Ethanol industry anxious about possible RFS changes

Published online: Nov 05, 2013
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Sometime in the next couple of weeks, the EPA is expected to release its 2014 biofuels proposal under the Renewable Fuels Standard (RFS). 

Although targets have not yet been revealed, there have been strong indications that the agency plans to reduce the 2014 volume requirements for renewable fuels. The executive director the Iowa Renewable Fuels Association, Monte Shaw, says such a reduction would have very negative ramifications for renewable fuels and rural America. 

"I think that means you plateau the ethanol industry where it's at-13-13.5 billion gallons. You'd probably not see any growth there," Shaw says. "You'd probably see a pullback in biodiesel production-you'd actually see plants shut down for biodiesel. 

"And you would just kill the cellulosic industry. If you're just going to stick at E10 levels, I think that trying to find financing for cellulosic projects would just be extremely difficult." 

Pressure has been mounting for lawmakers to either repeal or reform the RFS. The oil industry has cited concerns about the so-called blend wall, the point at which adding the EPA-mandated volume of ethanol to gasoline supplies would result in ethanol blends that exceed ten percent. 

"They're saying, `look, we can't sell more than ten percent ethanol-you just can't do it-it's not possible to do it'. In fact they're quoted all the time saying retailers don't want to sell anything higher, and consumers don't want to buy it," Shaw says. "Yet the fact of the matter is we have retailers all across Iowa and the Midwest and the United States selling blends above E10.  And every single place it's tried, consumers embrace them." 

Shaw says the data shows that it is restricted access to higher blends by the oil industry-not the so-called blend wall-that is the true hurdle to increased usage of ethanol.