EPA ups renewable fuel levels, industry not satisfied
May 20, 2016
The Environmental Protection Agency today released increased volumetric requirements under the Renewable Fuel Standard for 2017 but the industry said the increases, while an improvement, were not high enough and the oil industry said Congress should repeal the RFS.
"These increases would boost production and provide for ambitious yet achievable growth," EPA said in a news release.
The proposed volume requirements and associated percentage standards for are for calendar year 2017 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel and biomass-based diesel for 2018.
The agency proposed a total renewable fuel volume of 18.8 billion gallons, of which 4 is advanced biofuel and 312 million gallons is cellulosic biofuel.
“EPA’s proposal makes abundantly clear that the only solution is for Congress to repeal or significantly reform the RFS.” Frank Macchiarola, downstream group director of the American Petroleum Institute
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Janet McCabe, acting assistant administrator for EPA's Office of Air and Radiation, said, "This administration is committed to keeping the RFS program on track, spurring continued growth in biofuel production and use, and achieving the climate and energy independence benefits that Congress envisioned from this program."
EPA said the proposed volumes would represent growth in the following ways:
▪ Total renewable fuel volumes would grow by nearly 700 million gallons between 2016 and 2017.
▪ Advanced renewable fuel — which requires 50 percent lifecycle carbon emissions reductions — would grow by nearly 400 million gallons between 2016 and 2017.
▪ The non-advanced or "conventional" fuels portion of total renewable fuels — which requires a minimum of 20 percent lifecycle carbon emissions reductions — would increase by 300 million gallons between 2016 and 2017 and achieve 99 percent of the congressional target of 15 billion gallons.
▪ Biomass-based biodiesel — which must achieve at least 50 percent lifecycle emissions reductions — would grow by 100 million gallons between 2017 and 2018.
▪ Cellulosic biofuel — which requires 60 percent lifecycle carbon emissions reductions — would grow by 82 million gallons, or 35 percent, between 2016 and 2017.
Growth Energy CEO Emily Skor noted that the conventional biofuel amount of 14.8 billion gallons is an increase from 14.5 billion gallons in 2016, but falls short of the RFS law as Congress wrote it.
"Growth Energy is reviewing this proposal and will actively encourage our members and consumers to engage throughout the public comment period," Skor said. "The administration invested $100 million in biofuels infrastructure this past year and we look forward to working with EPA and the administration to finalize a rule with higher renewable fuel levels to ensure an open and fair fuel marketplace."
Renewable Fuels Association President and CEO Bob Dinneen said, "The real frustration is that EPA seems to be artificially constraining this market."
"The RFA has demonstrated just how easy it would be for obligated parties to reach the 15 billion gallon statutory volume for conventional biofuels next year," Dinneen said. "The fact is with rising gasoline demand, increased E15 and E85 use made possible by USDA's infrastructure grant program, continued use of renewable diesel and conventional biodiesel that also generate D6 RINs (renewable identification numbers), well more than 15 billion gallons will be used next year."
"All of that is in addition to the 2 billion surplus RINs available to refiners due to EPA's tepid enforcement of the RFS in the past," he said.
Dinneen added, "EPA can be given credit for two things — getting the proposal out in a timely fashion and at least coming within a mere 200 million gallons of the statutory level of 15 billion gallons for conventional biofuels. As this process continues, we intend to work to encourage a final rule that truly puts the RFS 'back on track.'"
National Corn Growers Association President Chip Bowling, a Maryland farmer said, "EPA has moved in a better direction, but we are disappointed that they set the ethanol number below statute."
"In the past, the EPA has cited a lack of fuel infrastructure as one reason for failing to follow statute," Bowling said. "Our corn farmers and the ethanol industry have responded. Over the past year, we've invested millions of dollars along with the U.S. Department of Agriculture's Biofuel Infrastructure Partnership to accelerate public and private investment in new ethanol pumps and fuel infrastructure. The fact is, today's driver has more access than ever to renewable fuel choices."
American Soybean Association President Richard Wilkins said, "The EPA proposed rule misses an opportunity to build on the success and benefits of this growing renewable domestic biodiesel industry."
"While our differences with EPA regarding the appropriate biomass-based diesel volumes are relatively small, we are frustrated that the administration does not embrace the many benefits this industry provides and take better advantage of these opportunities."
National Farmers Union President Roger Johnson said, "I'm deeply disappointed to see the EPA undermine the RFS once again by falling significantly short of the statute with their proposed volume obligations."
"This simply does not track with other admirable, important advances on climate this administration has made. The oil companies have had plenty of time to build out the distribution infrastructure to deliver more biofuels to the consumer and commercial markets that seek this environmentally-friendly energy source. They have simply refused to do so, and EPA's negligence in adhering to the statutory levels has significantly undermined the plan laid out by Congress in 2007."
National Biodiesel Board Vice President for Federal Affairs Anne Steckel urged EPA to raise the biodiesel volumetric requirement in the final rule.
Of the proposal for 2.1 billion gallons of biomass-based biodiesel in 2018, Steckel said, "We have plenty of feedstock and production capacity to exceed 2.5 billion gallons today, and can certainly do so in 2018."
"We have made tremendous progress in cleaning up vehicle emissions but the fact remains that petroleum still accounts for about 90 percent of our transportation fuel," Steckel said.
"This is dangerous and unsustainable, and the RFS is the most effective policy we have for changing it," she said. "On the heels of the Paris climate accord, this is not the time for a piecemeal approach. We need bold action."
In addition to calling for a higher biomass-based diesel volume, NBB is advocating a stronger overall advanced biofuel volume.
Advanced Biofuels Business Council executive director Brooke Coleman said the 2017 proposal "fails to correct regulatory missteps when it comes [to] how the blending requirements are derived from year-to-year and to what degree implementation of the RFS hinges upon the oil industry's willingness to secure and distribute low carbon biofuels when they are available."
Frank Macchiarola, the downstream group director of the American Petroleum Institute, said the 2017 mandates show that "EPA is pushing consumers to use high ethanol blends they don't want and that are not compatible with most cars on the road today. The administration is potentially putting the safety of American consumers, their vehicles and our economy at risk."
API is urging EPA to set the final ethanol mandate at no more than 9.7 percent of gasoline demand to help avoid the 10 percent ethanol blend wall and meet strong consumer demand for ethanol-free gasoline, Macchiarola said.
"EPA's proposal makes abundantly clear that the only solution is for Congress to repeal or significantly reform the RFS," Macchiarola added. "Members on both sides of the aisle agree this program is a failure, and we are stepping up our call for Congress to act."
ActionAid USA, a group that has opposed renewable fuels for years, said, "Today's announcement confirms that the RFS is broken. We're using more and more biofuels made from food crops to fill our gas tanks, as the cellulosic biofuels this mandate was supposed to promote have failed to appear."
"Biofuels made from food are bad for people and the planet," ActionAid said. "At a time when serious and dramatic emissions cuts are needed, continuing a policy that takes food away from hungry people to fuel our cars and trucks makes no sense. We can't continue with this broken policy — the RFS needs urgent reform."
–the Hagstrom Report