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FOR IMMEDIATE RELEASE
May 6, 2009

EPA’s Proposed RFS2 Rules a Mixed Bag for
Iowa Ethanol and Biodiesel Producers

JOHNSTON, IA – The U.S. Environmental Protection Agency (EPA) today released its long-awaited proposed rule to revise the federal Renewable Fuels Standard (RFS) to conform to the Energy Independence and Security Act of 2007.   The rule included EPA’s effort to compare the carbon footprints of various renewable fuels with those of average petroleum fuels.  According to the 2007 law, renewable fuels must meet specific greenhouse gas (GHG) emission thresholds in order to quality for the RFS program.  All fuels, including corn ethanol, are required to meet a 20% reduction in lifecycle GHG emissions, while biodiesel must meet a 50% reduction threshold and cellulosic ethanol must meet a 60% reduction threshold.

In conjunction with the EPA’s rule announcement, the heads of USDA, DOE and EPA also announced the creation of the Biofuels Interagency Working Group that will develop the nation's first comprehensive biofuels market development program, identify new policy options to improve the environmental sustainability of biofuels feedstock production, and develop policies to increase flexible fuel vehicle production and assist in retail marketing efforts.

Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw made the following statement:

“Today’s announcement was a mixed bag for ethanol and biodiesel producers.  While not a surprise, EPA’s current methodology for calculating indirect land use change penalties for biofuels equates to carbon footprints that do not meet the 20% and 50% reduction thresholds for ethanol and biodiesel respectively.  This same analysis is not done for the baseline petroleum fuels and that is wrong.

“However, EPA is going to consider improvements to their modeling which we believe should dramatically improve GHG profile of domestically-produced renewable fuels.  EPA has committed to having the final model peer reviewed by the scientific community, which we view as a major victory.  Better science equates to a better result for biofuels.

“Finally, the new Biofuels Interagency Working Group headed by USDA Secretary Vilsack is a very positive development.  The federal government needs to coordinate how the RFS requirement for increased renewable fuels translates into actual use by consumers.  The current E10 cap, lack of E85 retail infrastructure and biodiesel blending infrastructure, and the lack of a significant commitment to flexible fuel vehicle (FFV) production poses a threat to RFS implementation unless addressed decisively in the near term.”

Iowa is the leader in renewable fuels production.  Iowa has 40 ethanol refineries capable of producing nearly 3.3 billion gallons annually.  Three ethanol refineries under construction will add nearly 500 million gallons of capacity.  In addition, Iowa has 14 biodiesel refineries with the capacity to produce over 317 million gallons annually.  Two biodiesel refineries under construction will add 35 million gallons of annual capacity. 

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s ethanol and biodiesel producers. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.

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For more information, visit the Iowa Renewable Fuels Association website at:  www.IowaRFA.org.