Advanced Biofuel Companies Tell White House: Changes to RFS Program Will Undercut Investment

WASHINGTON--October 29, 2013: The Biotechnology Industry Organization (BIO), the Advanced Ethanol Council (AEC) and 37 of their member companies today wrote the White House to express grave concerns over a draft proposal for the 2014 Renewable Fuel Standard (RFS) rules recently unlawfully leaked to the media. The leading advanced biofuel trade organizations and companies noted that EPA must continue to follow the data-driven approach it has used to date in order to open the market to competition and achieve the goals of the program. In the letter, the organizations and companies say:

“On the legal side, we believe that any reliance on the blend wall to provide effective waiver of the program presents the same problem. The legal standard for a waiver is narrow by design.”

“The RFS is engineered to address challenges like the oil industry’s historic and current refusal to blend more renewable fuels. Investors in next generation biofuels understand how the RFS and RIN values work to introduce market access for advanced biofuels. As such, any perceived unwillingness on the part of RFS administrators to allow the program to work would send a clear signal to the advanced biofuel marketplace that the RFS may not be allowed to change market behavior as promised. This mere possibility increases investment risk, which in turn decreases the effective deployment of advanced biofuels.

“On the legal side, we believe that any reliance on the blend wall to provide effective waiver of the program presents the same problem. The legal standard for a waiver is narrow by design.”

The advanced biofuel trade organizations and companies concluded the letter by writing:

“[The RFS] is a landmark and innovative program that has been administered admirably by EPA/OMB to date and is changing U.S. liquid fuel markets at the fundamental level. But the RFS is only recently pushing the oil industry out of its comfort zone with regard to the amount of renewable fuel utilized in the marketplace and the types of advanced fuels beginning to come online from new sectors. Depressurizing the program too aggressively at this critical juncture will only make the deployment of advanced biofuels more challenging by embedding willful non-compliance as a construct for discouraging innovation, blocking the availability of cheaper fuels and increasing pump prices, and undercutting billions of dollars in investment in advanced biofuels.”