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Biofuels Agreement Announcement Welcomed, but Details Lacking

October 7, 2019

Wall Street Journal writers Kirk Maltais and Jacob Bunge reported on Friday that, “The Trump administration outlined a plan to boost biofuel demand, aiming to ease Farm Belt frustrations over recent changes to federal policies affecting the production of ethanol.

proposal released on Friday by the Environmental Protection Agency and the U.S. Department of Agriculture aims to satisfy both farmers and energy companies by increasing use of ethanol, a fuel additive made from corn. Ethanol-blending exemptions granted to individual refiners will be offset by higher overall requirements to incorporate the fuel into gasoline, officials said.

Corn futures on the Chicago Board of Trade dropped following the plan’s release, with the December corn contract slipping 1%. Traders said they were dissatisfied with the scant details in the EPA’s press release. Ethanol futures also declined, with the November contract down 2.2% at $1.39 a gallon.”

The Journal article explained that, “Ethanol production has been declining since August, after the EPA granted 31 waivers to small gasoline refineries allowing them to forgo mixing ethanol into their fuel as required. From the beginning of August into mid-September, U.S. daily ethanol production fell by roughly 100,000 barrels to 943,000 barrels, the lowest rate of production since April 2016. It has since rebounded to 958,000 barrels a day this week.”

“After Farm Belt Outcry, Trump Administration Revamps Ethanol Rules,” by Kirk Maltais and Jacob Bunge. The Wall Street Journal (October 4, 2019).

Reuters writers Humeyra Pamuk and Stephanie Kelly reported on Friday that, “While the move was largely welcome by biofuel groups, some industry players said they were concerned that the EPA declined to provide an exact figure for the 2020 blending quotas. A brief EPA call with reporters offered little insight, with an agency official saying only that the mandates will be based on a calculation of waived volumes over the previous three years.”

And, Bloomberg writers Jennifer A Dlouhy and Mario Parker reported on Friday that,

The EPA is set to formally propose changes next week. The agency said it would seek public comment on ensuring more than 15 billion gallons of conventional ethanol are blended into the nation’s fuel supply beginning in 2020 and that statutory obligations for biodiesel also are satisfied.

“The agency is set to effectively offset future exemptions by factoring a three-year rolling average of waived gallons into those annual quotas. In a forthcoming proposal, the EPA will propose a range of additional volumes informed by the last three compliance years and the underlying law, an EPA official said Friday.”

Gregory Meyer reported on Friday at The Financial Times Online that, “The Trump administration has changed course on US biofuels policy to placate angry farmers ahead of the 2020 election.”

Mr. Meyer pointed out that, “On Friday, Mr Trump’s Environmental Protection Agency announced a new plan to allow exemptions without reducing the total size of the corn ethanol mandate, starting in 2020. The proposal would ‘result in sustained biofuel production to help American farmers,’ said Andrew Wheeler, EPA administrator.

“The exemptions for oil refiners had begun to damage the goodwill Mr Trump established in the Corn Belt last spring when he allowed unfettered sales of petrol containing 15 per cent ethanol, an increase from the customary limit of 10 per cent. Since he took office, the average number of exemptions has trebled.”

“Trump moves to placate swing state farmers over biofuels,” by Gregory Meyer. The Financial Times (October 4, 2019).

The FT article stated that, “Eighteen of the nation’s more than 200 ethanol plants have closed in the past year, according to the Renewable Fuels Association. US ethanol plant output has slumped to levels last reported in 2016…The slowdown has affected grain markets, with the US Department of Agriculture recently paring its estimate of ethanol sector corn use to 5.45bn bushels, which still amounts to 39 per cent of the projected 2019 harvest.”

“Trump moves to placate swing state farmers over biofuels,” by Gregory Meyer. The Financial Times (October 4, 2019).

Donelle Eller reported on the front page of Friday’s Des Moines Register that, “The waivers have been a major blow to farmers at a time when they are already experiencing reduced demand for agricultural products because of trade wars with China, Mexico, Canada and other countries.”

“Trump promises new ethanol fix,” by Donelle Eller. The Des Moines Register (Front Page, October 4, 2019).

“On Thursday, [Rep. Cindy Axne (D., Iowa)] and U.S. Sen. Amy Klobuchar, a Democratic presidential candidate from Minnesota, sent a letter to U.S. Agriculture Secretary Sonny Perdue requesting that his agency assess the economic damage from waivers,” the Register article said.

Ms. Eller added that, “The plan unveiled Friday also calls for removing potential barriers for gasoline with 15% ethanol, called E15, and expanding infrastructure such as retail pumps that provides greater access to higher biofuel blends.

“It also calls for greater transparency in the market for credits used by refiners to show compliance with the federal mandate.

“The action outlined in the plan will become a supplemental document to the 2020 biofuels requirement. It’s required to be filed by Nov. 30.”



