EPA Refinery Exemptions Spur Concerns for Iowa's Biofuel Industry

The Environmental Protection Agency (EPA) has granted exemptions to 29 small oil refineries from renewable-fuel requirements, sparking concern from Iowa's agriculture and biofuel leaders. The exemptions cover about 1.76 billion ethanol-equivalent gallons of renewable fuel credits. For Iowa, this is a significant blow as the state produces 4.6 billion gallons of ethanol annually, accounting for approximately 28% of U.S. production.

The Renewable Fuel Standard requires oil companies to use renewable fuels such as ethanol and biodiesel or obtain credits showing they met federal requirements. If steps are not taken to combat the impact of these exemptions, it could reduce demand for ethanol, biodiesel, corn, and soybeans.

Industry groups have debated fuel costs, with some arguing that the renewable-fuel requirements create significant costs. The American Fuel and Petrochemical Manufacturers estimated annual compliance costs could approach $70 billion across the industry. However, others claim that greater use of ethanol can help lower fuel prices.