The Environmental Protection Agency (EPA) has released a proposed 2014 renewable fuel (RFS) standard that will require refiners to blend up to 15.21 billion gallons of biofuels into gasoline next year, which represents the first-ever reduction in a biofuels mandate that Congress created during the George W. Bush administration. The conventional fuel mandate (corn-based ethanol) would be 13.0 billion gallons rather than the originally required 14.4 billion gallons.
The proposal marked the first time EPA has lowered the overall ethanol-blending requirement from the prior year's target. The move lowers the mandate from the 2013 required volume, 16.55 billion gallons, back to where it was in 2012. The agency is taking comments on a range of 15.00 to 15.52 billon gallons in its proposal. Congress sets the renewable fuels volume mandates, but EPA can administratively lower the requirement in certain situations.
“Biofuels are a key part of the Obama Administration’s “all of the above” energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs,” said EPA Administrator Gina McCarthy. “We have made great progress in recent years, and EPA continues to support the RFS goal of increasing biofuel production and use. We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the RFS program.”
"EPA's announcement today is a good first and welcome step, but ultimately, Congress must act. Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace," said NCC President Mike Brown.
"As corn comprises nearly 70 percent of the feed given to chickens, our single largest input cost, rising prices directly affect farmers and consumers bottom lines. Since the RFS was aggressively escalated in 2007, average annual feed costs have skyrocketed by $8.8 billion for poultry producers. Last year, the average U.S. family of four faced a $2,000 increase in food costs due to higher corn prices brought on largely by the RFS. We know all too well from last year that corn crop projections and inventories can be erased by Mother Nature's wrath."
“EPA’s decision to reduce the ethanol mandate is long overdue,” said AMI Vice President of Regulatory Affairs and General Counsel Mark Dopp on a call with reporters. “While this is a positive step, the fact remains the RFS is a flawed policy that requires Congressional action. Even with a record corn crop expected this year, the damaging ripple effect of this defective policy has moved through the meat and poultry complex for the past several years. The time for Congressional action is now.”
Recently released USDA data demonstrates the need for RFS reform, AMI stated. Food costs have outpaced other staple items during the past year, climbing 1.4% according to the consumer price index released October 30. However, meat prices -- which include beef, pork, poultry, and eggs – rose 2.9% since September 2012. According to USDA’s September Livestock Outlook, monthly retail beef prices set successive new records in July and August with Choice beef prices reaching $5.39 per pound, while all-fresh beef reached $4.97 per pound.
Sources: AMI, NCC, EPA
