Fischer Slams Administration’s Incentive For Foreign Biofuels, Hindering American Grown Energy

"I Would Hope that the Biden Administration Would Not Have Knowingly Released an Updated Model that Favors Foreign Feedstocks by Imposing Barriers for U.S. Biofuels."

WASHINGTON - At an Appropriations Committee Hearing today, U.S. Senator Deb Fischer (R-Neb.) questioned Environmental Protection Agency (EPA) Administrator Michael Regan about the negative impacts of the administration's newly-released GREET model and the Clean Power Rule.

During her remarks, Senator Fischer criticized the updated GREET model's support for foreign grown feedstocks for biofuel production, like Brazilian sugarcane ethanol, while ignoring the sustainable, home-grown biofuels produced in the United States. Senator Fischer pressed Secretary Regan about ensuring that the updated model does not put Nebraska's corn and soybean farmers or biofuel producers at a disadvantage from accessing this market.

Senator Fischer also highlighted stakeholder concerns with the EPA's new power plant regulations and asked Secretary Regan how the administration came to its proposed regulation given the lack of stakeholder support. Senator Fischer stated that Nebraska stakeholders have expressed concern that EPA's rule jeopardizes affordability and reliability by foreseeing the premature closure of coal powered plants.

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On the Potential Biofuel SAF Market:
Senator Fischer: Biofuels are a great market for Nebraska's farmers, and it provides clean burning and cheaper fuel for American families. Sustainable Aviation Fuel is another important potential market for Nebraska's biofuels. Secretary Vilsack has encouraged the biofuels industry to lean into that SAF market, saying to a group last year, "I want you all to understand this is a critical moment, a make-or-break moment. And, if it's not seized and not taken full advantage of, you may have a different conversation years from now."
On the Administration's Support of Foreign Biofuels Ahead of U.S. Producers:
Senator Fischer: Well, yesterday an interagency task force, which included your agency, released an updated GREET Model to determine the carbon intensity of fuels for the credit. And I'm still reviewing the updated model that you send out, but it seems to mandate a set of conservation practices that corn and soybean farmers must do in order for the SAF to qualify for the tax credit. Additionally, with this updated modeling, corn and soy-based biofuels, even if they complete the additional conservation practices, would still be deemed more carbon intensive than Brazilian sugarcane ethanol. My concern is that this is going to lead to taxpayer dollars incentivizing imports of foreign fuel. So, Administrator, I would hope that the Biden administration would not have knowingly released an updated model that favors foreign feedstocks by imposing barriers for U.S. biofuels to qualify for that SAF tax credit. Is it your belief that the U.S. produced biofuels are less sustainable than foreign feedstocks, like Brazilian ethanol as the updated model seems to indicate?
Administrator Regan: What I would say is that, number one, I agree wholeheartedly with Secretary Vilsack that this is a great moment in time. And I believe that SAFs have a great opportunity here. Our role in the interagency, focused on updating the GREET Model was to ensure that we gave all farmers options to comply with the Clean Air Act. So, what I think you'll see with this updated model, and what I've heard farmers say, is that there's more flexibility in how this model is going to determine the outputs to ensure compliance with the Clean Air Act. I think the design of conservation programs and tax policy - well, those questions are probably better steered to USDA or Treasury. I'm not an architect of how those programs work. And I tell you that my focus was to ensure that we put a product across the finish line that gave farmers maximum flexibility and options for Clean Air Act compliance.
On the Shortcomings of the Administration's Latest GREET Model:Senator Fischer: I think you're going to be hearing from corn producers all across the country and especially in Nebraska. The requirements we see on this updated model that came out from you folks, it really has rather stringent requirements that have to be met. And it's a number of requirements that have to be met. And, as I said earlier, you know, the Brazilian sugarcane ethanol is going to qualify for taxpayer dollars, United States taxpayer dollars. What I'm hearing from my producers is, they're not going to be able to meet this new model that came out. Do you think maybe you need to relook at what that model is doing
Administrator Regan: You know, I think what we should probably do is have our staffs compare notes. That's not what I'm hearing. I'm hearing that we have produced a product that allows for our farmers to compete in a global market, as we look at filling this SAF gap. So, I'd love for our teams to kind of talk a little bit about that.
Senator Fischer: Oh, I would, too, because the air fuel that Secretary Vilsack was very excited about and looked at as another avenue to really help farmers, ag producers, be able to open up another market for them, that was a very positive step. And we feel now that we're going backwards. We're going the other way. So, I look forward to having a continued conversation with you on that.
On the Administration's Unrealistic and Unachievable Power Plant Rule:Senator Fischer: I've also heard from numerous public power districts and electric co-ops about the regulations you released last week on power plants. In Nebraska, we're a total public power state. And we're seeing a dramatic increase in electric demand because of increased economic development, which is a good thing. We like to see that. And the public power districts and our electric co-ops, they've expressed concern that EPA's rule jeopardizes affordability and reliability by foreseeing the premature closure of coal powered plants. And you've been quoted as saying, the EPA knows the potential of this industry power generators. And we've been talking to this industry. They provided us comments over the past two years, formally and informally. We believe that we have those interests baked in." Yet, the National Rural Electric Cooperatives Association stated, "The path outlined by the EPA is unlawful, unrealistic, and unachievable. It undermines electric reliability and poses grave consequences for an already stressed electric grid." So, how do you square your comments that rural electric interests are baked in with the rural electric industry, describing the rule as unlawful, unrealistic, and unachievable?
Administrator Regan: Yeah, I feel that it's unfortunate that it's described that way. I would say that when you look at what we proposed, the enormous amount of comments that we accept it, from EEI and from rural electric cooperatives. I think that the rule gravitated towards a level of flexibility and expansion that took a lot of what they said very seriously. And so, I believe that not only did we listen, but we produced a lawful rule. I'm sure that the courts and others will decide. But, when you look at the work that we've done with DOE and FERC and those who specialize in grid reliability, this meets the mark. We understand that there will not be jeopardy and reliability based on this rule. And, when we did the cost analysis, we looked at a potential increase in costs of between zero and 1%. And so I feel very good about the rule that we proposed. And we'll look forward to the implementation processes and working with the states to be sure that the flexibilities that we believe are there are actually built in.
Senator Fischer: With all due respect, I would say our Nebraska Public Power Districts and co-ops - again, public power - they're opposed to the regulations because they do believe it's going to really hurt our affordable electric generation.