing exported ethanol to count toward an oil company’s RFS obligation is extremely problematic. Depending on potential implementation, allowing exports to qualify for RFS compliance could dramatically reduce domestic ethanol demand, while most certainly resulting in retaliatory trade barriers from the countries importing U.S. ethanol. Our trade partners in the international market certainly would not understand why the lowest-priced ethanol in the world requires an export subsidy. The real disgrace with a proposal of this nature, however, is that ethanol producers and farmers would bear the brunt of any retaliatory tariffs; they would be subsidizing highly profitable oil companies, who would benefit from the reduced RINs costs. In no way will that ever be acceptable or considered a win for our industry.”

Growth Energy indicated it is grateful that the administration is delivering on its promise for year-round E15s ales, but said attaching RINs to exported volumes of ethanol would harm U.S. agriculture. “Attaching a RIN to ethanol exports would have a crippling impact on American agriculture—significantly reducing demand for ethanol and corn,” said Emily Skor, CEO of Growth Energy. “It would also have major trade implications, as export RINs would be considered a subsidy by our global trading partners, who will likely challenge this as unnecessary advantage to U.S. ethanol. Further, export RINs would be a clear violation of the RFS, which is intended to increase the domestic use of biofuels. We continue to thank our Congressional champions for standing firm against efforts to destroy ethanol demand.”

Last fall, Growth Energy commissioned research that showed the damaging impacts of an export subsidy for biofuels. The analysis shows immense impact on jobs, rural economies, and corn prices, including corn losses of $27.9 billion over the next four marketing years, an immediate drop in corn prices by 56 cents per bushels, and a reduction of 25,000 jobs supported by U.S. ethanol exports.

The Advanced Biofuels Business Council also questioned how plans to allow RINs for exported volumes would impact rural America. “President Trump scored a big win by putting a final nail in the coffin of the refinery-backed RIN cap scheme,” said Brooke Coleman, executive director of the ABBC. “We’re also encouraged that the White House has told EPA Administrator Pruitt to get to work immediately on a long-overdue fix to summer regulations that limit sales of E15. 

“But, as Senator Grassley said, the devil is in the details,” Coleman said. “Cruz now wants to reintroduce an old gimmick proposed by Valero. The plan would likely involve assigning RINs to some unknown volume of biofuel exports. Our champions made it clear to the White House that any plan that cannibalizes domestic growth would be a non-starter, which means that export RINs should quickly end up on the cutting room floor. Pruitt vowed to reject the same scheme in 2017. It doesn’t just threaten biofuels, it could spark retaliatory tariffs on any number of U.S. industries.

“President Trump also tasked the USDA and EPA with reexamining the destructive waivers granted to major refiners under the RFS,” Colman continued. “Cruz seems to think export RINs could fill the void left by EPA actions, but it won’t take long for stakeholders to realize that his solution would only dig the hole deeper and likely drag down the entire rural economy.”

The Biotechnology Innovation Organization applauded the E15 announcement but said it opposes unnecessary changes to the RFS. “Ensuring that E15 can be sold year round in states and regions where it is already approved will give advanced and cellulosic ethanol more opportunity to compete in the market in coming years,” said Brent Erickson, executive vice president of the Industrial & Environmental Section at BIO. “E15 reduces the price of gasoline by 5 to 15 cents per gallon, and it lowers tailpipe and greenhouse gas emissions all year round. A recent BIO analysis indicates that permitting current E15 sales to continue throughout the full year can reduce GHGs equivalent to taking 2.1 million vehicles off the road. Additionally, the Energy and Environmental Studies Institute finds that E15 can lower the public health impacts from transportation emissions, including reducing risks associated with cancer and asthma.

“BIO and its members continue to oppose unnecessary changes to the Renewable Fuel Standard. EPA has already provided unwarranted waivers to oil refiners that are destroying demand for all biofuels and undercutting industry investments,” Erickson continued. “We thank Senators Grassley and Ernst for standing with us in opposition to the damaging proposal for a cap on RIN prices. We remain concerned about the impact counting RINs from exported renewable fuels would have on the development of advanced biofuels and we look forward to working with the Senators to ensure the RFS continues to promote production and use of homegrown biofuels.”