EPA announces RFS volumetric requirements, pleases industry
The Environmental Protection Agency on Friday announced the long-awaited volumetric requirements for renewable fuels for 2020, 2021 and 2022 under the Renewable Fuels Standard and a few other actions related to biofuels.
“EPA is taking action today pursuant to a consent decree agreement that requires EPA to finalize RFS volumes for 2021 and 2022 no later than June 3, 2022,” the agency noted.
“Together with other steps announced today, EPA’s actions will help reduce our dependence on oil and diversify our fuel supply by increasing production of domestically produced biofuels,” EPA said.
In the final volumes, EPA adjusted the final biofuel volumes for 2021 to reflect updated data on actual 2021 ethanol use that has become available since the proposal was issued, EPA added.
In addition to finalizing the volume requirements, the rule “also finalizes a regulatory framework to allow ‘biointermediates’ to be included in the RFS program, while ensuring environmental and programmatic safeguards are in place,” EPA said.
Biointermediates are feedstocks that have been partially converted at one facility but are then processed into an RFS-qualified biofuel at a separate facility.
“Providing a way for producers to utilize biointermediates may reduce biofuel production costs and expand opportunities for more cost-effective biomass-based diesel, advanced, and cellulosic biofuels,” EPA said.
“This new regulatory framework will allow new facilities looking to make advanced, innovative biofuels to qualify under the RFS program, expanding access to the program for biofuel producers and increasing compliance flexibility.”
EPA also said it is on track to finalize by the end of this year a rule that would find that renewable diesel and other biofuels made from canola oil would qualify as advanced biofuel under the RFS.
Separately, EPA announced a group of small refinery exemption (SRE) actions. These include a final decision to deny a set of previously pending SRE petitions spanning the 2016–2021 compliance years, a proposed rulemaking to provide an alternative schedule for small refineries to comply with their 2020 RFS obligations, and a revision to an earlier action that provides an alternate compliance approach for certain small refineries for the 2016, 2017, and/or 2018 compliance years.
“At EPA, we are laser-focused on providing more options for consumers at the pump, and today we are taking steps to increase the availability of homegrown biofuels,” said EPA Administrator Michael Regan.
“Today’s actions will help to reduce our reliance on oil and put the RFS program back on track after years of challenges and mismanagement. We remain committed to working with all RFS stakeholders to build on today’s actions and deliver certainty and stability in the RFS program.”
EPA also noted that the Agriculture Department earlier today announced $700 million to help lower costs and support nearly 300 biofuel producers in 25 states who faced unexpected market losses due to the COVID-19 pandemic. (See following story.)
Rep. Cheri Bustos, D-Ill., said, “Today, the U.S. Environmental Protection Agency announced the largest renewable volume obligation levels in the history of the Renewable Fuel Standard. This is an extraordinary win for our nation’s family farmers, our environment and consumers facing steep prices at the gas pump.”
“While the previous administration sold out to Big Oil, President Biden is taking unprecedented steps to bolster markets for family farmers and drive economic growth in rural America,” Bustos said.
“I’ll continue working with the administration and my colleagues on the bipartisan Congressional Biofuels Caucus to expand the use of renewable fuels and lower costs for American families.”
The Renewable Fuels Association, which has often been critical of biofuels policy during the Obama, Trump and Biden administrations, said that EPA’s regulatory actions today “bring order and certainty back to the Renewable Fuel Standard and provide a solid foundation for future growth in the production and use of low-carbon renewable fuels. The actions will also lead to lower gas prices for consumers and greater energy security.”
“At long last, the RFS is being put back on track. Today’s actions by EPA and the Biden administration restore integrity and stability to the RFS program after several years of wanton mismanagement and abuse by the previous administration,” said RFA President and CEO Geoff Cooper.
“The combination of a strong RVO for 2022, restoration of illegally waived volume from 2016, and a new direction for the SRE program puts the RFS program on solid footing for the future. We thank Administrator Regan and President Biden for honoring their commitments to implement the RFS in a way that is fair, transparent, and focused on growth.”
The association released a document explaining how ethanol reduces gasoline prices at the pump, due to its lower cost and the fact that it augments the overall fuel supply.
RFA said, “The only blemish on EPA’s package of regulatory actions is the agency’s decision to reopen and retroactively lower RFS requirements for 2020.”
“From the beginning, we have voiced our strong opposition to retroactively adjusting the 2020 RVO,” Cooper said. “We are disappointed to see EPA finalize that misguided approach and believe it is entirely unnecessary.”
