The US Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a proposed rule under the Renewable Fuel Standards (RFS) program that would set the minimum amount of renewable fuels that must be supplied to the market in calendar year 2019, as well as the biomass based diesel volume standard for calendar year 2020.
Today, nearly all gasoline used for transportation purposes contains 10 percent ethanol (E10), and on average diesel fuel contains nearly 5 percent biodiesel and/or renewable diesel. However, the market has fallen well short of the statutory volumes for cellulosic biofuel, resulting in shortfalls in the advanced biofuel and total renewable fuel volumes. In this action, we are proposing a volume requirement for cellulosic biofuel at the level we project to be available for 2019, along with an associated applicable percentage standard.
For advanced biofuel and total renewable fuel, we are proposing reductions under the “cellulosic waiver authority” that would result in advanced biofuel and total renewable fuel volume requirements that are lower than the statutory targets by the same magnitude as the reduction in the cellulosic biofuel reduction. This would effectively maintain the implied statutory volumes for non-cellulosic advanced biofuel and conventional biofuel.—Proposed rule
Proposed and Final Renewable Fuel Volume Requirements for 2018-2020
Some key elements of today’s action:
“Conventional” renewable fuel volumes, primarily met by corn ethanol, would be maintained at the implied 15-billion gallon target set by Congress for 2019.
The advanced biofuel standard for 2019 would be increased by almost 600 million gallons—up 13.8%—over the 2018 standard.
The cellulosic biofuel standard for 2019 would be increased by almost 100 million gallons—up 32.3%—over the 2018 standard.
The biomass-based diesel standard for 2020 would be increased by 330 million gallons—up 15.8%—as compared to the standard for 2019. The biomass-based diesel standard for 2019 was set at 2.1 billion gallons in 2018 and cannot be changed.
EPA is also taking comment on ways to improve market transparency, including by limiting who can participate in the Renewable Identification Number (RIN) market and the length of time a RIN can be held.
Reactions. The Iowa Corn Growers Association was displeased with the retention of the proposed Renewable Volume Obligations (RVO) for the 2019 conventional biofuels requirement at the statutory level of 15 billion gallons under the Renewable Fuel Standard (RFS). By doing so, the ICGA argued, the EPA failed to reallocate the gallons of ethanol exempted through the small refinery process.
EPA Administrator Scott Pruitt has handed out an unprecedented number of exemptions to small refineries across the country, effectively destroying more than 1.5 billion gallons of ethanol demand and slashing market access for America’s corn farmers, ICGA said.
The National Council of Chain Restaurants said increased biofuel levels for 2019 proposed by the Environmental Protection Agency are too high and called on Congress to reduce or repeal the ethanol mandate established under the federal Renewable Fuel Standard program.
Brent Erickson, Executive Vice President of the Biotechnology Innovation Organization’s (BIO) Industrial & Environmental Section welcomed EPA’s decision to raise the advanced and cellulosic biofuel volumes, but said the 2019 volumes should be higher, to correct from last year and also spur growth for the coming year. BIO would like the reallocation of gallons displaced from the small refinery waivers to go to advanced biofuels.
EPA’s decision to forgo reallocation of gallons displaced from small refinery waivers at the behest of the petroleum industry is disappointing. In order to ensure a favorable and supportive investment climate for advanced and cellulosic biofuel producers, EPA must reallocate the gallons from the small refinery waivers already issued and into the future.
Finally, the Agency must do more to approve new advanced and cellulosic biofuel technologies and production facilities, such as those that use corn kernel fiber as a feedstock, to adequately account for the potential of new technologies as it sets the final 2019 volumes.—Brent Erickson