POET's involvement in federal and state policy issues.

EPA: Destabilizing Cellulosic Innovation

Cellulosic Biofuels and the Renewable Fuel Standard (RFS)

Under the Renewable Fuel Standard, as expanded by Congress in 2007, the United States set an ambitious goal of increasing the production of cellulosic biofuels to 16 billion gallons each year.

Cellulosic biofuels are made from inedible plant material such as agricultural residues, perennial grasses, and wood chips.

By law, all cellulosic biofuels must reduce emissions by at least 60 percent, while some varieties reduce greenhouse gas emissions by 100 percent or even sequester carbon over time.

Policy Instability and Lost Opportunity

Unfortunately, years of policy instability, rulemaking delays, and discouraging market signals from the Environmental Protection Agency (EPA) have chilled investment and stymied growth.

Under the most recent EPA proposal for 2020, cellulosic targets would be held to a mere 540 million gallons, compared to the 10.5 billion gallon target set by Congress.

According to the Biotechnology Innovation Organization, regulatory uncertainty has frozen investments in advanced biofuels totaling an estimated $22.4 billion.

  • Despite clear direction from Congress, the EPA sets forward-looking targets for cellulosic biofuels based on backwards-looking production estimates, thus destroying the incentive for year-to-year growth.
  • The EPA has refused to certify innovative pathways for the creation of cellulosic biofuels using new techniques and feedstocks.
  • The EPA has refused to certify cutting-edge plants that have adopted new technologies to convert corn kernel fiber and other cellulosic biomass into cellulosic ethanol.
  • The EPA has granted dozens of special refinery exemptions, destroying demand for billions of gallons of biofuels under the RFS, including cellulosic biofuels.
  • The EPA has offered cellulosic waiver credits (CWC) as a low-cost alternative to utilizing cellulosic biofuels.

Similar instability has impacted cellulosic biofuels via the tax code, under which a $1.01 per gallon of Second Generation Biofuel Producer Tax Credit expired in December 2016, was later extended retroactively to December 2017, then allowed once again to expire, despite ongoing efforts by biofuel champions in Congress.

D3 RIN Values & EPA Mismanagement

The RFS creates a market-based incentive to utilize homegrown biofuels, which is reflected in the value of Renewable Identification Numbers (RINs). RINs are created when biofuels are blended into the fuel supply. Each kind of biofuel generates a different class of RIN.

For example, blending a gallon of conventional ethanol – made from corn – into the fuel supply generates one D6 RIN. Cellulosic ethanol generates D3 RINs, and cellulosic biodiesel generates D7 RINs.

Refiners who have not blended enough biofuel to meet their targets can simply purchase surplus RINs from retailers, refiners, and other fuel blenders. The higher the value of a RIN, the greater the incentive to blend – and invest in – that class of biofuel.

When the EPA undermines the RFS, the value of RINs can plummet. And when the value of D3 RINs drops, the most advanced biofuels may no longer be economically viable, forcing producers to halt production or cut investments in growth.

Since the end of 2017, the EPA has effectively cut the incentive to blend cellulosic biofuels from nearly $3.00 to as low as 59 cents per D3 RIN.

POET Good Stewards: The Handsaker Family


On October 4, the White House announced a comprehensive plan that sets us on a path to restore integrity to the Renewable Fuel Standard. This plan comes after years of Big Oil corruption hurting farmers and biofuels workers across the Midwest. Biofuels Champions like President Trump, Senators Ernst, Grassley, Thune, and Rounds, and Governors Reynolds and Noem worked tirelessly to put farm families first.

We’re grateful for the dedication and unwavering support of the elected officials who have stood up for what’s right and restored integrity to the RFS.

The biofuels plan:

  • Accounts for future SREs. The oil industry as a whole will no longer be able to weasel its way out of the program.
  • Considers new regulations to remove burdens E15 faces at the pump and reduce confusion for consumers. Labels and other important impediments will be revised.
  • Includes significant resources to promote and develop E15 infrastructure in order to provide more consumer access to affordable renewable fuels.
  • Directs the Administration to work on trade deals to benefit the biofuel community.

