The Renewable Fuel Standard (RFS) is under attack. Members of Congress have proposed legislation to repeal or reduce it, and ethanol opponents have requested that EPA waive the RFS. Here are some tools to help you defend it:
EPA Denies RFS Waiver Requests - read ACE's press release here.
RFS talking points for livestock sector
We know that many individual livestock producers support ethanol and want continued access to DDGs. Encourage ethanol supporters to submit comments today. Click here for talking points that address the value of ethanol production for the livestock sector.
"An American Success Story" - click here to view ACE's RFS Infographic, published March 2013.
Click here to view the "It's Working," infographic, a graphical representation of how the RFS and ethanol are reducing oil imports and saving Americans money at the pump published in March 2012.
Contact email@example.com to request hard copies of either version.
Research & Talking Points
University of Illinois: Stroke of pen won't ease plight of livestock producers
- "EPA does not necessarily have the ability to substantially ease the plight of livestock producers in 2012-13 at the stroke of a pen."
- "Waiving the RFS may have a smaller impact on the price or quantity of corn available for feed than many expect."
- Source: Scott Irwin and Darrel Good, Department of Agricultural and Consumer Economics, University of Illinois. August 2, 2012
CARD-ISU: No large drop in feed prices
- Updated model runs estimate a full waiver of the RFS in 2013 would result in a further 7.4% reduction in corn prices and a 500 million gallon decline in ethanol production for the 2012-2013 marketing year.
- The flexibility built into the RFS allows obligated parties to carry over blending credits (RINs) from previous years significantly lowers the economic impacts of a short crop. "The desire by livestock groups to see additional flexibility may not result in a large drop in feed prices as they hope."
- Source: Babcock, B. (2012). Updated assessment of the drought's impacts on crop prices and biofuel production. Center for Agricultural and Rural Development, Iowa State University. http://www.card.iastate.edu/publications/dbs/pdffiles/12pb8.pdf
Purdue: Waiver would have little impact on corn prices
- Refineries produce 84 octane gas and blend 10% ethanol to result in 87 octane finished fuel. If the RFS is waived, it would take 3 to 6 months for refineries to adjust to producing 87 octane. It is not clear refineries would adjust, they may simply continue blending ethanol.
- "If the 2013 average corn price is $8/bu or higher and crude oil remains at $100/bbl or lower, a waiver would likely have little or no near-term impact on ethanol demand and corn prices" because refineries don't have access to cheaper sources of octane.
- Source: Tyner, W., Taheripour, F., & Hurt, C. (2012). Potential impacts of a partial waiver of the ethanol blending rules. Purdue University and Farm Foundation. http://www.farmfoundation.org/news/articlefiles/1841-Purdue%20paper%20final%208-14-12.pdf
The market is working
- Today, ethanol plants are responding to corn price signals and curbing output. Production is down at least 15% since the beginning of 2012. In addition....
- ...ethanol's octane value and affordability have led refiners to purchase much more than statutory obligations for years, resulting in excess storage and RINs in the bank
- Approximately 800 million gallons of ethanol are in storage
Flexibility ensures compliance despite drought
- Obligated parties can use banked RINs and/or apply following year's RINs to current year's obligation.
- Ethanol stocks from previous ethanol overproduction have allowed refiners additional cushion - 2.6 billion RINs are already available.
- RINs act as built-in waiver, provide an additional 20% reduction in ethanol production. Up to 3.3 billion RINs could be used in 2013, reducing corn ethanol requirement to less than 10 billion gallons with NO CHANGE to RFS.
RFS makes more corn available for all end-use sectors
- Since the RFS was enacted in 2005, 5 of 6 largest corn crops ever were grown in the U.S. - with challenging growing conditions in 3 of those 5 years.
- Per today's WASDE report, the drought-ravaged 2012-2013 corn crop projected at 10.72 billion bu is likely larger than any corn crop production in the U.S. before 2003.
- U.S. corn production during the last major U.S. drought, in 1988, was less than five billion bushels. Less than half of this year's projected harvest.
RFS waiver about food maker profits, not consumer prices
- Waiver requests address costs for large food and meat processors - offer no guarantee of price reductions for consumers.
- Average non-ethanol corn use in U.S last 5 years:
7.5 billion bushels total
>1 billion bushels - human consumption
4.5 to 5 billion bushels - livestock feed
1.5 to 2 billion bushels - export (90% for livestock feed)
- U.S. corn production up 3 billion bushels a year since RFS.
RFS helps provide global market for corn
- From 2000 to 2010, world corn production went from 23 billion bushels to 33 billion bushels per year.
- World corn production was up another 2 billion bushels in 2011.
- 150% increase from 2000 to 2011.
- 43 nations have doubled corn production, 84 increased by 150% or more from 2000 to 2010.
- Mostly in Africa and former Soviet Republic
Waiving the RFS sends the wrong signal to farmers and investors
- With South American and African farmers making planting decisions, stable corn demand is essential to continued production of corn worldwide.
- While a waiver might reduce corn prices a small amount for a short period of time, it will also cause U.S. farmers to reconsider 2013 corn planting.
- Finally, a waiver sends a chilling signal to cellulosic and advanced biofuel producers and investors just as projects are nearing commercialization.
Letter from ACE, Environmental Groups
In a letter to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Speaker John Boehner and House Minority Leader Nancy Pelosi, a coalition of leading biofuel trade organizations joined with the American Coalition for Ethanol (ACE) urging Congress to stay the course on the RFS, and to tell EPA a waiver of RFS requirements is neither desirable nor warranted.
The letter, signed by ACE, the Advanced Ethanol Council, the Algae Biomass Organization, the Biotechnology Industry Organization, Growth Energy, the National Biodiesel Board, and the Renewable Fuels Association, comes while the EPA is considering a potential waiver of the RFS.
The groups caution against any changes to the RFS in a legislative manner saying "(a) number of groups and some governors have asserted that the RFS is a substanial part of the equation when it comes to grain prices, and they believe waiving the program this year or next will ease the impact of the drought on consumers. There is substanial evidence to the contrary."
The letter also provided evidence to demonstrate that:
- Waiving the RFS will have a minimal impact on grain prices;
- Weakening the U.S. commitment to renewable fuels will increase gas prices;
- Altering or waiving the RFS will chill investment in advanced biofuels;
- Waiving the RFS will destabilize a cornerstone of the U.S. economic recovery.