The pitched battle over the future of the Renewable Fuel Standard (RFS) picked up more steam last week, as biofuel advocates and farm state lawmakers continued to fight against policy changes that, they say, could sharply diminish renewable fuel demand and hurt farmers.
Environmental Protection Agency (EPA) Chief Scott Pruitt reiterated to Farm Bureau members from Iowa and other states that the Trump administration still supports the RFS. But, he said, changes may be needed to address refiners’ concerns about the cost of Renewable Identification Numbers (RINs), the tradeable credits used to show compliance with annual biofuel quotas.
Oil state interests, led by Texas Sen. Ted Cruz, have been pushing for a cap on the price of RINs. They say the cost of the credits has squeezed refineries and forced one in Philadelphia to declare bankruptcy.
“RIN reform is something that has to happen in some way. There needs to be more transparency,” said Pruitt.
Craig Hill, Iowa Farm Bureau Federation president, emphasized to Pruitt that a cap on RIN prices, as called for by Cruz, would severely undermine the RFS and be devastating to farmers who supply grain to biofuel plants.
Market forces needed
“We would hope that the administration does not consider a cap on the price of RINs,” Hill told Pruitt during a question and answer period. “That would eliminate a market mechanism that forces the use of renewable fuels.”
The RFS, Hill said, is working the way that Congress intended when it passed the legislation in 2005 and amended it in 2007.
Iowa lawmakers, meanwhile, pledged last week to maintain the RFS. Iowa Gov. Kim Reynolds, along with other Midwestern governors, sent a letter to Trump urging him to reject proposals designed to weaken or waive “this key pillar” of the farm economy.
“The purpose of the RFS is to grow the demand for biofuels while driving the industry to innovate,” Reynolds said. “Any effort to undermine the RFS, including putting a cap on RINs, would be devastating for Iowa farmers and Iowa’s economy.”
Keeping up the fight
Members of Iowa’s congressional delegation, in Washington meetings with Farm Bureau members, also vowed to fight attempts to weaken the RFS.
“There is a lot of pressure out there now, especially when it comes to the RFS,” Iowa Sen. Joni Ernst acknowledged. “But we have communicated to the administration that any cap of RINs would be very detrimental, and we are going to keep at it.”
Iowa Sen. Charles Grassley told the Iowa Farm Bureau members that increased pressure from oil interests has some in the ethanol industry looking for a compromise on the RIN issue. But he said he will continue to oppose any cap or waiver on RINs.
“My feeling on the RFS is that if it ain’t broke, there is no need to fix it,” Grassley said.