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Biofuels Groups Weigh Trump Effects
By Todd Neeley
Wednesday, February 5, 2025 3:12PM CST

ALTOONA, Iowa (DTN) -- As the Trump administration appears to be moving at light speed to implement its agenda, biofuels industry officials said on Tuesday they still are trying to get a read on how a U.S. Environmental Protection Agency led by Lee Zeldin will approach the big-ticket issues for biofuels producers and farmers.

That includes the need to set already-late Renewable Fuel Standard volumes for 2026 and perhaps multiple years, as well as potentially taking steps to make permanent year-round national sales of E15 -- although that may be up to Congress. In addition, the future of the 45Z Clean Fuels Production tax credit still remains foggy.

Perhaps the biggest question mark is whether Congress will be willing to tackle E15 in upcoming budget bills this spring.

Speaking at the Iowa Renewable Fuels Association summit in Altoona, Iowa, on Tuesday, biofuels industry officials weighed in on what's next in the biofuels policy arena.

At the end of 2024, national year-round E15 was included in a large federal government funding package -- only to later be removed in a final bill passed and signed into law.

Anthony Reed, a partner at FGS Global, a strategic advisory and communications consultant company that works with agriculture and biofuels groups, said during the summit that he expects Congress to revisit E15 soon.

There is talk about Congress considering two funding bills by March. Reed said there is bipartisan support in Washington, including the White House, to do something about E15 once and for all, perhaps as part of one of those bills.

Reed said E15 was a "victim of procedure" during the reconciliation funding debate at the end of last year. Congress removed all items that had nothing to do with funding the government, including year-round E15.

"Everything that had no impact on funding was stripped out," Reed said, hoping the industry would have "another bite at the apple" in March.

Eight Midwest states including Ohio, Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin requested the EPA to make year-round E15 sales permanent in their states. The rule finalized by EPA was delayed to April 2025. In addition, Ohio Republican Gov. Mike DeWine asked the Trump administration to delay implementation, https://www.dtnpf.com/….

Because a new Trump administration executive order declares an energy emergency and mentions granting another waiver to allow E15 sales to continue nationally during the summer, Reed said it may show what the Trump EPA is thinking about the states' request.

Reed said the administration may be "inclined to delay" the implementation of the E15 rule for the states for another year.

RESTORING DEMAND

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said on Tuesday, the downturn in agriculture comes from lower demand for ag products such as corn.

Allowing permanent year-round E15 sales across the country, he said, would boost the ag economy.

"I don't really want to spend more time talking about the need to hold the line on an eight-state solution," Shaw said.

"Congress should pass a permanent E15 fix, and they should do it without further delay. At a time when the ethanol industry, ag industry, fuel retailers, and yes, even the American Petroleum Institute all agree on this issue, it just shouldn't be this hard to get it done."

Shaw said he has heard that Speaker of the House Mike Johnson, R-La., "promised" he would "get an E15 fix" in the next funding package.

Recent press reports indicate the U.S. Senate wants to take up spending legislation in two separate bills, but there's concern about whether the House could pass two spending bills with just a slim three-member Republican majority.

Kevin Studer, vice president of government relations for the Iowa Corn Growers Association, said there is a "sentiment out there" that the Trump administration wants to get E15 "behind them and move on."

RENEWABLE FUEL STANDARD

Renewable Fuel Standard volumes for 2026 were to be finalized by the EPA in November 2024, but for now remain on track for the end of 2025.

Donnell Rehagen, CEO of Clean Fuels Alliance America, said his group sued the EPA on the RFS volumes delay.

"Our intention is to force the agency to move sooner," Rehagen said during the summit on Tuesday.

Although Clean Fuels Alliance America pushed the EPA to set volumes higher for biomass-based diesel, the multi-year so-called set rule that included volumes for 2023 through 2025 came up short as the industry produced volumes above the RFS.

Rehagen said agency officials have admitted to the group that volumes were not set high enough. Either way, industry officials have indicated they want the EPA to set volumes for multiple years at a time.

"We've had EPA get it wrong on a year-to-year basis," Rehagen said.

"To get as many as three years in a row is dampening our confidence. The industry wants a vision of growth."

Shaw said he would lean toward EPA setting volumes for two years instead of three in a single proposal because "if they get it wrong, then the certainty is it will be bad for three years."

No matter EPA's decision on the RFS going forward, industry leaders in Iowa this week said the new Trump administration needs to be up front about what it has planned for small-refinery exemptions.

"The timing on the SRE policy is really important to understand before we get a multi-year RFS," Reed said.

Currently there are 139 small-refinery exemption requests pending. During the first Trump administration, the EPA would finalize RFS volumes, only to follow up with large numbers of exemptions.

By the time Trump left office, Reed said the president "came to a very good understanding" of how RFS volumes work and why waivers hurt the biofuels industry.

"RVOs (renewable volume obligations) were meaningless because of SREs," Reed said.

FUTURE OF 45Z

Biodiesel and renewable diesel producers across the country have been slowing or shutting down production, because of what industry officials say is a lack of clarity on the new 45Z Clean Fuels Production tax credit.

The biodiesel blenders tax credit of $1 per gallon expired at the end of 2024, as the industry is making a transition to the 45Z.

On the way out, the Biden administration provided some guidance on 45Z, although many key details are still missing.

"The vagueness of the guidance has everyone a bit unsettled," Rehagen said on Tuesday.

The industry has done some calculations based on what the Biden administration released.

"Early on calculations show biodiesel and renewable diesel producers are not even getting $1 per gallon with 45Z," Rehagen said.

Depending on the feedstocks used, he said, producers would be getting anywhere from 30 to 60 cents per gallon.

"There needs to be a formal rule finalized," Rehagen said. "There is a lack of clarity."

Read more on DTN:

"EPA May Miss 2026 RFS Volumes Deadline," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on social platform X @DTNeeley


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