By Keith Reid
Not known recently for being timely with such announcements, on November 23 EPA finalized the volume requirements and associated percentage standards that apply under the Renewable Fuel Standard (RFS) program in calendar year 2017 for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. EPA also finalized the volume requirement for biomass-based diesel for 2018.
As the agency noted, “The final volumes represent continued growth over historic levels. The final standards meet or exceed the volume targets specified by Congress for total renewable fuel, biomass-based diesel and advanced biofuel.”
This is a notable turnaround by an EPA that previously focused on blend wall concerns (the ability to blend ethanol in gasoline at levels no more than 10%, which is the most universally acceptable level where automobiles and fueling infrastructure warranties are concerned).
As the announcement noted:
- Total renewable fuel volumes grow by 1.2 billion gallons from 2016 – 2017, a 6% increase.
- Advanced renewable fuel, which requires 50% lifecycle carbon emissions reductions, grows by roughly 700 million gallons between 2016 – 2017.
- Non-advanced or “conventional” renewable fuel increases in 2017 meet the 15 billion gallon congressional target for conventional fuels.
- The standard for biomass-based biodiesel, which must achieve at least 50% lifecycle greenhouse gas emission reductions compared to petroleum-based diesel, grows by 100 million gallons. The required volume of biomass-based diesel for 2017 is twice as high as the minimum congressional target.
- Cellulosic biofuel, which must achieve at least 60% lifecycle greenhouse gas emissions reductions, grows by 35% over the 2016 standard.
- The advanced biofuel standard, which is comprised of biomass-based diesel, cellulosic biofuel and other biofuel that achieves at least 50% lifecycle greenhouse gas emissions reductions, increases by 19% over the 2016 standard.
Source: EPA
One rationale being floated for the fairly significant increases has been an anticipated increase in motor fuel demand to absorb the extra biofuels. Time will tell, and if demand comes up short, any blend wall impacts should be readily observable.
With Donald Trump winning the presidency, there has also been a flood of last-minute regulation in areas seen as being not as secure under the new administration, and coming from the range of Washington agencies. Trump has previously shown support for ethanol, while not supporting much of the Obama administration’s EPA efforts relative to carbon mitigation. It will be instructive to see how that support pans out now that campaign season has passed.
Industry feedback following the announcement has offered few surprises.
Renewable Fuels Association (RFA) President and CEO Bob Dinneen released the following statement: “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 final Renewable Volume Obligations (RVO) rule helps put consumers in the driver’s seat when it comes to fuel choice at the pump, and we thank EPA for listening to the public’s demand for lower cost, higher octane fuels, recognizing the rising demand for gasoline and abiding by the statute. We look forward to getting the RFS back on track, providing the consumer savings, carbon reductions and energy security benefits envisioned by Congress.”
API Downstream Group Director Frank Macchiarola said, “We are disappointed that EPA has taken a step backwards with this final rule. 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.”
