3. How will new Renewable Fuels Standard look?

Iowa Gov. Kim Reynolds and Nebraska Gov. Pete Ricketts were among the speakers Tuesday applauding the federal government’s proposed renewable fuel volumes for 2018, but farm-state and renewable energy industry officials expressed concern that the U.S. Environmental Protection Agency was “backpedaling” on future advanced biofuel production.

The Renewable Fuel Standard, passed and signed into law in 2005, requires increasing volumes of renewable fuels to be blended into the U.S. fuel supply.

The new EPA targets call for the statutorily required 15 billion gallons of conventional biofuels, including corn-derived ethanol, but propose to cut volumes for “advanced biofuels,” such as cellulosic ethanol and biomass-based diesel.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the proposed 2019 biodiesel level was “flatlined” at 2.1 billion gallons compared with 2016 consumption of 2.9 billion gallons, while the proposal cuts cellulosic ethanol by 25 percent.

Reynolds and others testified at a hearing in Washington, D.C., that fuel production levels will drive demand and investment decisions critical to the industry and rural economies.

“As the current ag economy experiences a downturn,” Reynolds testified, “sustainable and predictable renewable fuels markets are incredibly impactful to the bottom line of farmers and rural Iowa.”

Reynolds noted that President Donald Trump has been “extremely supportive.” She praised EPA officials for their accessibility and willingness to make timely decisions, but she said she was disappointed to see biofuels cut overall and volumes in biodiesel’s main category stay flat under the latest proposal. She and other expressed hope the EPA would adjust the numbers before issuing a final rule in November.

More than 43,000 of the roughly 340,000 U.S. jobs supported by the renewable fuels industry are in Iowa, generating $2.3 billion of income for Iowans. Reynolds said the EPA decision carries considerable economic significance for her state — given that about $4.6 billion of Iowa’s gross domestic product was tied directly to the renewable fuels industry in 2015, and the price break Iowa motorists get at service stations offering ethanol-blended fuels saved them more than $315 million, according to the Iowa Department of Revenue.

U.S. Sen. Joni Ernst, R-Iowa, expressed concern that the reduced or flat production volumes for biodiesel and cellulosic biofuels would “create uncertainty and slow investment” at a critical time for the industry and rural America.

“When President Trump visited Iowa in June, he reiterated his commitment to supporting ethanol and biodiesel as part of his plan to rebuild rural America,” Ernst said. “I trust that the president’s commitment will be reflected in the final rule that the EPA puts forward.”

Others in the renewable energy industry testified that the RFS was designed to drive investment and innovation by providing stability and incentives for the development of clean alternative fuels. But the proposed advanced biofuel volumes fell short of the goal by perpetuating the status quo rather than spurring sustainable alternatives to petroleum.

“Cellulosic biofuels are poised to drive the next great wave of manufacturing investments across the heartland of the United States, but for the administration to succeed in rebuilding the rural economy, the EPA must set forward-looking targets for cellulosic production. Any retreat sends an unmistakable signal to investors that the U.S. is no longer fertile ground for innovation,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council.

Ricketts, who took part in an energy roundtable at the White House earlier this year, commended the EPA for timely action on the Renewable Fuel Standard, saying the certainty and stability within the proposal allows for the business sector to better react.

Ricketts called on the agency to review proposals for biodiesel and advanced cellulosic ethanol requirements considered setbacks in some circles.

"It's a mistake to go backward with regard to those advanced targets," Ricketts said.

In Nebraska alone, the ethanol industry provides over $5 billion of investment to the economy, and Ricketts said the state stands ready to increase its biofuel output.

“Biofuels are reducing greenhouse gas emissions, providing a cheaper, cleaner octane booster, and driving economic development in our states," he said.

The Lincoln (Neb.) Journal Star contributed to this story.

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