Farmers are used to dealing with unpredictability when it comes to the weather, commodity prices, even equipment and animal health. But one thing they shouldn’t have to plan for is unpredictability from their government.
Yet that’s exactly what ethanol producers in Minnesota and the Midwest are rightly expressing anger over, as the federal government issues an increasingly large number of small-refinery exemptions from requirements of the Renewable Fuel Standard (RFS), releasing those refineries from their obligations to blend biofuels.
The law sets forth annual amounts of renewable fuel of various types to be blended into the nation’s transportation fuel supply. Fuels such as corn starch ethanol, biodiesel and other advanced biofuels provide an important market for farmers in a rough agricultural economic cycle. They also help improve air quality and reduce greenhouse gas emissions.
The U.S. Environmental Protection Agency under the Donald Trump Administration has granted "hardship" exemptions to 85 oil refineries since 2016, including 31 granted in early August, reducing the volume of renewable fuels blended into the nation’s transportation supply by a whopping 4.04 billion gallons. This is a dramatic increase over the previous administration, which granted a total of 23 exemptions over three years, representing 690 million gallons.
The hardship created by these exemptions has been equally dramatic, depressing demand and prices for biofuels. The damage is adding up, and, as a result, 14 ethanol and eight biodiesel plants have shut down or been idled nationwide, including the announced closing of the Corn Plus ethanol plant in Winnebago, Minn.
The impact has not only forced ethanol plants offline, it has been a kick in the gut to corn and soybean farmers who provide the grain for ethanol and biodiesel production, especially when they had planned for growth in the use of renewable fuels. Each time one of these plants idles production, farmers for hundreds of miles in all directions are affected.
That is why South Dakota Gov. Kristi Noem and I sent a letter to President Trump (last) week expressing our deep concern. We told the president that these waivers undermine the integrity of the Renewable Fuel Standard and harm agricultural communities that are already spinning from the administration’s tariffs. We called on him to take immediate action to mitigate the effects of small refinery waivers and laid out concrete steps for how he could support farmers and renewable fuel producers.
As chair of the bipartisan Governors’ Biofuels Coalition, I urge the president to make good on his promise to "support our ethanol industry and to fight for the American farmer like no other president has ever fought before." It has been reported that the president has been considering revoking some of these recently granted exemptions. While this would be a positive step, farmers and the ethanol industry need certainty that the administration will apply the law fairly and consistently. This should be a promise that farmers can depend on.