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POET responds to EPA Renewable Volume Obligation proposal

POET CEO: Proposal ‘puts oil industry’s agenda ahead of farmers and rural America’

 

Friday, May 29, 2015 - General Press Releases

 

SIOUX FALLS, S.D. (May 29, 2015) – POET CEO Jeff Lautt today responded to the EPA’s proposed rule on the 2014, 2015 and 2016 Renewable Volume Obligiations under the Renewable Fuel Standard.

“Today’s proposal by the EPA puts the oil industry’s agenda ahead of farmers and rural America. While the EPA is correct in recognizing the intent of Congress to continue growth in biofuels, the targets announced today fall well short of rural America’s potential to produce low-cost, clean-burning ethanol.

“America’s farmers have answered the call laid out in the Renewable Fuel Standard to help wean our nation off of foreign oil. Agriculture has taken incredible strides in recent years, growing yields through efficient farming practices and technology improvements, and we have all reaped the benefits of that labor through greater availability of high-performance, domesticly produced ethanol. Rural America has upheld its end of the deal, and I ask that the EPA uphold Washington’s end.

“Some in Washington do understand what’s at stake and are still committed to rural America. The announcement by Sec. Vilsack today that UDSA would provide funds for flex pump infrastructure aims to increase consumer access to clean, high-performance fuel produced here at home. It is an effort obligated parties should have been driving since the RFS became law. We hope Sec. Vilsack’s commitment to clean fuels and rural America rubs off on some of his colleagues in the Administration.

“For the sake of consumer choice, rural jobs and strong markets for farmers, I hope the EPA fixes its mistakes in the proposed rule and recognizes our nation’s capability to power itself with clean, renewable fuel.”

About POET

POET, one of the world’s largest ethanol producers, is a leader in biorefining through its efficient, vertically integrated approach to production. The 28-year-old company has a production capacity in excess of 1.7 billion gallons of ethanol and 9 billion pounds of high-protein animal feed annually from its network of 27 production facilities. POET, through its joint venture with DSM, also operates a commercial-scale cellulosic ethanol plant in Emmetsburg, Iowa. For more information, visit http://www.poet.com.





EPA Proposes Renewable Fuel Standards for 2014, 2015, and 2016, and the Biomass-Based Diesel Volume for 2017
Under the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) is required to set the annual standards for the Renewable Fuel Standard (RFS) program for each year. This regulatory action proposes to establish the annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuels that apply to all gasoline and diesel produced or imported in years 2014, 2015, and 2016. EPA is also proposing the applicable volume of biomass-based diesel that will be required in 2017.
The Clean Air Act provides EPA with the authority to reduce the volume requirements from their statutory targets under certain conditions, and we are proposing to use these authorities in this action. EPA has evaluated the availability of qualifying renewable fuels and factors that in some cases constrain the supply of those fuels to the vehicles that can consume them. EPA has also considered the ability of the market to respond to the applicable standards by producing changes in production, infrastructure, and relative pricing to boost the use of renewable fuels.
Based on these and other considerations, EPA is proposing volumes which, while below the volumes originally set by Congress, would increase renewable fuel use in the
U.S. above historical levels and provide for steady growth over time. In particular, the proposed volumes would ensure continued growth in advanced biofuels, which have a lower greenhouse gas emissions profile than conventional biofuels. EPA is also proposing to increase the required volume of biomass-based diesel in 2015, 2016, and 2017 while maintaining the opportunity for growth in other advanced biofuels that is needed over the long term.
Congress developed the renewable fuels program in an effort to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector, while reducing reliance
Office of Transportation and Air Quality EPA-420-F-15-028 May 2015 Regulatory Announcement
on foreign oil. Biofuels are an important component in the Administration’s efforts to enhance energy security and address climate change.
EPA is seeking comment and any new data to inform setting the final volume standards, and will hold a public hearing on June 25, 2015, in Kansas City, Kansas.
EPA intends to take final action on this proposal by November 30, 2015, which will return the Agency to the program’s statutory timeline for issuing RFS annual rules.
Overview
Due to constraints in the fuel market to accommodate increasing volumes of ethanol, along with limits on the availability of non-ethanol renewable fuels, the volume targets specified by Congress in the Clean Air Act for 2014, 2015 and 2016 cannot be achieved. However, EPA recognizes that the statutory volume targets were intended to be ambitious; Congress set targets that envisioned growth at a pace that far exceeded historical growth rates. Congress clearly intended the RFS program to incentivize changes that would be unlikely to occur absent the RFS program. Thus while EPA is proposing to use the tools provided by Congress to waive the annual volumes below the statutory levels, we are proposing standards that are directionally consistent with Congress’ clear goal of increasing renewable fuel production and use over time. The proposed volumes would require significant growth in renewable fuel production and use over historical levels. EPA believes the proposed standards to be ambitious but within reach of a responsive marketplace.
There are two different authorities in the statute that permit EPA to reduce volumes of advanced biofuel and total renewable fuel below the volumes specified in the statute. When the Agency lowers the applicable volume of cellulosic biofuel below the volume specified in the CAA, we also have the authority to reduce the applicable volumes of advanced biofuel and total renewable fuel by the same or a lesser amount. The Agency can also reduce the applicable volumes of any renewable fuel under the CAA general waiver authority under certain conditions, including where there is “inadequate domestic supply.” This proposal uses a combination of these two authorities to reduce volumes of both advanced biofuel and total renewable fuel to address two important constraints:
• Limitations in the volume of ethanol that can be consumed given practical constraints
on the supply of higher ethanol blends to the vehicles that can use them
• Limitations in the ability of the industry to produce sufficient volumes of qualifying
renewable fuel, particularly non-ethanol fuels
EPA is proposing to set the renewable fuel standards for 2014 at the levels that were actually produced and used as transportation fuel, heating oil or jet fuel in the contiguous U.S. and Hawaii. For 2015 and 2016, EPA is proposing ambitious increases in both advanced biofuel and total renewable fuel in comparison to 2014 levels. This proposed rulemaking also provides an evaluation of the expected volumes of cellulosic biofuel for 2015 and 2016, and proposes annual increases in the required volume of biomass-based diesel for 2015, 2016, and 2017. The volumes used to determine the proposed percentage standards are shown in Table 1.
2 Regulatory Announcement

