EPA Issues 2014 and 2015 Cellulosic Waiver Credit prices

March 25, 2015 |

rp_epa.jpgIn Washington, the EPA announced 2014 and 2015 Cellulosic Waiver Credit prices, and “a Clarification of the Data Sources Used in the Cellulosic Waiver Credit Price Calculation”.

The EPA stated:

EPA has calculated the CWC prices for 2014 and 2015 using the data sources and methodology specified in this rule, as described above. The CWC price for 2014 will be $0.49 and the CWC price for 2015 will be $0.64. We will publish these prices, along with the 2013 CWC price ($0.42), on our website following the effective date of this rule.

The good news here? The waiver credits have been successfully separated from a parallel process to set the Renewable Volume Obligation levels – which were due for 2014 in November 2013 but have not yet been released.

The EPA also ruled:

The price of CWCs are determined using a formula specified in the Clean Air Act (CAA). The cellulosic waiver credit price is the greater of $0.25 or $3.00 minus the wholesale price of gasoline, where both the $0.25 and $3.00 are adjusted for inflation. In this action we are clarifying that we will adjust for inflation by comparing the Consumer Price Index from June of the year preceding the compliance period to the Consumer Price Index from January 2009. In this calculation we will use the “Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, Unadjusted Index for All Items” expenditure category as provided by the Bureau of Labor and Statistics.

Modification of the Method for Announcing CWC Prices

In previous years EPA established the CWC price by rulemaking and published these prices in the Code of Federal Regulations. This process has resulted in a delay of the announcement of the CWC price for 2014 and 2015. To allow more expeditious publication of the CWC prices EPA will announce the CWC price on our “Renewable Fuels: Regula­tions & Standards” website.

EPA will issue an EnviroFlash notice when the CWC prices are posted. To subscribe to receive EnviroFlash notices visit here.

In a minor amendment, the EPA added:

A previous EPA rulemaking action inadver­tently overwrote a section of the regulations regarding renewable fuel produced from giant reed (Arundo donax) and napier grass (Pennisetum purpureum). In this rule we are reinserting this text. In conjunction with the addition of this text, we are also re-numbering several existing sections of our regulations to align them with regulatory references elsewhere.

Stakeholder reaction.

The Advanced Biofuels Association said:

This morning, the Environmental Protection Agency (EPA) announced a direct final rulemaking, which set forward a new path for setting the cellulosic waiver credit RIN price. This action, which is a direct result of advocacy efforts carried out by the Advanced Biofuels Association (ABFA) over the last 18 months, will help bring the cellulosic waiver credit RIN prices to parity with the RIN values of other renewables.  In addition, the revised rule also helps incentivize the purchase of actual gallons of cellulosic biofuel rather than using the waiver credit loophole.

Effective immediately, this rule raises the posted waiver price from its outdated 2013 position at $0.42, to a more reasonable rate of $0.64 for 2015. This increases the competitiveness of the RIN value relative to the renewable pool which now sits at $0.67 cents – sending a positive signal to markets and investors.

The complete EPA ruling is here.

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