Farm Industry News Blog

EPA proposes 2014 RFS volumes, seeks input on “Blend Wall”

The EPA announced today that it is seeking comment on total renewable fuel volumes for 2014, proposing a level within the 15.21 billion gallon range. The agency also announced that it is seeking comment on petitions for a waiver of the renewable fuel standards that would apply in 2014. This article includes reactions from two biofuel organizations.

The EPA today proposed for public comment the levels of renewable fuels to be blended into gasoline and diesel as required under the Energy Independence and Security Act of 2007. “The proposal seeks to put the Renewable Fuel Standard (RFS) program on a steady path forward – ensuring the continued long-term growth of the renewable fuel industry – while seeking input on different approaches to address the E10 blend wall,” EPA reported.

The proposal seeks comment on total renewable fuel volumes for 2014 and proposes a level within that range of 15.21 billion gallons as follows:

 

Category

Proposed Volume a

Range

Cellulosic biofuel

17 mill gal

8-30 million gallons

Biomass-based diesel

1.28 bill gal

1.28 billion gallons

Advanced biofuel

2.20 bill gal

2.0-2.51 billion gallons

Renewable fuel

15.21 bill gal

15.00-15.52 billion gallons

aAll volumes are ethanol-equivalent, except for biomass-based diesel which is actual

 
EPA points out that renewable fuel production has grown rapidly in recent years. At the same time, advances in vehicle fuel economy and other economic factors have pushed gasoline consumption far lower than what was expected when Congress passed the RFS in 2007. “As a result, we are now at the E10 blend wall, the point at which the E10 fuel pool is saturated with ethanol. If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E15 and E85,” EPA stated.
In 2010, EPA approved E15 for use in vehicles newer than model year 2001 and developed labeling rules to enable retailers to market E15. Since 2011, USDA has made funding available to support installation of flex-fuel pumps.

EPA announced that it seeks input on what additional actions could be taken by government and industry to help overcome current market challenges, and to minimize the need for adjustments in the statutory renewable fuel volume requirements in the future. “Looking forward, the proposal clearly indicates that growth in capacity for ethanol consumption would continuously be reflected in the standards set beyond 2014.” EPA reported that it seeks additional stakeholder comment as it works with the Departments of Agriculture and Energy toward the development of a final rule.
 

Seeking input on waiver
Today, EPA also announced that it is seeking comment on petitions for a waiver of the renewable fuel standards that would apply in 2014. “EPA expects that a determination on the substance of the petitions will be issued at the same time that EPA issues a final rule establishing the 2014 RFS,” the agency stated. Once the proposal is published in the Federal Register, it will be open to a 60-day public comment period. For more information, visit http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm

ACE reaction

“There is nothing positive that can be said about EPA’s proposal to unnecessarily restrict sales of ethanol-blended fuel in 2014. This proposed rule will increase pump prices, drain billions of dollars from consumer pocketbooks and transfer billions more to oil company profit statements,” responded Brian Jennings, executive vice president, American Coalition for Ethanol (ACE) to EPA’s announcement.

 “This proposal likely violates the law, would shut down biofuel facilities, put Americans out of work, and chases investment in advanced biofuel overseas to our competitors,” Jennings added. “Using the E10 blendwall as an excuse to reduce ethanol use rewards oil companies for doing nothing to comply with the RFS or inevitability of higher ethanol blends, and sets a dangerous precedent by taking the teeth out of the most consequential policy Congress has ever enacted to reduce greenhouse gas emissions of transportation fuel.”

 

Impact on advanced biofuels

Meanwhile, Michael McAdams, president, Advanced Biofuels Association (ABFA), pointed out that the 2.2 billion gallon target for advanced biofuels represents a 20 percent cut from the 2013 level and a 1.55-billion-gallon reduction from the volume contemplated by statute.

Innovative companies have responded to the challenge of producing cleaner, low-carbon fuels by investing a collective $14 billion in the development of advanced and cellulosic biofuels.  However, today’s proposal reveals that EPA might still deliver a devastating blow to this nascent sector and a victory for the oil industry by cutting the volume requirements for advanced biofuels,” McAdams noted. “Such a move will chill future investments necessary to produce large-scale quantities of renewable fuels that cut greenhouse gas emissions by at least 50 percent compared to gasoline,” he added.

  “ABFA conservatively estimates that our industry will generate at least 3.5 billion RINs in 2013 that qualify as advanced biofuels, exceeding this year’s target of 2.75 billion advanced RINs by at least 750 million gallons,” McAdams noted. (RFS compliance is tracked by assigning renewable identification numbers, or RINs, to each ethanol-equivalent gallon of biofuel.)  “To continue to support new advanced biofuel production, EPA should set the 2014 advanced biofuel target at 3.75 billion gallons as contemplated by statute. This target can be met and exceeded by current production plus carry-over RINs.”

McAdams noted that ABFA will submit official comments on EPA’s proposal. “Our top priority will remain ensuring the future viability of the advanced biofuels industry, so it can help America transition to a low-carbon economy with enhanced energy security by building better fuels.”

Like what you’re reading? Subscribe to Farm Industry News Now e-newsletterto get the latest news and more straight to your inbox twice weekly.

Please or Register to post comments.

What's Farm Industry News Blog?

The Farm Industry News Blog features commentary from Willie Vogt, Jodie Wehrspann, Kathy Huting, Lynn Grooms, Daryl Bridenbaugh and Jeff Ryan.

Blog Archive

Sponsored Introduction Continue on to (or wait seconds) ×