EPA proposes 18.8 billion gallons for US biofuels for 2017

In Washington, the EPA released its draft Renewable Fuel Standard (RFS) renewable volume obligations (RVOs) for 2017. The agency proposed a total renewable fuel volumes of 18.8 billion gallons:

The volumes

The highlights

• Total renewable fuel volumes would grow by nearly 700 million gallons between 2016 and 2017.
• Advanced renewable fuel — which requires 50 percent lifecycle carbon emissions reductions — would grow by nearly 400 million gallons between 2016 and 2017.
• The non-advanced or “conventional” fuels portion of total renewable fuels — which requires a minimum of 20 percent lifecycle carbon emissions reductions — would increase by 300 million gallons between 2016 and 2017 and achieve 99 percent of the Congressional target of 15 billion gallons.
• Biomass-based biodiesel — which must achieve at least 50 percent lifecycle emissions reductions — would grow by 100 million gallons between 2017 and 2018.
• Cellulosic biofuel — which requires 60 percent lifecycle carbon emissions reductions — would grow by 82 million gallons, or 35 percent, between 2016 and 2017.

Reaction from EPA

“The Renewable Fuel Standards program is a success story that has driven biofuel production and use in the U.S. to levels higher than any other nation,” said Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation. “This administration is committed to keeping the RFS program on track, spurring continued growth in biofuel production and use, and achieving the climate and energy independence benefits that Congress envisioned from this program.”

Biodiesel held back again

The EPA proposal would establish a 2.1-billion-gallon Biomass-based Diesel requirement in 2018, up from the 2-billion-gallon requirement for 2017. The NAtional Biodiesel Board said that “EPA can easily call for at least 2.5 billion gallons in 2018 after nearly 2.1 billion gallons of biodiesel were delivered under the RFS in 2015.”

The hearing

EPA will hold a public hearing on this proposal on June 9, 2016, in Kansas City, Mo. The period for public input and comment will open until July 11.

The complete EPA proposal

It’s here in all its glory.

Reaction from stakeholders

“Generally pleased”

Dan Oh, CEO, Renewable Energy Group

“We are pleased that EPA has again proposed continued growth of biomass-based diesel and overall advanced biofuel volumes.  This proposal provides greater certainty in the marketplace, reflects the expanding usage and blend levels consumers want, and points towards continuing growth for the cleaner, lower carbon intensity fuel we produce.”

Michael McAdams, President, Advanced Biofuels Association 

“Today’s proposed RFS rule for 2017 is good news for the advanced biofuels industry with increases to the advanced, biomass-based diesel, and cellulosic pools. This shows great progress for the advanced biofuels sector. We look forward to commenting on the proposed rule and are particularly encouraged by the growth of available renewable diesel and biodiesel to our country to achieve these targets.”

National Biodiesel Board Vice President of Federal Affairs Anne Steckel 

“We appreciate the EPA’s timeliness in releasing these volumes and its support for growing biodiesel use under the RFS, but this proposal significantly understates the amount of biodiesel this industry can sustainably deliver to the market. We have plenty of feedstock and production capacity to exceed 2.5 billion gallons today, and can certainly do so in 2018.”

Americans United for Change President Brad Woodhouse 

“The RFS has been American’s most successful clean energy policy of the last decade: curtailing carbon emissions by 34-88 percent, reviving rural economies, supporting over 850,000 jobs, and saving consumers billions of dollars at the pump.  But while it’s a step in the right direction, we need to get back to the statutory levels. It will be even better for the economy, environment and national security to get the RFS fully back on track to the levels mandated by Congress.”

“Missed opportunity”

Iowa Renewable Fuels Association Executive Director Monte Shaw

“Today’s proposal represents yet another missed opportunity. The proposed corn-based ethanol level for 2017 is just below what was already produced in 2015, and it doesn’t match the current reality of the nation’s fuel sector. Low fuel prices have spurred increased driving habits, the USDA is projecting a historic excess supply of corn, and the number of stations offering fuel blends above E10 will dramatically increase this year through the USDA’s Biofuels Infrastructure Partnership. All of these signs direct the Agency to stick to 15 billion gallons for corn-based ethanol, as prescribed by Congress.

