Donnell Rehagen, CEO at Clean Fuels Alliance America joins us at the NAFB convention in Kansas City, Missouri.
Q: We have certainty with the elections, now with Trump administration 2.0 in terms of biofuels policy and more. What are some things you guys are watching? What’s going to be on your radar here over the next several months?
A: We actually saw a lot of good growth in our industry during the first Trump administration. It wasn’t without its challenges, obviously. So we were keeping an eye on the EPA administrator. You know, Representative Zeldin has been nominated for that and he hasn’t always shown himself to be a friend of renewable fuels. But I keep saying that’s eight or ten years ago we’re talking about now.
And so I think there’s a lot of differences in the US and the economy and agriculture from what it was like then. And I think there’s just a lot more support for renewable fuels today. And that’s one of our jobs. We have to continue to grow support for renewable fuels.
Q: With the incoming administration, could that mean any changes, favorable changes to, say, sustainable aviation fuel? It’s such a hot topic. We’re waiting on the 45Z guidance. With the new administration could they be a little more friendly to this movement?
Because I know there’s been quite a bit of investment from the oil industry and SAF. We’ve heard the comments from President Trump, you know – drill, baby, drill – those kinds of things. So, talk about that aspect with sustainable aviation fuel on the horizon here as a next great source for US producers right now.
A: The SAF industry is very intriguing. The good news is the airlines are clamoring for more sustainable aviation fuel. So, it’s not like in the past where we may have been producing fuels. The market might have been a little bit concerned about that. This is the exact opposite. We have friends in the airlines looking for greater SAF production.
It’s a great thing for agriculture. And for 45Z and how things shake out there, especially from the standpoint of climate-smart agriculture. Letting US farmers participate in this transition to cleaner airline fuels is going to be really, really important. And so that’s our biggest issue right now as an industry. Sustainable aviation fuel, biodiesel and renewable diesel is without the guidance for 45Z, which becomes the law of the land January 1st.
We’re already starting to see producers pull back on orders for feedstocks for production of fuels into January. And so that’s going to be a bad thing for our industry. It’s going to be a bad thing for agriculture. We really, really need to get that guidance out so everybody knows the rules we’re playing by.
Q: And a lot of folks are making those seed decisions right now for next year from a grower perspective. And you mentioned some of those plants. We have a lot of either plants that are idling already or construction projects that were slated to have started already that haven’t started because of some of this uncertainty. Donnell?
A: You and I have spoken about this for a long time about just the need for an industry that’s still growing to have some level of certainty. Investors don’t make decisions lightly when there’s a lot of uncertainty. And we have tax credit uncertainty on a regular basis.
Now we have these other policies that are uncertain. Growth in the RVOs is uncertain, and that’s not an inviting environment for investors. That’s what we need to get settled.
Q: Unfortunately, we’ve been having that conversation go round and round. And speaking of a round and round conversation; you mentioned RVOs, you mentioned Lee Zeldin earlier and maybe some of his not being friendly to biofuels. We got new RVOs that we’re going to have to set coming up here under this new administration, what’s the outlook for that?
A: We should already have those RVOs for the biomass-based diesel industry. Those should have been promulgated by the 1st of November. So just a couple weeks ago, and we don’t have an idea what that’s going to look like. This administration has suggested they’ll push a proposal out in March with the hopes of finalizing it by next December. They’ll be over a year late by that point in time.
And so back to this certainty conversation we just had. I mean, if we’re getting RVOs the week or the month before those RVOs start, how is our industry supposed to make those decisions? And that’s the reason why these guidelines, these timelines have been put in place from the beginning. So, the willingness of the EPA to just ignore that and to suggest that the marketplace will have to figure it out, it’s just not a fair response to an industry like ours. And again, another level of uncertainty.
Q: So many things to watch for, I guess. Final thoughts from you: what would you reiterate to folks listening in here as we’re looking to close out the year? We got so many of these different issues that we’re waiting on, etc. Looking ahead to the future here, 2025 and beyond – what do you want folks to keep in mind right now?
A: Jesse, we’ve talked about all the challenges that we have, but I’m just so excited about the future of this industry. And I look back 30 years now to where the soybean of the United States gave us an assignment to make and create a new product that adds value to soybean oil. And to think now that we’re a 5 billion gallon a year industry, it’s almost unimaginable. And so with that, I’m going to start 2025 being extremely excited about the opportunities in front of us and grateful to the nation’s soybean farmers for what they started.
Watch the full interview here:
