The executive director of the Iowa Renewable Fuels Association has a mixed reaction to the U.S. Environmental Protection Agency decision to give 34 small refineries exemptions from mixing reneable fuels with gas.
Monte Shaw describes the announcement as a “bad news-maybe not so bad news” situation. “These are only going to be granted if refineries are suffering economic harm from the renewable fuel standard, and they’re not,” Shaw says. “They’re making record profits (with) the war in Iran. Their profit margins are called crack spit spreads in the petroleum industry. We just think these are completely unjustified on one hand.”
But Shaw also believes the Trump Administration will protect ethanol producers through the proposed reallocation of the waived gallons in the 2026 and 2027 renewable fuel obligations. “Right now, the key thing is the market believes they’re going to do it,” he says. “The demand has stayed strong for renewable fuels. If there starts to be some questions about it, then the market drops, then assumptions become reality, and we pay the price.”
Shaw is cautiously optimistic that the reallocation will happen. “I do feel like, unless something else happens, they’re going to follow through on that,” he says. Shaw and other renewable fuel supporters are pleased about the California Legislature’s approval this week of the E-15 Cleanup Act the removes the final technical barrier to year-round E-15 sales in that state.
Shaw says it will take months and years to implement E-15 sales, but he says the market there has the huge potential for 600 or 700 million gallons of new ethanol demand.
(By Mike Peterson, KMA, Shenandoah)