The U.S. Environmental Protection Agency (EPA) announced last week that it would not grant a waiver of the Renewable Fuels Standard (RFS) because it would only reduce corn prices by approximately 1% and would have no impact on household energy costs.
“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that Congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact.”
The RFS, established by Congress in the Energy Policy Act of 2005 (EPAct), required the EPA to implement a standard to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. This is the second time that EPA has considered an RFS waiver request. In 2008, the EPA denied Texas a waiver.
The National Council of Chain Restaurants issued a statement expressing its disappointment about EPA’s decision, saying: “We will continue to press the case to policymakers that the RFS is a flawed law which unfairly distorts the market at the expense of chain restaurants, our consumers, and everyone else involved in the food supply chain.”
In October, NACS and SIGMA urged the EPA to reject RFS waiver requests, but asked the agency to consider adjustments to the mandate in future years. NACS and SIGMA maintained rejection of the waiver requests would avoid “disrupting business decisions premised upon the statutory volume obligations for 2013.” However, both associations said the EPA should consider lowering the RFS volume obligations for future years.
“The issues affecting the market this year may well be replicated in the next couple of years,” explained NACS Vice President of Government Relations John Eichberger. “While we do not support a decision that would disrupt the market this year, we believe strongly that the renewable fuels requirements in future years should be evaluated and the market be given as much flexibility as possible.”
The decision to urge rejection of the waiver request was not an easy one for NACS and SIGMA, who “weighed a number of sometimes conflicting values,” including the value of free markets and the assurance of market and regulatory certainty as prerequisites to long-term planning. (NACS: www.nacsonline.com)