May 27, 2016

Renewable Fuels Association Concerned About President’s Commitment To Biofuels

ethanolA key leader in the ethanol industry is questioning President Obama’s legacy on renewable fuels following the Environmental Protection Agency’s latest Renewable Fuel Standard proposal.

Renewable Fuels Association president Bob Dinneen says the EPA draft RFS that comes up short of the overall statutory target by more than five billion gallons…

Dineen on RFS

Dineen’s group has already filed a lawsuit against the EPA over the EPA’s earlier RFS rule for 2014,15 and 16. RFA’s chief concedes EPA’s scaling back advanced biofuels use is “understandable” based on the slow progress of the industry. However, he accuses the administration of abusing its authority in scaling back conventional ethanol use when there is plenty of supply, but infrastructure has fallen short.

Meanwhile, Growth Energy’s Tom Buis previously stressed that the RFS is working…tape

Buis on RFS

Numerous farm groups and lawmakers of both parties are weighing in with disappointment over the latest RFS draft, hoping the EPA will change course in the final rule.

EPA will hold a public hearing on the proposal next month in Kansas City, Missouri. The public comment period will be open until July 11th.

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Bayer Officially Offers For Monsanto In Deal Valued At $42 Billion

Monsanto officially confirmed overnight that it has received an unsolicited offer from Bayer AG in a takeover that would combine two of the worlds largest seed and chemical makers.

Bayer confirmed Monsanto’s statement Thursday saying executives from the German based company had met with the executives of Monsanto about a tie up that would create a leading integrated agricultural business.  Neither company offered confirmation of the amount but sources say it should be around $42 billion, which is roughly equal to Monsanto’s current market capitalization.  No word yet on whether or not Monsanto is receptive to the deal.

The deal wouldn’t be without challenges.  Confirmation of the bid result sent Bayer shares lower as investors became concerned about the cost of such a deal as well as the fact that it would shift Bayers center of revenue firmly into agriculture.  Analysts also worry that regulators would be slow to bless such a union.  One analyst said the combination of the two would mean that 28% of the worlds pesticide, 36% of U.S corn seed and 28% of U.S. soybean seed would come from one manufacture.  Approval would like require Bayer to shed its glufosinate business as well as a smaller seed business that has  corn, cotton, and soybean seed genetics tolerant to glyphosate.

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Farm Groups Largely Disappointed With EPA Renewable Energy Proposal

The Environmental Protection Agency released a proposal Wednesday to increase renewable fuel volume requirements across all types of biofuels under the Renewable Fuel Standard. While agriculture and farm groups applaud the increase, industry groups say the increase is not enough. The proposal would increase total renewable fuel volumes by nearly 700 million gallons between 2016 and 2017. The conventional biofuel amount of 14.8 billion gallons is an increase from 14.5 billion gallons in 2016. The EPA says the increase will achieve 99 percent of the Congressional target of 15 billion gallons.

Growth Energy CEO Emily Skor argues the ethanol industry is “fully capable” of meeting the 15 billion gallon target set by Congress. For biodiesel, the EPA proposal would establish a 2.1 billion gallon Biomass-based Diesel requirement in 2018, up from the 2.0 billion gallon requirement for 2017. However Ann Steckel of the National Biodiesel Board says the industry has “plenty of feedstock and production capacity to exceed 2.5 billion gallons today, and can certainly do so in 2018.”

The National Corn Growers Association released a statement saying, in part:

EPA has moved in a better direction, but we are disappointed that they set the ethanol number below statute. The Renewable Fuel Standard is working for America. It has made our air cleaner. It has spurred investment in rural communities and created high-tech jobs. It has given drivers more choices at the gas pump. And it has reduced our dependency on foreign oil. Any reduction in the statutory amount takes America backward – destabilizing our environment, our economy, and our energy security. . .

“America’s corn farmers and the ethanol industry have done their job. NCGA will continue fighting to hold the government accountable for its promises. We call on the EPA to follow the law, and raise the ethanol volume to statute.

The EPA will accept comments on the proposal for 60 days.

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