Brian Jennings, President of the American Coalition for Ethanol joins Jesse Allen at the National Association of Farm Broadcasters convention to talk updates in the ethanol industry.
Q: We’re post-election now; what does Trump administration 2.0 mean for ethanol and biofuels? I think there’s maybe some things we could learn from the first go-round that we could see in the second go-round here. Now that we have some election certainty, what does it mean for ethanol?
BJ: I think for ethanol overall, it’s positive. The first thing I’m encouraged by when it comes to a Trump 2.0 administration is instead of an EPA that seems singularly-focused on promoting electric vehicles and overlooking some of the benefits of ethanol, we’re hopefully going to have an EPA that understands the valuable role that liquid fuels play, that a higher octane fuel like ethanol plays, that flexible fuel vehicles can play.
And so from a 30,000 foot standpoint, I think we can work with a Trump 2.0 administration to secure a stronger future for liquid fuels. It benefits both fossil fuels, which is going to be important politically to President Trump, and ethanol, which is also politically important to President Trump, and try to achieve something that’s win-win instead of forcing electric vehicles down sort of the throats of Americans. From a broad standpoint, I’m looking forward to that.
I’m concerned about some of the history with small refinery exemptions under the renewable fuel standard. Both EPA administrators in the first Trump administration, Scott Pruitt and Andy Wheeler, really did some damage to the RFS relative to small refinery exemptions. And it forced us and others to go to court to try to rectify things. Unfortunately, things are still sort of bogged up in the court system.
But when it comes to former Congressman Lee Zeldin of New York, who has been nominated or will be nominated to lead EPA, we have some serious questions that we need to have asked of him. Why did he oppose the RFS as a member of Congress? Maybe it was because he represented Long Island, and he was misled about what the RFS is and isn’t. But this will be incumbent upon Republican senators, particularly because they’re in control. During his confirmation process in the one-on-one meetings they have with him, Jesse, and in the confirmation hearings to ask the tough questions of former Congressman Zeldin about the RFS and E15.
Q: I share some of those same concerns with you as we see his nomination. And I think about this too with Lee Zeldin leading EPA. We presume, I know renewable value obligations, we’ve got those we must figure out. And that’s going to be done under this administration, we presume.
And so there’s another piece along with the SREs you mentioned that there’s some important policy here and some different things that we really need to keep an eye on.
BJ: You’re so right. The clock is ticking on the RFS. We need to know the RVOs for 2026 and 2027. The Biden EPA was supposed to put out a proposal; they punted.
And so now this responsibility falls in the lap of the Trump EPA. And if Mr. Zeldin is confirmed, you’re right, one of the first orders of business is to put out volume obligations for 2026, and we presume for 2027. And so we’ve got to engage with him, and as I said, all to sort of get us in a position where we think we can do well.
Q: As we talk ethanol post-election, let’s talk E15. We saw the news out of California with Governor Newsom – his mandate to carb the California Air Resources Board. We know California, of course, the final state that doesn’t have E15. But wondering too, what about a nationwide fix for E15 year-round? Can we see that through Congress through a farm bill potentially? What’s the latest there?
BJ: First on California – it’s important because not only is it this only state that’s holding out, but it’s also the largest gasoline market in the country. And so they could still blend a lot of ethanol if they move to E15. So we’re hopeful they do on Congress and legislation to allow for E15 nationwide. I think we have a serious opportunity, Jesse, with a new Congress, a Senate led by John Thune of South Dakota – a champion of agriculture, a champion of ethanol, a co-sponsor of legislation – to allow E15 year-round.
I think we have a real opportunity to tee things up. Maybe in the lame duck there are opportunities as well. But you know, I think the primary obstacle to this legislation has been Senator Tom Carper, Democrat of Delaware, chairman of the Environment Public Works Committee in the Senate. He sort of prevented our legislation from moving forward. And so we may try in the lame duck, but I think we’re going to likely have better prospects in a new Congress led by John Thune, particularly in the Senate, and that that will have to be our top legislative priority.
Eight Midwest states will be good to go, but the rest of the country needs a solution as well.
Q: Any other thoughts? Anything else you’re watching here as we wrap up the year, look to next year when it comes to the ethanol biofuels industry? What’s on your mind, Brian?
BJ: The other thing is really that 45Z clean fuel production tax credit, Jesse. The Biden treasury has not put out any guidance whatsoever. This tax credit is supposed to kick in on January 1st. It’s looking more and more likely that that responsibility will be handed over to the Trump administration. So many questions. Will the Trump administration sort of put a pause on all rulemaking to sort of get a handle on things?
That’s a normal operating procedure which would have the unintended consequence of delaying that even further. Not really their fault. The Biden treasury hasn’t put out rules. But we want common-sense agriculture practices to qualify for that tax credit. We’ve been working toward that end.
And then the other thing relative to that, Jesse, the final thing I will say, is that the Trump tax cuts expire in 2025. A Republican Congress will use the reconciliation rules to extend those tax credits. And that will be a vehicle for us to try and do certain things, particularly as it relates to the 45Z clean fuel production tax credit, perhaps extend the life of it beyond 2027. That’s also on our radar.
