Economist Says Biofuel Waivers Can Be Recovered

As producers wait for President Trump’s big biofuel deal, an Illinois economist says the biofuel gallons waived by small refinery exemptions from 2016 to 2018 can be recovered with a simple three-year plan. The two-part plan includes removing the small refinery waivers altogether.

Scott Irwin, prof of agricultural economics at the University Of Illinois suggests the EPA could provide a blanket waiver for small refineries in the 2020 to 2022 annual rulemaking. This would eliminate the applications, preventing larger refineries from exemption. The second part of the proposal says the EPA could reallocate lost gallons, on top of the already designated volumes, by adding 1.35 billion gallons a year to the total renewable volumes for the next three years totaling around 4 billion gallons.

He says that a blanket waiver combined with volumes from the past could total up to 3 billion gallons of blending requirements per year for the oil industry.

While some are concerned this shift in the market could affect feed ingredient costs and supply, Irwin says the temporary plan would help use up the nation’s oversupply of soybeans for biodiesel. If this proposal were to ever be considered, Irwin says he expects the biggest push back to come from congress with senators and representatives clashing from both corn and oil states.

Report By: Corryn LaRue