The US ethanol market is ready to stand without support from government regulations and the Renewable Fuel Standard should be repealed, Chet Thompson, president of the American Fuel and Petrochemicals Manufacturers organization, said this week in an interview with S&P Global Platts.
"We think it's time that the ethanol market is mature and it can stand on its own," Thompson said on the sidelines of the National Ethanol Conference in San Diego. "This is not an anti-ethanol position. My members are some of the largest ethanol producers in the country, but we think that the time has come for the industry to fly on its own."
Thompson said that AFPM has sought and continues to seek a repeal of the federal Renewable Fuel Standard, the program that mandates biofuels blending with transportation fuel in the US.
"Let me be really clear about something, from AFPM's perspective our No. 1 goal is to seek, in this order: No. 1 RFS repeal ... and No. 2, if we're not going to get repeal, then we certainly would prefer legislative reform, which is why we support what Congressmen Flores and Welch propose. And our position is until that happens we believe EPA could take administrative action to make the program more equitable."
Congressmen Bill Flores, R-Texas, and Peter Welch, D-Vermont, have put forward a bill to reform the RFS and cap ethanol blending with gasoline at 9.7%.
Thompson cited the advanced and cellulosic biofuels portions of the RFS as an example of regulation holding up a struggling industry.
"The problem with advanced and particularly cellulosic, is that it's undeniable the program is a failure," he said.
Congress set a goal of blending 5.5 billion gallons of cellulosic biofuels in 2017, but the Environmental Protection Agency has used waiver authority to lower the compliance goal to 311 million gallons in 2017.
But Thompson's call for repeal or reform was not limited to federal regulations. He said state programs, like California's Low Carbon Fuel Standard, also need to be slashed.
"I think the California LCFS is illegal, I think it's unconstitutional," he said.
AFPM has sought litigation against California's program. Thompson acknowledged that route has not be successful yet, "but it's not over."
He went on to say that the Renewable Fuels Association, the largest biofuels group in the US, and AFPM could find common ground on opposition to parts of the LCFS.
"The LCFS is code for electrifying the fleet," he said.
Bob Dinneen, president of the RFA, and Thompson both spoke at the conference on the importance of keeping liquid transportation fuels viable.
"The Low Carbon Fuel Standard as California has set it up is really ... code for wanting to do away with our products and we have a real problem with that," Thompson said.
At the end of the day, AFPM wants commodities to operate in a free market, Thompson said. And that means keeping the playing field level for all participants.
"When you have the federal government coming up with programs designed to to eliminate fossil fuel use by 80%, which is what the Department of Energy had, when you have CAFE standards that are intentionally designed to make it so the only way to comply is to electrify the fleet ... we think those are unfair advantages to that industry," he said.
