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Iowa Farmers Blast Trump's Dealmaking After EPA Biofuel Plan

Michael Hirtzer and Jennifer A. Dlouhy

(Bloomberg) -- Iowa farmers slammed the Trump administration’s plan to alter biofuel-blending quotas, saying it would undermine demand for corn-based ethanol and soybean-based biodiesel.

Farmers speaking on a conference call said the Environmental Protection Agency’s plan unveiled Tuesday falls short in the way it changes targets for blending biofuel into petroleum-based fuels under the Renewable Fuel Standard.

The biofuel industry made a deal earlier this month with Donald Trump that would help it recover from the heavily criticized waivers that were issued to some oil refiners, but the EPA reneged on the arrangement, Monte Shaw, executive director of the Iowa Renewable Fuels Association, told reporters on the call Wednesday.

“When Donald Trump makes a deal, isn’t it a deal?” Shaw said.

Under Trump, the EPA has exempted more small oil refiners from requirements to blend biofuel. Ethanol and biodiesel producers say the waivers have further pressured prices, limited demand and helped prompt manufacturing plant closures, threatening jobs in Trump’s base of rural America.

In the EPA proposal, the agency would maintain its flexibility in setting specific annual blending targets that are largely sketched out by law. Biofuel advocates said the plan would would not totally offset the refinery exemptions.

“There’s nothing in here that will prevent more plants from closing,” Shaw said. He added that Trump can still make changes before the measure is finalized. “It replaces certainty with uncertainty. This is not what we agreed to.”

Oil industry leaders aren’t happy either. They have cast the proposal as a betrayal of Trump’s pledge to help U.S. manufacturing and threatened to challenge the measure in federal court. The proposal would effectively force bigger, non-exempted refineries to use more biofuel.

The EPA is collecting public comments on the plan. On Tuesday, ethanol futures had the biggest loss in two months on the announcement. Prices had climbed earlier this month amid speculation that the administration would come up with a policy that boosted the biofuel. The market extend losses on Wednesday.

“My personal perspective is that President Trump has lost support,” said Kelly Nieuwenhuis, president of the board for ethanol maker Siouxland Energy Cooperative in Sioux Center, Iowa. The Siouxland plant halted production in September.

To contact the reporters on this story: Michael Hirtzer in Chicago at mhirtzer@bloomberg.net;Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Millie Munshi, Patrick McKiernan

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