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Business

Donald Trump ignores biodiesel and the loyal voters behind it

The Midwest vote helped elect Trump, but his campaign promises to defend ethanol have fallen short. Farmers struggle to get by with declining crop sales and outpricing from larger oil firms and German biodiesel imports.

Yet that was not the story last year, when at an Iowa rally in June 2016, presidential candidate Donald Trump pledged to defend ethanol and, by extension, the American corn industry. Through his campaign tour in the Midwest, Trump repeatedly touted the integrity of biofuels from corn and soybeans.

His words proved effective when in the November election 95 percent of counties with ethanol plants voted for Trump as president.

Fast forward a few months, and his follow-through began to fall under scrutiny. With his usual flair for switching sides of an issue, voters became worried when American investor and business magnate Carl Icahn was named Trump's regulation advisor.

Icahn is the majority owner of CVR Energy, a refining company that would profit massively if Trump convinced the EPA to alter the requirements for producing biofuel. Meaning, if Trump went against his voter promises then he would save major refineries and hurt the small suppliers and the farmers behind corn.

Corn is a major industry within the US. In 2016 the corn crop value was $51.5 billion (42.9 billion euros), with around 90 million acres planted and harvested.

Read also: Biofuel — a resource of the future?

Directly supporting 86,000 jobs, the renewable fuel industry ties in with farming in leading the entire Midwest economy.  Over 40 percent of corn grown is used in ethanol, and ethanol accounts for over 90 percent of US biofuel production.

Yet Icahn and other large refineries wanted the responsibility of ethanol blending — the process of cutting petroleum with ethanol — shifted away from refineries and instead put on retailers further down the supply chain.

Make America grow again

Over the last 12 years the Renewable Fuel Standard (RFS) has been in effect, encouraged growth in the biofuel industry. The RFS aims to reduce the US emission of greenhouse gases and necessitates that fuel production for transportation include increasingly higher levels of renewable fuels. This has the dual benefit of decreasing harm on the environment while also reducing American oil dependency.

Yet the RFS is also the main crux of the issue between oil and corn interests since it is an RFS-determined credit program that dictates who in the supply chain is responsible for blending, a costly process that most small businesses cannot afford and many argue has no place in refineries regardless.

Flex fuel logo (Getty Images)

Flexible-fuel vehicles (FFVs) come with a combustion engine usually designed to run on gasoline and ethanol or methanol

The RFS also sets the standards that lead farm production, as its yearly goals dictate how much biofuel future petroleum production must include. The EPA's proposed cuts could signal a dreaded overhaul of the country's biofuels program and will endanger the farming and biofuels industry.

The National Corn Growers Association (NCGA) has been petitioning the EPA to continue increasing the levels of biofuel added to petroleum. In a letter to EPA administrator Scott Pruitt, the president of NCGA Wesley Spurlock said "In the 10 years since Congress expanded the RFS in 2007, corn farmers responded to the growing market for ethanol, increasing production efficiency to help meet the RFS goal[s]…," noting the current law directly supports agriculture and the agricultural lifestyle of the Midwest Corn Belt, which was the sector most loyal to Trump's campaign.

Read more: 'Biofuels a big cause of famine'

Environmentalists are also concerned. The President and CEO of the National Wildlife Federation said in a statement "[This] proposal underscores the need for the US Congress to take the bull by the horns and reform the Renewable Fuel Standard to protect our clean water, our public health, and our wildlife."

Are they still loyal to Trump?

Deliberation over Trump's resilience toward big business again came to a halt in July when Trump issued a proposal to cut biofuel requirements. It was thought the EPA would comply, but the question was laid aside when a US appeals court in Washington ruled that the EPA cannot cut quotes while citing inadequate domestic supply. This decision was a major blow to the interests of Icahn, who recently resigned as Trump's advisor and is currently under investigation for conflict of interest and the legality of his proposals while working for Trump.

Despite the squabble to control the EPA, corn is not out of the woods yet. The EPA proposed again in July 2017, without the direct influence of Trump, to lower biofuel requirements. Unfortunately for Trump, he may have already alienated this voter segment by siding with big money over the American working class, which he claims to value dearly. It remains to be seen how the contending desires of the oil and corn industries will play out with the current government, one that is fickle toward past promises and not always clear about intentions. One thing is certain, this will likely deal a blow to any future campaigning Trump may have in mind.

Watch video 06:37

The search for sustainable biodiesel

 

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