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EPA rejects production quotas in victory for corn farmers, ethanol producers

By Jim Spencer, Star Tribune (Minneapolis) on

Published in Business News

In a major political and regulatory win for corn farmers and ethanol producers, the U.S. Environmental Protection Agency has refused to grant retroactive reductions in corn ethanol production quotas sought by many oil refiners.

Waivers from government-mandated requirements to make certain amounts of ethanol have been at the center of a pitched, expensive battle between the corn and oil lobbies during much of the Trump administration.

Monday's action by the EPA denied 54 waiver requests for years 2011-2018 that refiners sought. Earlier EPA approvals had increased waivers by multiples of what they were before President Donald Trump took office. Those waivers effectively reduced the number of gallons of ethanol the country produced.

The waiver program is designed for small refineries that can demonstrate that fulfilling their ethanol production quotas will seriously injure their businesses

Previous EPA attempts to expand the number of waivers issued brought a swift and angry response from the corn lobby.

The corn industry has long supported increases in the Renewable Fuel Standard (RFS), which sets production quotas for individual refineries to reach a statutory minimum gallons of ethanol produced each year.

The RFS has been as high as 15 billion gallons per year.

In combination with shrinking commodity prices, tariffs in a trade war started by the administration and a 50% slowdown in vehicle use caused by coronavirus shutdowns, the waivers added to problems in ethanol production.

 

Waivers that halted the production of billions of gallons of ethanol built up, said Minnesota corn farmer Brian Thalmann. None of them was reallocated to other oil refiners so that ethanol production remained at the legally required level, Thalmann added.

So Big Corn squared off against Big Oil and won a legal judgment that denied hardship waivers to companies that had not received them the year before. The petroleum industry responded with requests for "gap-year" waivers dating from 2011-2018.

The Renewable Fuels Association, a trade group advocating for the ethanol industry, celebrated the new EPA move and called the gap-year waiver requests "an absurd and bizarre attempt by the refineries to circumvent" the court decision.

Thalmann said the new EPA decision "is one small step of many needed to get" the ethanol industry running like it should.

The new decision, he explained, "is finally getting us back to having the law followed."

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