Table 1 Volumes Used to Determine the Proposed Percentage Standardsa 2014 2015 2016 2017  
Cellulosic biofuel 33 mill gal 106 mill gal 206 mill gal n/a
Biomass-based diesel 1.63 bill gal 1.70 bill gal 1.80 bill gal 1.90 bill gal
Advanced biofuel 2.68 bill gal 2.90 bill gal 3.40 bill gal n/a
Total renewable fuels 15.93 bill gal 16.30 bill gal 17.40 bill gal n/a


PLEASE CONTACT YOUR LOCAL REPRESENTATIVE TO VOICE YOUR OPINION!!




March 4, 2015

Dear POET Grower/Supplier:

Several corn varieties containing genetically modified traits have been commercially introduced in the US that have not yet obtained approval in major export markets such as the EU and China. These GMO corn varieties pose a significant export trade risk to US companies – including POET – that participate in global markets. This is because shipments of corn and DDGs containing unapproved traits can be, and have been, rejected for import into markets such as China. At least two large US grain traders and exporters have already indicated that they will not accept deliveries of corn varieties that are unapproved for import into the EU or China because of the potential disruptions and financial loss that could result.

POET strongly urges farmers not to plant GMO corn varieties that may be currently commercially available in the US but are not approved for import into major export markets such as the EU and China. This includes, but not limited to, Syngenta’s Duracade™ corn strain, which is available in the US but is not approved for import into the EU or China currently. We believe that farmers will better assure strong demand and strong prices for their corn by planting varieties that are approved for import into the EU and China.

POET reserves the right to reject and/or require testing of corn deliveries. Any acceptance, rejection or testing for the presence of unapproved GMO corn varieties – such as Duracade – will be determined by POET in its sole discretion at the time of delivery.

The Syngenta Agrisure Viptera (MIR 162) corn trait has been approved by all major importing markets and POET will accept delivery of this corn trait in 2015.

Please contact your local seed sales representative to get more information on the approval status of their specific GMO corn varieties. You can also visit the following web site: http://www.ncga.com/for-farmers/know-before-you-grow to go to the "Know Before You Grow" section of the National Corn Growers Association page for more information.

Thank you for your grain business!

Best Regards,

POET Grain Company

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