By Keith Reid

On July 5 U.S. Environmental Protection Agency Administrator Andrew Wheeler issued the proposed 2020 Renewable Volume Obligations. The RVOs are a crucial component of the Renewable Fuel Standards in that they set the minimum amount of renewable fuels that must be supplied to the market in any given year.

Wheeler noted with the announcement: “Unlike the previous administration, we have consistently issued the annual renewable volume obligations rule on time, which is critically important to America’s farmers and all stakeholders impacted by the Renewable Fuel Standard program. We are on track to meet the deadline on time for the third year in a row and continue to provide greater regulatory certainty to farmers and refiners across the country.”

EPA highlighted key elements of proposal:

  • “Conventional” renewable fuel volumes, primarily met by corn ethanol, would be maintained at the implied 15-billion gallon target set by Congress.
  • EPA is proposing an advanced biofuel volume requirement for 2020 of 5.04 billion gallons, which is 0.12 billion gallons higher than the advanced biofuel volume requirement for 2019.
  • The cellulosic biofuel volume requirement of 0.54 billion ethanol-equivalent gallons for 2020 is based on our production projection which is 0.12 billion ethanol-equivalent gallons higher than the cellulosic biofuel volume finalized for 2019.
  • EPA is proposing to maintain the biomass-based diesel (BBD) volume for 2021 at 2.43 billion gallons.

The Proposed and Final Renewable Fuel Volume Requirements for 2019-2021

Proposed and Final Renewable Fuel Volume Requirements for 2019-2021

2019

2020 Statutory Volumes

2020 Proposed Volumes

2021 Proposed Volumes

Cellulosic biofuel (billion gallons)

0.42

10.50

0.54

n/a

Biomass-based diesel (billion gallons)

2.1

≥1.0

N/A

2.43

Advanced biofuel (billion gallons)

4.92

15.00

5.04

n/a

Renewable fuel (billion gallons)

19.92

30.00

20.04

n/a

All values are ethanol-equivalent on an energy content basis, except for BBD which is biodiesel-equivalent.

 

As is typically the case, the RVO proposals generated significant pushback from both sides of the industry. The biofuels side wants higher RVO obligations and action on small refinery exemptions:

  • “As long as EPA continues to dole out compliance exemptions to oil refiners without reallocating the lost volume, the agency may as well start referring to the annual RFS levels as ‘renewable volume suggestions’ rather than ‘renewable volume obligations,’” said Geoff Cooper, RFA’s President and CEO.  “It is a complete misnomer to call these blending volumes ‘obligations’ when EPA’s small refinery bailouts have essentially transformed the RFS into a voluntary program for nearly one-third of the nation’s oil refineries. Congress gave EPA the direction and tools necessary to ensure that the statutory RFS volumes are enforced, and that includes prospectively reallocating exempted volumes to non-exempt parties. Instead, EPA has chosen to continue its demand destruction campaign that has been crippling to both ethanol producers and the farmers who supply our industry. Enough is enough.”
  • “It’s unconscionable that EPA continues to undermine the president’s commitment to a strong rural America,” said Growth Energy CEO Emily Skor. “The 2020 RVOs are a drop in the bucket compared to the demand lost due to a flood of refinery exemptions. Unless EPA restores demand destroyed through secret handouts to oil giants like Exxon and Chevron, these targets offer nothing but another year of lost opportunity and rural hardship. Making matters worse, EPA chose to flout the 2017 court ruling requiring the agency to revisit 500 million gallons of biofuel that were inappropriately waived. Today’s proposal is a slap in the face to the farmers dealing with the toughest years on record.”
  • “While EPA says it is proposing to maintain the 15-billion-gallon conventional biofuel blending target for 2020, refinery exemptions without reallocation of waived volumes have effectively reduced the RFS by more than 2 billion gallons below statutory volumes. President Trump asked EPA to remedy this issue following his trip to Iowa a few weeks ago and this proposal is a missed opportunity to reallocate the 2.61 billion gallons waived through Small Refinery Exemptions (SREs). It’s also a missed opportunity to restore the 500-million-gallon shortfall the D.C. Circuit Court ordered EPA to handle following the Americans for Clean Energy et al v. EPA lawsuit, which recently resigned EPA Assistant Administrator for Air and Radiation William Wehrum told ACE members EPA intended to address in the 2020 proposed rule at our D.C. fly-in in April.”

Surprisingly, there was no response from American Petroleum Institute.  The typical opinion would be reiterating its desire to see the RFS sunset.

 

For more information on today’s announcement, go to: https://www.epa.gov/renewable-fuel-standard-program/proposed-volume-standards-2020-and-biomass-based-diesel-volume-2021