EPA told to maintain RFS levels

EPA told to maintain RFS levels

Biofuels industry asks EPA to stick with Congressional mandated levels in RVO obligations.

The Environmental Protection Agency has officially closed the comment period for the proposed 2017 Renewable Fuel Standard (RFS) renewable volume obligations (RVO), and biofuels groups called on the agency to increase mandated levels.

EPA’s recent proposal calls on refiners to blend 14.8 billion gal. of conventional biofuels in 2017, slightly below the 15 billion gal. level envisioned by Congress when it expanded the RFS in 2007.

The Renewable Fuels Assn. (RFA) said record levels of E10 consumption, broader availability of E15 and E85, more than 2 billion surplus renewable identification numbers (RINs) and other factors make the statutory requirement readily achievable in 2017.

Source: National Corn Growers Association

“The agency continues to justify reducing required volumes of conventional renewable fuel by suggesting that certain ‘marketplace realities’ preclude refiners from meeting the higher statutory volumes,” Bob Dinneen, RFA president and chief executive officer, wrote in RFA’s comments. “This narrative hinges upon a belief that refiners and gasoline marketers simply cannot supply higher volumes of ethanol to consumers because of a lack of infrastructure, consumer demand or vehicles that could safely utilize fuels containing more than 10% ethanol. This is a false premise and turns the RFS from a technology- and market-driving program into a stagnant, backward-facing policy that sacrifices environmental and economic benefits by allowing the oil industry to determine how much biofuel it can use based upon their infrastructure and marketplace decisions.”

Growth Energy filed extensive comments showing EPA why the agency must adjust its final proposal to match the statutory levels that Congress intended.

EPA’s continued use of the general waiver authority to contort the definition of "supply" to mean supply and demand are legally invalid, Growth Energy explained. Additionally, EPA is statutorily required to account for the carryover RIN bank when assessing whether there is “inadequate domestic supply” for purposes of the general waiver authority.

Putting aside these legal infirmities, EPA's proposal underestimates the volume of renewable fuels the market could consume, Growth Energy said, also noting that EPA understates the volume of E15 and E85. Growth Energy provided expert analyses that support that the market could easily consume at least 750 million gal. of E85 in 2017 and very likely substantially more.

Also this week 17 members of the House Biofuels Caucus sent a letter to EPA Administrator Gina McCarthy, urging the agency to complete its 2017 Renewable Fuel Standard (RFS) “in a manner consistent with the Congressional intent to aggressively expand the production of renewable fuels.”

"As the House members wrote, ‘a final rule that falls short of the conventional biofuel cap will do nothing to assuage critics of the program, while missing an opportunity to refocus on addressing the pressing issues needed to fully realize the potential renewable fuels can make for our economy and energy security.’ We couldn’t agree more," said Dinneen.

The National Biodiesel Board (NBB) also said EPA is underestimating the market potential. NBB wrote to the EPA in a letter accompanying the official comments filed that more can be done to build on the success over the next decade. “Unfortunately, this proposal, which calls for a biomass-based diesel volume of 2.1 billion gal. in 2018 and 4 billion gal. of overall advanced biofuels next year, fails to do so by severely underestimating the capacity for growth in the biodiesel and renewable diesel sector,” the comments said.

The EPA proposal would establish a 2.1 billion gal. biomass-based diesel requirement in 2018, up only slightly from 2 billion gal. for 2017. Citing unused capacity and data showing that biomass-based diesel consumption this year will significantly exceed 2.1 billion gal., NBB is calling for at least 2.5 billion gal. for 2018.

The higher biodiesel volumes would also allow EPA to establish higher overall advanced biofuels, which includes not just biodiesel and renewable diesel but other fuels such as cellulosic ethanol. NBB is calling for an advanced biofuel volume of 4.75 billion gal. instead the proposed 4 billion gal.

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