EPA Finalizes Regulations for Renewable Fuel Standard (RFS) Program
10 April 2007
The US Environmental Protection Agency (EPA) today established the regulations for the nation’s first comprehensive Renewable Fuel Standard (RFS) program. Authorized by the Energy Policy Act of 2005, the RFS program requires that the equivalent of at least 7.5 billion gallons of renewable fuel be blended into motor vehicle fuel sold in the US by 2012. (Earlier post.)
The RFS program requires major American refiners, blenders, and importers to use a minimum volume of renewable fuel each year between 2007 and 2012. The minimum level or “standard” which is determined as a percentage of the total volume of fuel a company produces or imports, will increase every year.
For 2007, 4.02% of all the fuel sold or dispensed to US motorists will have to come from renewable sources, roughly 4.7 billion gallons.
The RFS program is based on a trading system that provides a flexible means for industry to comply with the annual standard by allowing renewable fuels to be used where they are most economical. Various renewable fuels can be used to meet the requirements of the program. While the RFS program establishes that a minimum amount of renewable fuel be used in the United States, more fuel can be used if producers and blenders choose to do so.
Demand for fuel ethanol in the US in 2006 hit 5.38 billion gallons, exceeding the RFS target for 2007. Currently, 115 ethanol biorefineries nationwide have the capacity to produce 5.7 billion gallons annually. There are an additional 79 ethanol biorefineries and 7 expansions under construction with a combined annual capacity of more than 6 billion gallons, according to the Renewable Fuels Association.
The Administration has already proposed a follow-on to the RFS—the Alternative Fuel Standard (AFS)—that would require use of 35 billion gallons of renewable and alternative fuels in 2017—nearly five times the target of 2012.
The AFS proposal is designed to displace 15% of projected annual gasoline use in 2017 through the use of alternative fuels including corn ethanol, cellulosic ethanol, biodiesel, methanol, butanol, hydrogen, and others.
The AFS is one component of the Twenty in Ten plan (a 20% reduction of gasoline consumption in 10 years) proposed by President Bush earlier this year. The other 5% is to come from reforming and modernizing fuel economy standards for light duty vehicles. The Administration has proposed an increase of fuel economy standards of 4% per year through 2017.
While we must look at increasing the availability of renewable and alternative fuels, we must also continue to improve the fuel efficiency of our passenger cars and light trucks. As a part of the President’s “20 in 10” energy security plan, we need Congress to give the Secretary of Transportation the authority to reform the current passenger car fuel economy standard.—Nicole Nason, Administrator of the National Highway Traffic Safety Administration
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