“The RVO already includes a self-correcting mechanism that caused actual renewable fuel volume requirements to adjust lower when COVID led to reduced gasoline and diesel consumption. In addition, EPA has consistently acknowledged in the past that it lacks the authority to go back in time and reopen annual RVOs that have already been finalized and implemented.”
Growth Energy CEO Emily Skor said, “We applaud President Biden and his EPA for this action, which will set the direction of total and advanced renewable fuel volumes for 2023 and beyond.”
“By setting conventional implied 2022 RVO volumes at 15 billion gallons, coupled with restoring the first 250 million gallons that had been illegally waived in the 2016 RVO, EPA underscores the critical role biofuels play — and will continue to play — in mitigating climate change and lowering prices at the pump.
“Moreover, it sends a positive signal as the agency works through its new rule — “the Set” — that picks up where Congress left off and establishes multi-year renewable fuel blending requirements for 2023 and beyond.
“In addition to the 2022 volumes, today’s action from EPA halts all improper small refinery exemptions, a move that will return much needed certainty to the biofuels industry and the entire fuel supply chain.
Skor pointed out that in December 2021, Growth Energy submitted to EPA a notice of intent to sue regarding its failure to timely fulfill the agency’s statutory obligation under the Renewable Fuel Standard to issue the 2022 Renewable Volume Obligation and in turn, the potentially multi-year “set” rulemaking process for renewable fuel volumes for 2023 and beyond, and that in response Growth Energy and EPA reached agreement to enter into a consent decree to finalize the delayed 2021 and 2022 RVOs by no later than June 3.
Brooke Coleman, executive director of the Advanced Biofuels Business Council, said, “We commend the Biden administration for holding the line and putting the RFS back on track, despite the theatrics coming from a small handful of anti-biofuel oil refiners still trying to pad their profits by betting on regulatory handouts.”
National Corn Growers Association President Chris Edgington praised the 2022 renewable fuel volumes, saying, “More ethanol in the fuel supply saves Americans money at the pump and lowers greenhouse gas emissions. Higher renewable fuel volumes for this year, which will increase and diversify our fuel supply, come at a crucial time as policymakers are working to lower fuel prices.”
Edgington expressed disappointment the agency “made an unnecessary retroactive reduction of 2020 RFS volumes. The RFS already self-adjusts for declining fuel use, such as occurred in 2020, and this further reduction rewards the use of more oil at the expense of the environment.”
American Soybean Association President Brad Doyle, a soybean farmer from Weiner, Arkansas, said, “We are happy to see these RVOs that are so important to the soy industry being set significantly higher than in previous years and take this news as a sign of support for the Renewable Fuel Standard going into 2023.”
“Additionally, we greatly appreciate the administration sticking to its commitment to no longer allow small refinery exemptions to continue being a means to skirt blending requirements.”
The Clean Fuels Alliance America also welcomed the rule.
“Clean Fuels and its members appreciate EPA Administrator Regan’s recognition that homegrown, clean fuels offer a better solution to high fuel prices stemming from high oil prices and supply shortages,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels.
“We support EPA’s efforts to get the Renewable Fuel Standard back on track and to finalize 2022 volumes as a jumping off point for future growth. We stand ready to work with the agency to move forward and set volumes for 2023 and beyond. And we encourage the agency to quickly finalize new feedstocks pathways, such as that for canola oil.”
The National Farmers Union said it “supports today’s announcement, while noting use of higher-level blends of ethanol, like E30, would add additional benefits to the economy, the environment, and America’s farmers.”
“We are encouraged that the EPA is taking biofuels policy in a promising direction,” said NFU Vice President Jeff Kippley.
“Farmers and biofuels producers need certainty in the industry, and we thank the EPA for recognizing the critical need to increase ethanol blending mandates.
“This announcement provides much-needed relief for consumers at the gas pump market and economic stability to America’s farming and rural communities,” Kippley added.
American Farm Bureau Federation President Zippy Duvall said, “Today’s EPA announcement is welcome news for farmers and ranchers as well as America’s families who are dealing with record-high fuel prices.”
“AFBF appreciates that the Biden administration has upheld the promise to honor the critical role that renewable fuels play in supporting the rural economy.”
The North Park Stockgrowers Association and Western Landowners Alliance hosted a meeting in Walden, Colo., on June 20 for northern Colorado ranchers focused on reducing conflict between working lands and wildlife as naturally migrating wolves…
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