Emily Skor, CEO of Growth Energy

“We are encouraged that the EPA proposal takes a step forward, signaling the critical importance of cleaner burning, less expensive biofuels, like ethanol. However it still falls short of the goals of the Renewable Fuel Standard. Ethanol producers, retailers and the current auto fleet are fully capable of providing consumers with a true choice at the pump.

Adam Monroe, President, Americas, Novozymes

“We are glad to see President Obama call for more biofuels and look forward to that trend continuing, moving us closer to what’s intended in the RFS law. But today’s decision is also a confusing signal from an Administration that pushed the world so hard to come together and fight climate change at COP21 in Paris last year. We urge the Administration to be bold too, and get back to the original intent of the RFS. Other countries are already capitalizing on our lack of clarity.”

Brian Jennings, Executive Vice President of the American Coalition for Ethanol 

“While we are pleased that EPA’s 2017 proposal increases ethanol blending levels from 2016, we remain disappointed that EPA falls back on the questionable E10 blend wall methodology which has disrupted implementation of the RFS for more than a year. Our priority is to ensure EPA holds oil companies legally responsible under the RFS for making cleaner and less expensive fuel choices, such as E15 and flex fuels, available to consumers.”

Iowa Biodiesel Board Executive Director Grant Kimberley

“Nationally, our industry already has the feedstock and the production capacity to reach 2.5 billion gallons in a sustainable manner, and we’re disappointed this proposal is quite far from that industry recommendation. The proposed number, 2.1 billion gallons, is still too low, especially since we are facing biodiesel imports, some of which have the benefit of foreign subsidies.”

Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section

“We are concerned that today’s rule fails to recognize and support the industry’s commitment and capacity to reach the statutory volumes for advanced and cellulosic biofuels under the RFS program and to continue to grow in the future. While we appreciate EPA slightly increasing the volume requirements, the rule nevertheless relies on a flawed interpretation of EPA’s waiver authority that is inconsistent with the plain text of the Clean Air Act as well as with congressional intent and is currently the subject of litigation in the D.C. Circuit Court.”

Renewable Fuels Association CEO Bob Dinneen 

“For months, EPA has been saying it plans to put the program ‘back on track.’ Today’s proposal fails to do that. The agency continues to cater to the oil industry by relying upon an illegal interpretation of its waiver authority and concern over a blend wall that the oil industry itself is creating. The RFA has demonstrated just how easy it would be for obligated parties to reach the 15 billion gallon statutory volume for conventional biofuels next year. The fact is with rising gasoline demand, increased E15 and E85 use made possible by USDA’s infrastructure grant program, continued use of renewable diesel and conventional biodiesel that also generate D6 RINs (renewable identification numbers), well more than 15 billion gallons will be used next year.”

Aghast

Environmental Working Group Research Analyst Emily Cassidy

“Although the Renewable Fuel Standard is supposed to promote fuels that cut the emissions that cause smog and climate change, studies show that the increased use of corn ethanol actually results in more pollution. A recent study by researchers at the U.S. Department of Agriculture shows that native prairie habitats in the Midwest are being plowed up to grow more corn. The conversion of vulnerable land to grow corn is prohibited by the Renewable Fuel Standard.”

American Energy Alliance President Thomas Pyle 

“The RFS is a broken program. It was based off false assumptions and as a result, Americans are stuck with a program that doesn’t line up with the world we live in today. The RFS is not a ‘success story’, as EPA official Janet McCabe puts it. Rather, it is a lesson on why the federal government should get out of the energy business and let the markets work the way they’re supposed to. This program can’t be fixed by tinkering with the blending levels or reforming parts of the mandate. The only way to truly fix the RFS is to dismantle it entirely.”