October 31, 2019. Renewable natural gas (RNG) industry stakeholders from across the nation spoke at yesterday’s U.S. EPA public hearing in Michigan to provide feedback to a supplemental proposal published by EPA in the hope to fix issues with biofuel volumes waived via small refinery exemptions (SRE) under the Renewable Fuel Standard (RFS).
“We appreciate EPA’s efforts to account for future small refinery exemptions, but this proposal falls short of sufficiently addressing the negative impacts of future waivers and of those already granted,” said David Cox, Director of Operations for the RNG Coalition. “The 2020 cellulosic biofuel volume set by EPA needs to also address the damage SREs have caused to date to the renewable natural gas industry.”
Prior to this year, RNG used as a clean transportation fuel under the RFS grew more than 300 percent and has accounted for over 95 percent of the cellulosic biofuel portion of the RFS since 2014.
“Congress’s attempts to nurture and grow a fuel which creates the largest greenhouse gas reduction has been destabilized to the point that projects are being put on hold or cancelled,” said Rick DiGia, President and CEO of Aria Energy, headquartered just down the highway from today’s hearing in Michigan. “EPA is right to take action to address the impact of SREs, but has not fully addressed the need for transparency and clear criteria on how it grants SREs, as well as the timing of those exemptions. A balanced mandate is the only solution to drive sustained investment.”
“We are thankful that the EPA is now recognizing how granting excessive SRE’s without accounting for them can destroy a market, and it is our hope that [EPA] will consider taking more drastic measures to rebalance the market and create liquidity and stability for both producers and obligated parties,” said Luke Morrow, President of Texas-based Morrow Renewables.
“Project financing has been and will always be a significant challenge if regulatory uncertainty and pricing instability exists,” said Tyler Henn, Vice President of Clean Energy Fuels, based in California. “To create a balanced market for the remainder of 2019 and into 2020, we ask EPA to consider a [cellulosic volume] of no less than 650 million gallons. It is a level that is both attainable and mitigates the negative impacts on SREs.”