The Environmental Protection Agency has finalized blending requirements under the nation’s biofuel mandate and is calling for higher usage of renewable fuels this year as consumers face skyrocketing gas prices at the pump.
The announcement sets Renewable Volume Obligations under the Renewable Fuel Standard for 2020, 2021 and 2022. The 2022 volumes were finalized at 20.63 billion gallons, slightly trimmed from the 20.77 billion gallons the Biden administration initially proposed in December. The total volume breaks down to 5.63 billion gallons of advanced biofuels and 15 billion gallons of conventional biofuel like corn ethanol.
“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,” EPA Administrator Michael Regan said in a statement. “We remain committed to working with all RFS stakeholders to build on today’s actions and deliver certainty and stability in the RFS program.”
As part of the 2022 RVO, EPA also included a supplemental 250-million-gallon requirement stemming from a previous lawsuit. An additional 250 million gallons is expected to be required in a future RVO.
Biofuel groups welcomed the 2022 RVO, which they said would set the stage for strong volumes in 2023 and other future RVOs which are based not on congressional volumes but instead agency interpretation of the markets.
Growth Energy CEO Emily Skor said the move “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.”
“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,” she said.
The agency also opted to reject a set of pending small refinery exemptions and tweaked the timelines for the 2016, 2017, 2018 compliance years. EPA also extended the timeline for compliance with the 2020 RFS obligations.
EPA’s announcement represents the first time volumes have been finalized since 2019; since then, the Trump administration pointed to COVID-19 as its rationale for not setting volume targets in 2020, and the Biden administration missed the Nov. 30, 2021, deadline to set the RVOs for the current year.
The 2021 RVO was the one volume in Friday’s announcement to be set higher than its December proposal. The agency finalized volumes in that compliance year at 18.84 billion gallons, a jump of about 320 million gallons from the 18.52 billion gallons proposed last year.
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The 2020 RVO was finalized at 17.13 billion gallons, unchanged from the December proposal when the agency suggested a retroactive cut to the volumes finalized in 2019. Those volumes (a total of 20.09 billion gallons) were finalized prior to the COVID-19 pandemic, which slashed fuel and biofuel demand, but biofuels stakeholders were still frustrated by the move. Renewable Fuels Association President and CEO Geoff Cooper called the action “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,” he said. “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.”
American Fuel and Petrochemicals Manufacturers President and CEO Chet Thompson welcomed the 2020 and 2021 volumes but said the 2022 RVO was “bewildering and contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.
“Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of U.S. small refineries, both at the expense of consumers,” he added. “The administration missed a prime opportunity to provide relief and will have no one to blame for this but themselves.”
The volumes were published Friday in line with a consent decree the agency reached with Growth Energy to establish a timeline for the current year’s RVOs. The two entities are also in the early stages of another decree that would require proposed volumes for the 2023 compliance year by mid-September and finalized targets by April 28, 2023.
In addition to EPA’s announcement, USDA also announced nearly $700 million in payments for biofuel facilities “to support the maintenance and viability of a significant market for agricultural producers of products such as corn, soybean or biomass that supply biofuel production,” the department said in a statement. According to USDA, the facilities “experienced unexpected market losses on a combined 3.7 billion gallons as a result of COVID–19.” The payments are made through a Biofuel Producer Program called for in coronavirus relief legislation passed in 2020.
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