The Importance of the RFS

As president and CEO of Petroleum Marketers and Convenience Stores of Iowa (PMCI), Dawn Carlson works in the heart of biofuels country. That gives her a good perspective on a topic of high interest to petroleum marketer associations nationwide: The Renewable Fuel Standard.

Carlson frequently talks with officials at PMAA and other state associations about the importance of the RFS, which is a federal program requiring that a certain volume of renewable fuels be used in place of petroleum. She spoke with REG about the topic, including how biodiesel has benefited fuel marketers and retailers. 

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What impact does the RFS have on petroleum marketers and retailers? 

PMCI values fuel choice, fuel quality, fair competition, consumer and environmental protection, and innovation. The RFS has been an innovative approach to expanding homegrown biofuels, and we believe it has had a positive impact on fuel marketers and retailers in Iowa and nationwide. There is a cost to complying with the RFS, and the value of RINs has helped marketers recoup those costs and continue their support for homegrown biofuels. Fuel marketers in Iowa were among the first to invest in biofuels manufacturing (ethanol production). Their support for biofuels and the RFS continues to be strong as evidenced by the number of marketers offering biofuels and participating in RINAlliance.

 

What would you tell fuel marketers and retailers in other states who may not currently see the value of the RFS?

The fuel marketing industry is extremely competitive. Successful marketers are constantly looking for opportunities to set themselves apart from their competition. Marketers that we work with nationwide see the RFS as a valuable tool to distinguish themselves from their competition and carve out new profit opportunities. There is indeed opportunity for marketers of all sizes to participate successfully, negotiate opportunities to blend and achieve a healthy return.

 

What do you say to your members and to petroleum marketer associations in other states about the role biodiesel plays in the program?

PMCI is often asked to advise others on biodiesel marketing and opportunities. We have great examples to share on state policies and incentives that support biodiesel growth and on the quality of products offered. For example, we have a fuel quality testing program unique to Iowa that we advocated for to ensure that pipelines and producers are transparent about the quality of the product offered to marketers. Biodiesel quality, consistency, availability and price competitiveness are critical factors in the success of the program. The biodiesel RINs are also a key factor in the success of the RFS, given the so-called blend wall for ethanol. Biodiesel bridges that compliance gap. Biodiesel provides an opportunity for marketers to reap the benefits of RINs through the RFS, something they cannot always do with ethanol that may be offered from their suppliers only as a pre-blended product.

 

How is biodiesel good for marketers and retailers?

Biodiesel is good for marketers, retailers and consumers throughout the U.S.! Marketers and retailers are benefitting by state and federal policies that help incentivize the sale and infrastructure to offer biodiesel year-round. Beyond the policy incentives and lubricity improvements, it is good to buy local and support homegrown biofuels. Soybean growers have benefitted from the biodiesel industry by an average of 63 cents per bushel, according to a study prepared for the National Biodiesel Board. PMCI believes that biofuels have a great future, and we look for opportunities to expand biofuel sales.

 

What are some misconceptions you hear about the RFS program?

The talk in Washington D.C. has been about the cost of compliance for refiners. When the RFS rules were developed, there was a misconception about the stakeholders. Few realized the volume of blending that occurs downstream, so the original rules were developed to pertain to refiners and biofuel producers. RINAlliance was organized in response to the needs of downstream blenders. As for any misconceptions about fuel quality, that is why we have quality specifications such as ASTM standards.

 

More about Dawn

Dawn Carlson, CAE, is president and CEO of PMCI, a non-profit trade association representing fuel marketers and convenience stores in Iowa. She also serves as president and CEO of RINAlliance, which provides RFS compliance and RIN brokering services to renewable fuel blenders across the U.S. Ms. Carlson grew up in central Iowa raising pork, corn and soybeans. She continues to be involved managing the family farm and is a strong advocate for biodiesel, serving on the Iowa Biodiesel Board of Directors.

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