The U.S. Environmental Protection Agency (EPA) recently announced that it will not repeal the mandatory addition of ethanol in the U.S. Renewable Energy (RFS) standard. The EPA said the decision, which was made after receiving comments from more than 2,400 various stakeholders, suggested that repealing the mandatory ethanol provision in the standard could reduce corn prices by only about 1 percent. Although the provision has been controversial in the United States, the EPA’s decision means that the status of mandatory addition of ethanol to gasoline has been confirmed.
Earlier this year, nine governors, 26 senators, 150 members of the U.S. House of Representatives, and many livestock and poultry producers, as well as corn-feed farmers, called on the EPA to drop the mandatory addition of ethanol specified in the RFS standard. terms. This involves the addition of 13.2 billion gallons of corn ethanol.
They blamed the rise in corn prices on the fact that 45 percent of the U.S. corn is used to produce fuel ethanol, and because of this summer’s severe U.S. drought, corn production is expected to fall 13 percent from last year to a 17-year low. Over the past three years, corn prices have nearly doubled, putting these people under cost pressures. So they point to the RFS standard, arguing that ethanol production consumes too much corn, exacerbating the threat of drought.
RFS standards are an important part of the U.S. national strategy to promote biofuel development. According to RFS standards, by 2022, US cellulosic ethanol fuel production will reach 16 billion gallons, corn ethanol production will reach 15 billion gallons, biodiesel production will reach 1 billion gallons, and advanced biofuel production will reach 4 billion gallons.
The standard has been criticized, from traditional oil and gas companies, about the competition for corn resources, about the data targets involved in the standard, and so on.
This is the second time EPA has been asked to repeal RFS-related provisions. As early as 2008, Texas proposed to the EPA to abolish RFS-related standards, but the EPA did not adopt it. In exactly the same way, the EPA announced on November 16 this year that it would not reject the requirement to add 13.2 billion gallons of corn as feedstock ethanol.
The EPA said that under the law, there must be evidence of “serious economic harm” if the relevant provisions are to be repealed, but in the current situation, the fact does not reach this level. “We recognize that this year’s drought has caused difficulties for some industries, especially livestock production, but our extensive analysis shows that Congressional requirements for repeal have not been met,” said EPA Office Assistant Administrator Gina McCarthy. The requirements of the relevant provisions, even if the relevant provisions of the RFS are repealed, will have minimal impact.”
Once the EPA’s decision was announced, it was immediately strongly supported by relevant parties in the industry. Brooke Coleman, executive director of the Advanced Ethanol Council (AEC), said: “The ethanol industry appreciates the EPA’s approach, because repealing RFS will do little to reduce food prices, but it will affect investment in advanced fuels. RFS is well-designed and The main reason for the development of advanced biofuels in the United States is the global leader. American ethanol producers will go all out to give consumers greener and cheaper options.”
For the average American, the EPA’s latest decision could save them money as adding ethanol helps lower gasoline prices. According to a May study by economists at Wisconsin and Iowa State Universities, ethanol additions lowered wholesale gasoline prices by $1.09 per gallon in 2011, thus reducing the average American household’s spending on gasoline by $1,200. (Source: China Chemical Industry News)
Post time: Apr-14-2022