The RFS is a critical, bipartisan, American energy policy that was signed into law in 2005 and expanded in 2007. The intent is to reduce America’s dependence on foreign oil, improve the rural economy, curb greenhouse gas, and lower the prices of gas for consumers by using more biofuels.

In recent years, the EPA had undermined the intent of the RFS, choosing oil profits over farmers, by granting a record number of exemptions to the largest, wealthiest companies in the world. To date, EPA’s corrupt actions have caused an estimated loss of 4 billion gallons of biofuels and 1.4 billion bushels of corn demand. The White House plan will turnaround this trend and restore economic opportunity, consumer choice, and climate friendly policies.

Many details are left unknown, but we will continue to work through the regulatory process. The EPA will undergo a formal rulemaking, the same process that was used earlier this year for year-round E15. The ag and biofuels industries will be heavily involved making sure that the final regulations stay true to the President’s word and bring new opportunities to the Midwest and climate friendly solutions across the globe.

EPA Threatening RFS Goals, Creating Harm across Rural America

For the past few years, the EPA has been using the RFS to destroy demand for biofuels, reducing the price of commodities and gutting rural economies in the process. Throughout 2019, farmers saw farm debt increase and corn grind drop across the country. Biorefineries announced scaled back production, further impacting domestic markets for corn. In August, POET announced it would be forced to idle production at its Cloverdale biorefinery due to EPA mismanagement of the RFS, dropping over 30 million bushels of corn processing annually in Indiana. Like many other ethanol producers, POET reduced corn processing at half of its biorefineries, dropping processing of an additional 100 million bushels of corn across Iowa, Ohio, Michigan, Indiana, Minnesota, South Dakota, and Missouri. This action resulted in hundreds of direct and indirect jobs lost and hundreds of millions of economic activity wiped away, amplifying the economic downturn being seen across the Midwest.

EPA Issues Final E15 Rule

The U.S. Environmental Protection Agency (EPA) on Friday, May 31, issued a final rule to allow consumers uninterrupted access to E15, a fuel blend with 15 percent ethanol. The announcement comes following a public comment period on a proposed rule and in time for this summer’s driving season.

The EPA’s rule changes the nearly decade-old limitations on year-round E15, allowing consumers to have year-round access to the clean, lower-cost option at the pump. Previously, E15 sales were restricted in most markets from June 1 to Sept 15.

Thirty years ago, POET opened its doors as a means to lift one family farm out of the agriculture crisis. Today, we operate 30 biofuel facilities in eight states and support thousands of American jobs across the heartland. Every day, POET produces homegrown renewable energy – keeping our air cleaner and supporting our economy. We help drivers save the environment – while saving money at the fuel pump. POET is also committed to supporting public policies that reflect our passion for innovation and promote America’s continued growth as the world leader in biofuel production. Our mission is to build more sustainable world, from the ground up.

Resetting Renewable Fuel Standard Targets

The Clean Air Act grants the U.S. Environmental Protection Agency (EPA) authority to adjust volumetric targets for renewable fuels established by Congress under certain circumstances. The EPA is expected to use this authority to reset annual volumetric targets for 2020-2022.

As the recognized global leader in both starch-based and cellulosic biofuel production, POET remains committed to ensuring that any new volumetric targets proposed by the EPA serve to strengthen the Renewable Fuel Standard and continue to encourage future growth and investment in homegrown biofuels.

Expanding State Low Carbon Fuel Standards

In an effort to reduce lifecycle greenhouse gas emissions and improve air quality, a number of policymakers are working at the state level to enact or strengthen Low Carbon Fuel Standard (LCFS) programs. These programs are designed to encourage the use of cleaner fuels with lower carbon intensity.

At POET, our environmental mission is central to who we are and what we do. Cleaner-burning renewable biofuels, including mid-level blends like E15 and E30, are the best way for states to achieve their carbon reduction goals. POET continues to partner with policymakers across the U.S. to ensure that the many environmental benefits of biofuels are appropriately recognized and accurately measured in each state’s LCFS program.

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