What you need to know about waivers and the ethanol industry

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Ethanol has made a lot of headlines over the last month, but unfortunately it has not been good news for rural Minnesota. Actions by the Environmental Protection Agency have undermined the Renewable Fuel Standard (RFS) by removing ethanol from the nation’s fuel supply, hurting a major market for corn farmers.

Here is a quick rundown to catch you up on an issue that will continue to be a major topic over the coming days:

The Law: Under the RFS, the nation’s oil refineries are obligated to blend a certain amount of biofuels, like ethanol, into their gasoline. If they choose not to blend, the refinery can instead purchase credits from an operation that does blend biofuels.

This process ensures the correct amount of biofuel gallons are blended into the nation’s fuel. That amount is determined each year as part of the RFS.

The Issue: Refineries that can prove they are under financial strife are sometimes able to receive a “Small Refinery Exemption,” which is a waiver that frees them from both blending ethanol and purchasing credits. Previously only granted in very rare occasions, the number of waivers issued since President Trump took office have more than quadrupled. These waivers have been granted to refineries owned by Big Oil giants like Exxon Mobile.

The Result: 85 small refinery waivers granted since 2017 have removed more than four billions gallons of biofuels, mostly ethanol, from the nation’s fuel supply.

The latest blow to the ethanol industry came last month, when the EPA granted 31 waivers. Since the announcement, corn prices declined as much as 21 percent in an already depressed farm economy.

Minnesota’s ethanol industry has also been greatly impacted, with one ethanol plant shutting down and others temporarily stopping ethanol production.

The Response: The Minnesota Corn Growers Association has worked with its national partners, including the National Corn Growers Association, to emphasize the impact the waivers have had on farmers while only benefitting Big Oil.

MCGA farmer leaders have made numerous trips to Washington to speak with members of Minnesota’s congressional delegation and agency officials to stress the need to stop the waivers and reallocate the gallons already removed from the nation’s fuel supply. A recent call-to-action by MCGA also generated more than 700 letters to President Trump and the EPA demanding waivers are stopped and actions are taken to protect the RFS.

Most recently, elected officials have also spoken out against the waivers, emphasizing their impact on rural communities.

The Latest: Media have reported the White House will be announcing a package in response to the demands from the nation’s farmers and ethanol industry. MCGA and its national partners will be ready to respond once the details are revealed.

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