EPA updating requirements for RFS
Nov. 30, 2016
by Jay Sjerven
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Total renewable fuel volume requirement set at 19.28 billion gallons, up 480 million gallons from the May proposal.
WASHINGTON — The US Environmental Protection Agency on Nov. 23 announced its finalized volume requirements that apply under the Renewable Fuel Standard Program (RFS) for calendar year 2017 for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. The EPA also finalized the volume requirement for biomass-based diesel for 2018. The EPA noted the finalized standards meet or exceed the volume targets specified by Congress for total renewable fuel, biomass-based diesel and advanced biofuel. The finalized volume requirements for advanced biofuel and total renewable fuel also were higher than those proposed by the EPA in May.
The EPA set the total renewable fuel volume requirement at 19.28 billion gallons, up 480 million gallons from the May proposal and up 1.17 billion gallons, or 6 percent, from 18.11 billion gallons in 2016. Of the renewable fuel requirement, 4.28 billion gallons were earmarked for advanced biofuel and 15 billion gallons will comprise “conventional” renewable fuel, primarily corn-based ethanol. Under the May proposal, the ethanol volume requirement would have been 200 million gallons lower at 14.8 billion gallons.
The EPA left unchanged from May its volume requirements for biomass-based diesel in 2017 and 2018 at 2 billion gallons and 2.1 billion gallons, respectively. No other 2018 volume requirements were included in the Nov. 23 announcement.
When the EPA issued its proposed volume requirements for renewable fuel for public comment last May, several commodity organizations and farm state members of Congress asserted the EPA should raise its requirement for total renewable fuel to meet the target set in legislation. In previous years, the EPA had used waiver authority allowed it under the RFS Program to issue volume requirements below those targeted by Congress based on findings of “inadequate domestic supply.”
In its Nov. 23 final rule, though, the EPA said, “A careful review of the comments we received in response to the May 31, 2016, Notice of Proposed Rulemaking and other information that has become available since May has led us to conclude that volume reductions for 2017 need not be as great as we had proposed. In light of the lower reductions necessary, in this final rule, we rely exclusively on the cellulosic waiver authority to provide reductions in both advanced biofuel and total renewable fuel volumes. That is, we have determined it is not necessary to provide an additional increment of volume reduction for total renewable fuels through use of the general waiver authority based on a finding of inadequate domestic supply, as we had done in the final rule establishing annual standards for 2014-16 and as we also proposed to do in establishing standards for 2017.”
Senator Chuck Grassley of Iowa said in response to the EPA’s notice, “This announcement is good news for Iowa, and in particular corn ethanol producers. While more work needs to be done to increase levels for biodiesel, this is the first time that the EPA has reached the statutory level for traditional corn ethanol. This achievement marks significant progress for renewable energy and is a tribute to Iowa's clean energy leadership.”
His view was echoed across the aisle.
“Today, I am pleased that the EPA has gotten the RFS back on schedule and released more robust, final volume obligations for 2017,” said Representative Collin Peterson of Minnesota, ranking member on the House Committee on Agriculture. “I have advocated continuously for a strong RFS and for EPA to match congressional intent. This is an important step toward strengthening confidence in the biofuels industry and maintaining a strong rural economy.”
Bob Dinneen, president and CEO of the Renewable Fuels Association, said, “We can all be thankful EPA has raised the conventional biofuel requirement to the 15-billion-gallon level required by the statute. The move will send a positive signal to investors, rippling throughout our economy and environment. By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels, drive investment in infrastructure to accommodate E15 and higher ethanol blends, and make a further dent in reducing greenhouse gas emissions.”
The American Soybean Association applauded the EPA for increasing the RFS for advanced biofuels but was disappointed the agency did not raise the volume requirement for 2018 specifically relating to biomass-based diesel.
“The levels announced today provide opportunities but also do not take full advantage of an opportunity to further promote a viable, domestically produced renewable fuel industry that is US biodiesel,” said Richard Wilkins, ASA president and soybean farmer from Greenwood, Delaware. “EPA will raise the overall volumes relative to the proposed rule and increase the total advanced biofuels volume requirements for 2017 from 4 billion gallons to 4.28 billion, an increase of 19 percent. That’s a plus for biodiesel as the primary source of advanced biofuels.”
Wilkins noted, however, that the EPA chose not to raise the biomass-based diesel volume requirement within the advanced biofuel pool for 2018.
“When EPA issued its proposed rule, ASA clearly stated that the 2.1-billion-gallon mark did not adequately capture the capacity of the biodiesel industry,” Wilkins said. “To see the volume remain at 2.1 billion gallons as they were in the proposed rule is frustrating. We know we can do more.”
The American Petroleum Institute voiced its displeasure with the EPA announcement.
“We are disappointed that EPA has taken a step backwards with this final rule,” said Frank Macchiarola, API’s downstream group director. “The RFS mandate is a bad deal for the American consumer. Today’s announcement only serves to reinforce the need for Congress to repeal or significantly reform the RFS Democrats and Republicans agree this program is a failure.”