RFS waiver denied, ethanol mandate maintained

cornIn the latest showdown between the livestock industry and ethanol industry, ethanol came out on top with the Renewable Fuel Standards intact.

Livestock producers and ethanol producers are often at odds over the production of food versus fuel. However, the battle has heated up recently with extreme drought across much of the US leading to corn crop losses and higher feed prices. As a result, the poultry, pork, beef, and dairy industries have been lobbying the EPA to waive the Renewable Fuels Standard (RFS) during 2012 and 2013.

The RFS, which requires 13.8 billion gallons of ethanol be blended into gasoline by 2013 and uses about 4.5 billion bushels of corn for ethanol production, has been further driving up corn prices and hurting livestock producers, according to livestock industry groups like the National Turkey Federation, National Pork Producers Council, and the National Cattlemen’s Beef Association.

The EPA, in conjunction with the USDA and DOE, denied the waiver requests, upsetting many in the livestock industry. The EPA says there is not sufficient evidence that leaving the RFS in place would cause severe harm and therefore the criteria for a waiver as established in the Energy Policy Act of 2005 have not been met.

Waiving the ethanol mandate would also only lower corn prices 1 percent, according to analysis by the USDA and EPA.

Both corn farmers and biofuel producers are happy with the EPA’s decision. Ethanol producers rely on support from the US government. The denial of the RFS waiver reaffirms that support, according to AgriNews.

The “decision means the Renewable Fuel Standard remains strong and stable policy, and our industry can move forward with greater confidence, continuing to invest in new technology to make biofuels production even more efficient and commercializing fuel production from cellulosic feedstocks such as crop residue and other plant material,” according to ethanol producer POET’s CEO Jeff Lautt.

For more information on the livestock and biofuel industries, read First Research’s industry coverage on Hoover’s.

~

Photo by Matt Dente, used under a CC-Share Alike license.

Rebecca Mallett

Rebecca Mallett has been researching and writing about companies, industries, and executives as a member of the Hoover’s editorial team since 2007. For the past 5 years, she has focused on the agriculture and food manufacturing, business services, and mining and energy industries as a member of the First Research team. Follow her on Twitter.

Read more articles by Rebecca Mallett.

Leave a Comment