The administration’s decision to increase the biofuel mandate is a body blow to the millions of refinery industry workers across the U.S. who were counting on the President to fulfill his promise to protect manufacturing jobs. #RFS #ethanol …

View image on Twitter

10:01 AM – Oct 4, 2019 

On Saturday, Joseph Morton reported on the front page of the Omaha World-Herald that, “Renewable-fuel groups, farm organizations and Midwestern politicians have embraced the Trump administration’s new ethanol proposal as a desperately needed production boost.”

“Midlands lawmakers praise Trump plan to boost ethanol,” by Joseph Morton. Omaha World-Herald (Front Page, October 5, 2019).

Still, many details remain to be fleshed out, and the country’s oil and gas interests pledged to fight it every step of the way,” the World-Herald article said.

Scott Irwin@ScottIrwinUI 

1. Yes, this move by President Trump is a step forward in the #RFSwars from the perspective of ag and biofuels. But I think it can only be characterized as a partial victory at best. …

Jennifer A. Dlouhy


It’s official: The Trump administration is taking action to boost U.S. demand for corn-based ethanol and soybean-based biodiesel, as the president seeks to temper criticism from farmers and Midwest politicians before next year’s election.  w @MarioDParker

9:39 AM – Oct 4, 2019 

Meanwhile, Donnelle Eller reported on the front page of Sunday’s Des Moines Register that, “On Friday, Siouxland’s board and 42 employees got some good news: The administration said it would take steps to begin restoring the market for billions of gallons of renewable fuel waived through small refinery exemptions.

While the announcement was widely welcomed, it lacked details, and it was unclear whether the president’s plan would be enough to immediately boost the market and help the nation’s ailing renewable fuel plants.

The Register article stated that, “Iowa’s Republican political leaders and farm groups lauded Friday’s announcement, which came from the U.S. Environmental Protection Agency, saying President Donald Trump had heard the concerns of farmers, rural America and renewable fuels producers.

“Will Trump’s fix help ailing ethanol plants?” by Donnelle Eller. The Des Moines Register (Front Page- October 6, 2019).

But tucked into many of their responses was an acknowledgment that more work is needed to ensure the proposal becomes the final rule,” the Register article said.



gr8 news! W 2day’s announcement @realdonaldtrump delivers on his continued promise to support ethanol+ biodiesel + farmers THANK YOU Pres Trump for your support of rural America & following the renewable fuel standard as Congress intended Promises made& promises kept

9:39 AM – Oct 4, 2019

Joni Ernst


This is great news for #Iowa and rural America. President @realDonaldTrump is following through on his commitment to our nation’s hardworking farmers and biofuels producers.

9:25 AM – Oct 4, 2019

Darin LaHood


Great news for Illinois biofuel & ag producers! The announced plan to uphold the intent of the RFS & ensure lost gallons from SREs are accounted for will bolster the ag economy. I applaud @POTUS & his team for delivering on a promise to Midwest producers. …

Rep. LaHood Applauds President Trump’s Plan to Boost Midwest Ethanol and Biodiesel

PEORIA, IL – Congressman Darin LaHood (IL-18) released the following statement after the White House announced President Trump’s plan to uphold the Renewable Fuel Standard (RFS) and bolster Midwest…

11:30 AM – Oct 4, 2019

Rep. Mike Bost


Good news for Southern IL farmers – Excited to share @POTUS‘s announcement on the Renewable Fuel Standard. It includes relief for Small Refinery Exemption waivers & ensures 15 billion gallons of conventional ethanol will be blended into our fuel supply. 


WASHINGTON, D.C. – U.S. Representative Mike Bost (IL-12) today announced that the U.S. Environmental Protection Agency (EPA) and U.S. Department of Agriculture (USDA) reached an agreement on the…

12:37 PM – Oct 4, 2019

Rep. Adrian Smith


The #RFS has been widely successful, bipartisan, and benefits producers and consumers alike. The President’s RFS plan announced today restores credibility to the RFS and compliments his action to expand E-15. My statement here: 

Smith Welcomes President Trump’s RFS Action

Washington, D.C. – Congressman Adrian Smith (R-NE) released the following statement today after the Trump administration released the details of his plan to uphold the RFS.

11:07 AM – Oct 4, 2019

Dr. Roger Marshall


.@realDonaldTrump & @SecretarySonny have delivered on their promise! Great news for our Kansas producers, and good for our environment, too. #ksleg #kssen …



The Trump administration pledges to boost demand for corn-based ethanol and soybean-based biodiesel to temper criticism from farmers and Midwest politicians 

10:05 AM – Oct 4, 2019

Senator John Thune


Today’s announcement from the administration to restore integrity to the Renewable Fuel Standard is good news for farm country and builds off our E15 win. Read my full statement here: …

Thune Praises Administration’s Commitment to Agriculture

U.S. Sen. John Thune (R-S.D.) today issued the following statement after the administration announced that it has reached a deal to restore integrity to the Renewable Fuel Standard (RFS) by account…

10:11 AM – Oct 4, 2019

Source: Keith Good, Farm Policy News