EPA says it will not act on 2014 RFS until 2015, industry offers mixed reactions

WASHINGTON, Nov. 21, 2014 – The Environmental Protection Agency announced today that it wouldn’t finalize a 2014 rule for the Renewable Fuels Standard, saying a glut of comments will push action back into 2015.

In a notice posted in the Federal Register Friday morning, the agency said it is “not in a position to finalize 2014 RFS standards rule before the end of the year.”

“The proposal has generated significant comment and controversy, particularly about how volumes should be set,” the EPA said. “Accordingly, we intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule.”

In November of 2013, EPA issued a proposed rule that would have lowered the blending requirements of the 2014 RFS to 15.21 billion gallons, a cut of the congressional mandate by about three billion gallons.

Lawmakers and industry representatives offered mixed reactions to the delayed ruling, saying it could give EPA more time to come up with a firm ruling, but others expressed frustration with the continued delays.

“Today's announcement leaves the future of ethanol, biodiesel and other advanced biofuels up in the air,” noted Rep. Collin Peterson, D-Minn., who serves as the ranking member of the House Agriculture Committee, said in a statement. “The RFS has played a major role in keeping the rural economy strong and continued inaction could put that in jeopardy. Our farms, rural communities and the economy as a whole could all feel the impact.
“The proposed reductions to the RFS were unacceptable and, while the uncertainty created by today's announcement is not helpful, I hope that it will give the EPA the time needed to do the right thing,” Peterson added.

“Today’s announcement shows how deeply flawed the EPA’s original RFS rule was,” Senate Agriculture, Nutrition, and Forestry Committee Debbie Stabenow, D-Mich., said in a statement. “The EPA needs to work toward a new rule in 2015 that will provide long-term certainty needed for the advanced biofuels industry to give real competition to Big Oil at the gas pump.”

“The reprieve is mixed news for the farmers and biofuel producers who have responded to the call for more homegrown, renewable energy,” Chuck Grassley, R-Iowa, said in a statement. “Still, the Administration doesn’t deserve praise.  Creating uncertainty for everybody who works in this industry isn’t a good way to do business.”

Growth Energy CEO Tom Buis called the November 2013 proposal “unacceptable” and called the decision to withdraw a 2014 ruling “a win for the renewable fuels industry.”

“Today’s announcement is a clear acknowledgement that the EPA’s proposed rule was flawed from the beginning . . . The EPA wisely decided not to finalize the rule so they could fix the flawed methodology,” Buis said in a statement. “While a further delay is unwelcome news, at the end of the day, the most important aspect is that the EPA gets the final rule right.”

Renewable Fuels Association President and CEO Bob Dinneen said the RFS has been “enormously successful” and that additional time to make a decision more consistent with the congressionally-mandated standards would he helpful for the biofuels industry.

“Deciding not to decide is not a decision,” Dinneen said in a statement. “Unfortunately, the announcement today perpetuates the uncertainty that has plagued the continued evolution of biofuels production and marketing for a year. Nevertheless, the Administration has taken a major step by walking away from a proposed rule that was wrong on the law, wrong on the market impacts, wrong for innovation, and wrong for consumers.”

National Corn Growers Association President Chip Bowling said NCGA members have become frustrated with the delay in announcing the official ruling, but he is glad to see the agency is working toward a solution.

“Today’s announcement by EPA shows the Administration recognizes the proposed rule was inherently flawed and based on an unworkable methodology,” Bowling said. “We will continue to work with EPA to ensure that the 2014 and 2015 renewable fuel requirements are consistent with what Congress set forth in the Renewable Fuel Standard (RFS).”

However, the National Biodiesel Board’s Vice President of Federal Affairs Anne Steckel urged the Obama Administration to stop delaying the 2014 rule.

"This Administration says over and over that it supports biodiesel, yet its actions with these repeated delays are undermining the industry,” emphasized Steckel. “Biodiesel producers have laid off workers and idled production. Some have shut down altogether. We know that fuels policy is complex, but there is absolutely no reason that the biodiesel volume hasn't been announced. We are urging the Administration to finalize a 2014 rule as quickly as possible that puts this industry back on track for growth and puts our country back on track for ending our dangerous dependence on oil. We also urge them to move quickly on 2015 so that we don’t repeat this flawed process again next year."

American Farm Bureau Federation President Bob Stallman said renewable fuels are a “tremendous success story” in rural America, and EPA’s action is hindering that success.

“(AFBF) is disappointed in (EPA’s) notice of delay in issuing 2014 standards for the (RFS),” Stallman said in a release. “This significant delay and inability of the EPA to set standards for the Renewable Fuel Standard Program creates unneeded uncertainty in the marketplace.

Livestock groups have long been opposed to the RFS, saying it inflates corn demand and makes feeding their animals more expensive. Mike Brown, president of the National Chicken Council, said EPA should make a decision soon to provide certainty in the marketplace, adding that waiting to set 2014 standards “is irresponsible and discriminatory, but unfortunately, the standard practice."

"Instead of providing the market some clarity by adhering to the statutory deadlines, EPA waited to see if the consumption of gasoline would go up this year as a tactic to inflate ethanol production," said NCC President Mike Brown. “EPA Administrator Gina McCarthy said EPA would use the 'most up to date' numbers to set the 2014 standards – that was in April, nearly five months into the compliance year, and more than six months ago.”

EPA said it will allow for trading and retiring of 2012 vintage Renewable Identification Numbers (RINs) beyond the end of 2014.

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