EPA Proposes Renewable Fuel Volume Obligations for 2018

WASHINGTON, D.C. — The U.S. Environmental Protection Agency (EPA) has signed a proposed rule setting the minimum amount of renewable fuels that must be supplied to the market in calendar year 2018 under the Renewable Fuel Standards (RFS) program. 

The July 5 action proposes volume requirements and associated percentage standards that maintain renewable fuel volumes at levels comparable to the 2017 standards, recognizing limits to the growth of cellulosic and advanced biofuels, according to the federal agency.

The EPA said it is committed to successfully administering the RFS consistent with the direction entrusted to the agency by Congress and is on track to meet the Nov. 30, statutory deadline to make the proposed Renewable Volume Obligations (RVOs) final. 

The volumes proposed this week are based on requirements under the law and an analysis of current market dynamics, including energy demand, biofuel production and market constraints.

"Increased fuel security is an important component of the path toward American energy dominance," said EPA Administrator Scott Pruitt. "We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace. 

"Timely implementation provides certainty to American refiners, the agriculture community and broader fuels industry, all of which play an important role in the RFS program," he added.

Key elements of the EPA's latest move include:

• Non-advanced or "conventional" renewable fuel volumes are maintained at the 15-billion-gallon target set by Congress.
• The biomass-based diesel standard for 2019 would be maintained at the 2018 levels of 2.1 billion gallons.
• EPA is beginning technical analysis that will inform a future rule to reset the statutory volumes for cellulosic, advanced, and total biofuels. The law requires this reset when certain conditions are met.

For more on the EPA's proposal, click here.

INDUSTRY REACTION

"The release of the proposed RVOs is the first real test of the current administration's pledged support for renewable fuels, and we are encouraged to see the EPA demonstrate President Trump's continued commitment to the Renewable Fuel Standard," said Growth Energy CEO Emily Skor.

"Information from the Department of Energy, as well as from the numerous retailers across the country selling higher biofuel blends, confirm what we've known for years — there is no 'blend wall.' More and more of America's drivers are choosing higher biofuel blends, like E15, and fulfilling the promise of the RFS," she added.

As Skor explained, Growth Energy is "pleased" with the EPA and administration's commitment to a 15-billion-gallon target for conventional biofuels, but it would like to see final levels for cellulosic and advanced biofuels continue to give producers and stakeholders certainty in their investment in second generation technology. 

"The RFS is a great American success story: It has helped provide consumers with real choice and savings at the pump, while also strengthening our economy, delivering greater energy independence, and improving our environment," Skor said.

The Iowa Renewable Fuels Association (IRFA) pointed out President Trump's administration fulfilled a campaign promise by leaving the conventional fuel level — for which corn starch ethanol qualifies — at its 15-billion-gallon cap.

However, the proposed 2019 biodiesel level is 2.1 billion gallons, far below the industry request of 2.75 billion gallons.

"IRFA applauds President Trump for keeping his campaign promise with this proposal to uphold the [RFS] for ethanol. Maintaining the 15-billion-gallon conventional biofuels level is good news for E15, motorists and farmers. This proposal would keep the RFS on track and provide regulatory stability for ethanol producers, retailers, and obligated parties alike," said Iowa Renewable Fuels Association Executive Director Monte Shaw.

"Unfortunately, a change in administrations did not change the EPA's under appreciation for the potential of U.S. biodiesel production. Keeping biodiesel levels frozen at 2.1 billion falls short of U.S. industry capabilities, even before imports are considered," Shaw added.

The National Biodiesel Board (NBB) added the proposed volume requirements for advanced biofuels fail to recognize the continued growth of industry.

"This proposal continues to underestimate the ability of the biomass-based diesel industry to meet the volumes of the RFS program," the NBB said in a statement. "This is a missed opportunity for biodiesel, which reduces costs, provides economic benefits and results in lower prices at the pump. Higher advanced-biofuel and biomass-based diesel volumes will support additional jobs and investment in both rural economies and clean-energy-conscious communities."

The board said it will continue to work with the EPA and ensure the administration doesn't turn its back on our domestic energy producers.

"The EPA should be committed to diversifying the diesel fuel market and prioritizing advanced biofuels targets like this ignore reality and the law, inhibiting growth in the industry," said Anne Steckel, vice president of federal affairs at the NBB.