Ethanol supporters were pleased with the long-awaited progress made on a couple of significant obstacles in a White House meeting last month focused on the Renewable Fuel Standard (RFS) and the system of Renewable Identification Numbers (RINs).
“President Trump…reaffirmed his commitment to our nation’s farmers by approving year-round sales of E15 without a RIN cap. This is a positive step because we know a RIN price cap would have been damaging to farmers,” said Kevin Skunes, president of the National Corn Growers Association (NCGA). “We appreciate the agreement on eliminating the outdated regulation on higher blends such as E15, a barrier that has long needed removal, and thank Senators Joni Ernst and Chuck Grassley for their tireless efforts on behalf of agriculture.”
But as a possible concession for fuel refiners who continue to oppose the system of RINs that are part of the RFS, small refiners could gain biofuel credits through ethanol exports.
“We have numerous questions, however, about a potential plan now being developed by USDA Secretary Perdue and EPA Administrator Pruitt to address small refiner waivers by potentially offering biofuels credits on ethanol exports, an idea that would harm our ethanol export success,” Skunes said. “NCGA has opposed RIN credits on exports, an idea that EPA stated last fall that it would not pursue. Offering RIN credits, which are supposed to be derived from a domestic renewable fuel use, for ethanol exports would threaten trade markets and impact corn farmers’ economic livelihoods. Pursuing a path that includes RIN credits on export gallons would violate the letter and spirit of the RFS, serving the interests of oil refiners who have already benefitted from Administrator Pruitt’s unprecedented RFS volume waivers at the further expense of America’s farmers.”
The idea of attaching RINS to exports was proposed by the oil industry in 2017 but ethanol supporters have opposed it. U.S. ethanol is already some of the lowest cost in the world and attaching RINs to exports could distort trade in the eyes of importers and the World Trade Organizations.
“Attaching a RIN to ethanol exports would have a crippling impact on American agriculture, significantly reducing demand for ethanol and corn,” said Emily Skor, Growth Energy CEO in a statement. “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.”