The US Environmental Protection Agency (EPA) proposed the 2012 percentage standards for four fuel categories that are part of the agency’s Renewable Fuel Standard program (RFS2). The Energy Independence and Security Act of 2007 (EISA) established the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022.
To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner, importer, and non-oxygenate blender of gasoline or diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel. The proposed 2012 overall volumes and standards are:
- Biomass-based diesel (1.0 billion gallons; 0.91%)
- Advanced biofuels (2.0 billion gallons; 1.21%)
- Cellulosic biofuels (3.45 - 12.9 million gallons; 0.002 – 0.010%)
- Total renewable fuels (15.2 billion gallons; 9.21 percent)
Based on analysis of market availability, EPA is proposing a 2012 cellulosic volume that is significantly lower than the EISA target for 2012 of 500 million gallons. EPA will continue to evaluate the market as it works to finalize the cellulosic standard in the coming months. The agency says it remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.
There are a variety of potential fuel types that can qualify as biomass-based diesel, including biodiesel—the predominant type—and renewable diesel. EPA’s assessment focused primarily on biodiesel, although it also investigated potential volumes of renewable diesel.
Although it determined that volumes of biodiesel may fall short of 1.0 billion gallons, EPA also found that sufficient volumes of renewable diesel could be available to contribute to meeting the 1.0 bill gal requirement for biomass-based diesel.
Since renewable diesel can also be produced at existing refineries with little or no modification to processing equipment, we believe that 150 mill gallons of renewable diesel could be produced in 2012. Thus, we currently believe that the total production volume of both biodiesel and renewable diesel can reach 1.0 bill gal in 2012.
...we are not proposing to lower the biomass-based diesel standard of 1.0 billion gallon that is specified in the Act. Moreover, based on production capacity and availability of feedstocks, we believe that volumes of biomass-based diesel in excess of 1.0 bill gallons could be made available given sufficient market demand.—Proposed rule for 2012
In addition, for years after 2012, EPA must determine the applicable volume of biomass-based diesel at least 14 months prior to the year in which the volume will be required. Thus, for the 2013 compliance year, EPA must specify the applicable volume of biomass-based diesel by 1 November 2011.
Accordingly, EPA is proposing a volume requirement of 1.28 billion gallons for biomass-based diesel for 2013. EISA specifies a one billion gallon minimum volume requirement for that category for 2013 and beyond, but enables EPA to increase the volume requirement after consideration of a variety of environmental, market, and energy-related factors.
In the RFS2 final rule, EPA stated its intent to make two announcements each year:
Set the price for cellulosic biofuel waiver credits that will be made available to obligated parties in the event that we reduce the volume of cellulosic biofuel below the volume required by EISA.
Announce the results of our assessment of the aggregate compliance approach for verifying renewable biomass requirements for US crops and crop residue, and our conclusion regarding whether the aggregate compliance provision will continue to apply.
For both of these determinations, EPA will use specific sources of data and a methodology laid out in the RFS2 final rule. Since the necessary data for these determinations are not yet available, and the methodology for making them is specified by rule or statute, EPA did not include those in the proposed rule. Instead, it will present the results of both of these determinations in the final rule without a prior proposal.
Comments are due on or before 11 August 2011.