A recent report by the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) released a study late last week that examined the impacts of small refinery exemptions (SREs) on domestic ethanol demand. SREs are reserved for only a handful of small refiners, which must demonstrate disproportionate economic hardship in meeting the requirements of the Renewable Fuel Standard (RFS). However, there is increasing evidence that EPA has given exemptions to large refiners reporting record profits and provided very little transparency to the public regarding its decision making.
Under FAPRI’s analysis, if the Environmental Protection Agency (EPA) continues to follow recent practices on RFS waivers, ethanol consumption would drop by hundreds of million gallons per year between 2018 and 2023. That, in turn, could translate to 1.6 billion bushels of lost demand for corn over the six-year period. In addition, the study suggests that the ethanol blend rate would fall steadily, dropping below 10 percent in 2019 and down to 9.5 percent by 2023 – compared to the 10.4 percent forecast before the EPA expanded its use of waivers.