EPA finalizes RFS percentage standards in four categories

By Derrick Cain

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Aug. 6, 2013 - The EPA announced today, in a final rule, its 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program.

The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the U.S. fuel supply (a 9.74 percent blend).

The rule reduces the targets of cellulosic biofuels and advanced biofuel based on current production, gives refineries and importers four more months to comply with the 2013 targets, and signals that the EPA will reduce targets in 2014 to address “blend wall” concerns.  

The EPA standard specifically requires: biomass-based diesel (1.28 billion gallons; 1.13 percent), advanced biofuels (2.75 billion gallons; 1.62 percent), and cellulosic biofuels (6 million gallons; 0.004 percent). The 6 million mark for cellulosic biofuels was reduced from a proposed 14 million level among concerns there would not be enough of the fuel to meet that level.

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The EPA said the standards reflect updated production projections, based on engagement with industry and an assessment of the biofuels market.

During this rulemaking, EPA said it received comments from a number of stakeholders concerning the “E10 blend wall.” Projected to occur in 2014, the “E10 blend wall” refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10.

Most gasoline sold in the United States is E10. In its final rule, which came about eight months after a congressional deadline, EPA said it will propose to use flexibilities in the RFS statute to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 RFS volume requirement proposal.

EPA also said it is providing greater lead time and flexibility in complying with the 2013 volume requirements by extending the deadline to comply with the 2013 standards by four months, to June 30, 2014.

A January 2013 ruling by a U.S. appeals court required the agency to reevaluate projections for cellulosic biofuel to reflect market conditions.

Sen. Tom Carper, D-Del., chairman of the Senate Subcommittee on Clean Air and Nuclear Safety, said he is hopeful the new rule would help settle the Renewable Identification Number markets.

“I have long supported the goals of Renewable Fuel Standard - incentivizing environmentally-friendly options that move our country away from foreign fossil fuels, while safeguarding our energy security,” Carper said. “I also strongly believe that as we make investments in renewable fuels to lower our dependency on foreign oil, we must ensure that we don't have an adverse impact on the environment or our economy.”

Tom Buis, chief executive officer of Growth Energy, said his organization was pleased that EPA “has continued to show its strong commitment to the RFS.”

“We look forward to closely reviewing the final rule and we strongly support increasing levels of renewable fuel into our nation's fuel supply,” Buis said. “The RFS continues to be a resounding success, helping create jobs in America that cannot be outsourced, revitalizing rural economies across the country in addition to reducing our dependence on foreign oil and improving our environment, all while providing consumers with a choice and savings at the pump.”

Also pleased with the final rule, American Soybean Association president Danny Murphy said the updated volumes for 2013 will allow “promising growth” of the biodiesel industry.

“During the confirmation process, Administrator [Gina] McCarthy repeatedly expressed her commitment to building bridges between the agricultural community and the EPA, and this announcement, which recognizes the strengths and benefits of the RFS and takes into account both the current and potential capabilities of the industries that produce these biofuels is a pragmatic and constructive step toward doing just that,” Murphy said.

Murphy further noted that EPA announced it has denied two petitions for reconsideration of the 2013 biomass-based diesel standard of 1.28 billion gallons, based on failing to meet Clean Air Act requirements.

Brooke Coleman, executive director of the Advanced Ethanol Council (AEC), said EPA “has done its homework when it comes to setting the 2013 standard.”

“The commercial cellulosic biofuel facilities that EPA projected to start up in 2013 are indeed operating, and the adjusted targets reflect the number of actual gallons expected to be available through the end of the year,” Coleman said. “We agree with EPA that there will be sufficient quantities of advanced biofuels in the market to maintain the broader advanced biofuel standard, which is consistent with the legislative intent of the RFS to promote advanced renewable fuels.”

In addition, Anne Steckel, vice president of federal affairs for the National Biodiesel Board, said the EPA's decision will help consumers, create jobs, and reduce emissions.

“This target will clearly be met, and it will continue to diversify our fuel supplies so that we're not at the mercy of global oil markets every time we fill up at the pump,” Steckel said.

With nearly 1.1 billion gallons of production last year, Steckel said, the biodiesel industry produced enough fuel to fill 87 percent of the total advanced requirement in 2012.

In opposition to the move, Jack Gerard, president and chief executive officer of the American Petroleum Institute, said Congress should repeal the “broken mandate” of RFS.

“While the administration acknowledges that higher ethanol mandates are unworkable by suggesting a new approach for the 2014 standards, EPA missed an opportunity to fix the problem this year,” Gerard said. “Now it's up to Congress to exercise leadership and move quickly to end this dangerous mandate before it hurts consumers, damages vehicles, and harms our economy.”

Also, in opposition to the rule, the Feed Food Fairness Coalition criticized the decision to keep the 2013 RFS volumes in full effect.

“This is just another example of the inflexibility of the RFS mandate, which is imposing numerous unintended consequences, not the least of which is higher food prices for small businesses in the food chain,” the group said. “The Feed Food Fairness coalition will continue to advocate for a complete repeal of the RFS to put an end to this failed experiment which has helped no one except a small group of special interests, while needlessly harming livestock farmers, food chain businesses and consumers.”

Updated Aug. 6 at 7:07 p.m.

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