Concerns over RFS Changes Highlight Need for Program Reforms

An Edgetorial by Kyle Abbott

Since President Trump took office, he has focused on cutting regulations that are impeding our economy from improving and reaching its greatest potential. The Trump administration has begun to examine the Renewable Fuel Standard (RFS), which was first introduced in 2005 to boost renewable fuel production at home and decrease our nation’s dependence on foreign energy by requiring domestically produced corn ethanol and other biofuels be blended into gasoline.
President Trump recognizes that 15 years later, the RFS is no longer a viable program. He has retroactively granted 48 small refinery exemptions (SREs) to small oil refiners (those about half the size of an average refinery), whereas the Obama administration rarely offered any SREs. These exemptions allow small refiners to bypass RFS blending obligations, which carry a heavy financial and compliance burden and leave small refiners struggling to stay afloat.
While biofuel stakeholders see this as a step in the wrong direction, a September 2018 study examined the economic impact of SREs and concluded that they have “provided relief to small refineries while not impacting ethanol volumes blended into motor gasoline.” The study also highlights that the amount of ethanol blended in the U.S. fuel supply has risen every year since 2012 – proof that the ethanol industry is mature and no longer needs a helping hand from the government. The RFS has met its intended objective to create a mature ethanol market. It is now time for the market to move beyond the government mandate.