The US Environmental Protection Agency (EPA) has issued a Notice of Data Availability (NODA) to provide public notice and an opportunity to comment on potential reductions in the 2018 biomass-based diesel (BBD), advanced biofuel, and total renewable fuel volumes, and/or the 2019 biomass-based diesel volume under the Renewable Fuel Standard (RFS) program.
EPA is suggesting that it could reduce the biodiesel volume for 2018 by as much as 315 million gallons and effectively carry through those volumes to further reduce the proposed volumes of advanced and total renewable biofuels by 473 million gallons. This would reduce the 2018 advanced biofuel volume requirement from a proposed level of 4.24 billion gallons to 3.77 billion gallons, and the 2018 total renewable fuel volume requirement from 19.24 billion gallons to 18.77 billion gallons. The agency is seeking comments on this possible use of the waiver authority granted it for that purpose under the Clean Air Act.
The Notice of Data Availability presents historical data on imports of renewable fuel and several options for how the EPA may consider such data in establishing the final volume requirements using one or more of the waiver authorities provided by the statute.
In July, the EPA proposed certain reductions in the statutory volume targets for advanced biofuel and total renewable fuel for 2018, and requested comment on further reductions based on various considerations. EPA also sought comment on possible reductions to the proposed 2019 BBD volume requirement. (Earlier post.)
We note that the statute also provides the EPA the authority to waive a portion of the BBD standard if there is a significant renewable feedstock disruption of other market circumstance that would make the price of biomass-based diesel fuel increase significantly, and to make related reductions in the advanced biofuels and total renewable fuel requirements. In light of recent development, described below, we seek comment on whether it would be appropriate to use this waiver authority in the final rule.—EPA NODA
In the NODA, EPA said it remains concerned about the high cost of advanced biofuels. As a result, it said it believes it is appropriate to request further comment on appropriate ways to determine the applicable volume requirements for 2018, and the BBD volume requirement for 2019.
The Clean Air Act allows EPA to waive volumes specified in the act if (a) the implementation would harm the economy or a region or the US; or (b) there is in an inadequate domestic supply. The agency outlines arguments on both counts.
Biofuel trade associations reacted quickly. Growth Energy urged the administration to Follow through on support for the RFS.
For this Administration to begin taking steps backward after making so many declarations of support for renewable fuels is alarming, and our industry urges the EPA to move forward, not backward on the RFS. While these are significant reductions, they do not decrease the expected 15 billion gallons of conventional biofuel in the RVO; however, we have significant concerns that this action indicates that the EPA may backpedal on the promise and growth of the RFS.—Growth Energy CEO Emily Skor
The Renewable Fuels Association stated:
There is no rationale for further lowering either the 2018 advanced biofuel volume requirement or the total renewable fuel volume. As we outlined in our recent public comments to EPA on the proposed 2018 RVO, we see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver. It is also likely that using RFS waiver authorities in an attempt to limit exports would be perceived as a non-tariff trade barrier, which could run afoul of US obligations under World Trade Organization rules.
Additionally, there are a number of avenues outside of EPA’s jurisdiction and outside of the RFS to pursue recourse of biofuel trade barriers and international market distortions. Congress never intended for RFS waiver authorities to serve as tools for managing trade flows.—Renewable Fuels Association President and CEO Bob Dinneen