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EPA proposes higher RFS biofuel volumes for 2022

The US Environmental Protection Agency (EPA) proposed a package of actions setting biofuel volumes for the Renewable Fuel Standard (RFS) program for years 2020, 2021, and 2022, and introducing regulatory changes intended to enhance the program’s objectives.

For 2022, EPA is proposing the highest total volumes yet; the proposed volumes for 2022 are more than 3.5 billion gallons higher than the volume of renewable fuel used in 2020. The proposed volume of advanced biofuel for 2022 is more than 1 billion gallons greater than the volume used in 2020.

Proposed Volume Requirements for 2020-2022 (billion gallons)*

  2020 2021 2022
Cellulosic Biofuel 0.51 0.62 0.77
Biomass-Based Diesel 2.43** 2.43** 2.76
Advanced Biofuel 4.63 5.20 5.77
Total Renewable Fuel 17.13 18.52 20.77
Supplemental Standard n/a n/a 0.25
*All values are ethanol-equivalent on an energy consult basis, except for biomass-based diesel (BBD), which is biodiesel-equivalent.
**The 2020 and 2021 BBD volumes were established in previous RFS annual rulemakings.

EPA also proposed to add a 250-million-gallon “supplemental obligation” to the volumes proposed for 2022 and stated its intent to add another 250 million gallons in 2023. This would address the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA.

EPA also estimated the constituent mix of renewable fuel types and feedstocks that could be used to meet the proposed volume requirements in each major category.

Mix of Renewable Fuel Types for Proposed Volume Requirements (million RINs)

  2020 2021 2022a
Cellulosic Biofuel 505 621 765
    CNG/LNG from biogas 503 619 762
    Liquid Cellulosic Biofuel 2 2 3
Total Biomass-Based Diesel 3,791 4,265 5,615
    Biodiesel 2,885 2,870 2,880
    Renewable Diesel 900 1,390 2,730
    Other 6 5 5
Other Advanced Biofuels 334 289 289
    Renewable Diesel 86 64 64
    Imported Sugarcane Ethanol 185 161 161
    Domestic Ethanol 23 24 24
    Other 40 40 40
Total Advanced Biofuel 4,630 5,175 6,669a
Conventional Renewable Fuel 12,500 13,453 14,096
    Ethanol 12,500 13,453 13,788
    Imported Renewable Diesel 0 0 308
    Imported Renewable Diesel to address the Supplemental Standard 0 0 250
    Other 0 0 0
Total Renewable Fuel 17,129 18,628 20,765
aIncludes the volume representing the proposed 2022 supplemental standard. For the purposes of this analysis, this volume is assumed to be supplied as imported conventional renewable diesel.

To promote efficiency and opportunity in producing biofuels, this action also lays out a proposed regulatory framework to allow bio-intermediates to be included in the RFS program, while ensuring environmental and programmatic safeguards are in place.

Bio-intermediates are feedstocks that have been partially converted at one facility but are then sent to a separate facility for final processing into an RFS-qualified biofuel. Providing a way for producers to utilize bio-intermediates could reduce biofuel production costs in some cases, and potentially expand opportunities for more cost-effective biomass-based diesel, and advanced, and cellulosic biofuels.

Simultaneous with EPA’s announcement, the US Department of Agriculture (USDA) announced $800 million to support biofuel producers and infrastructure. This includes up to $700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the pandemic.

In the coming months, the Department will also make an additional $100 million available to increase significantly the sales and use of higher blends of bioethanol and biodiesel by expanding the infrastructure for renewable fuels derived from US agricultural products.

Small Refinery Exemptions. The proposed action denying 65 pending applications for small refinery exemptions (SREs) responds to the decision from the US Court of Appeals for the Tenth Circuit in Renewable Fuels Association et al. v. EPA. This decision, issued in 2020, narrowed the situations in which EPA can grant SREs. EPA is sharing a proposed adjudication of pending SRE petitions that presents EPA’s approach in applying the direction from the Court.

The proposed decision document articulates the Agency’s updated interpretation of its CAA statutory authority to grant SREs, and its analysis of the available data on RFS costs and market dynamics that compel the proposed denial.

Because the proposed SRE action is highly consequential to impacted parties, reflects an updated interpretation of the CAA, and is a change from previous EPA practice, EPA is implementing a public notice-and-comment process and seeking input from stakeholders, the public, and from individual petitioning refineries.

Background. The Clean Air Act requires EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic, and biomass-based diesel. EPA implements the RFS program in consultation with the US Department of Agriculture, the US Department of Energy, and consistent with direction from Congress.

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